Zapatero calls for unity on austerity measures | Europe| News and current affairs from around the continent | DW | 14.07.2010
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Zapatero calls for unity on austerity measures

Amid ongoing concerns over the Spanish economy, the country's prime minister has called on opposition lawmakers to support his government's austerity and pension reforms.

Spain's Prime Minister Jose Luis Rodriguez Zapatero

Zapatero's popularity has dropped sharply

Spanish Prime Minister Jose Luis Rodriguez Zapatero has called on lawmakers to support his government's austerity drive aimed at pulling the country out of the economic doldrums.

The savings program initiated by the Socialist government must be given time to take effect even if it slows economic growth in 2011, Zapatero said during the annual state of the nation debate in parliament on Wednesday.

He added, however, that the Spanish economy would likely see positive growth in the second quarter of this year after just managing to drag itself out of official recession territory in the first three months with 0.1 percent growth from the previous quarter.

"The numbers show that, probably, we had growth again during the second quarter," he told parliament.

Slow to recover

Spain, Europe's fifth-largest economy, entered recession at the end of 2008 and was the last major world economy to emerge from the economic downturn caused by the global financial crisis.

The country ended with a deficit of 11.2 percent of gross domestic product (GDP) last year - third-highest in the eurozone behind Greece and Ireland - amid fears it could default on its debts.

To allay those concerns, Spain announced a 50-billion-euro ($63.5 billion) austerity plan in January in an effort to cut its deficit to within the European Union's limit of 3 percent of gross domestic product by 2013.

The ruling Socialist party then averted a government collapse in May when they narrowly passed, with a one-vote majority, a second round of austerity measures worth 15 billion euros and including public sector pay cuts.

Zapatero's government has also pushed through unpopular labor market reforms and a restructuring of the banking sector.

Spain's large opposition conservative Popular Party, as well as a host of minor parties, has said it would oppose the Socialists' 2011 budget.

Author: Darren Mara (AFP/Reuters)
Editor: Martin Kuebler

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