Germany and the other creditor nations in the Eurozone should take action to stimulate economic growth, Spanish Prime Minister Mariano Rajoy said in an interview with Britain’s Financial Times.
“I think that in this moment, when there is a need for growth, those who are able to implement growth policies should do it,” the premier said.
“What is clear is that you cannot ask Spain to adopt expansionary policies at this time. But those countries that can, should,” Rajoy added.
The prime minister suggested that only a new crisis in the markets would prompt Spain to resort to the European Central Bank’s Outright Monetary Transactions program, under which the ECB would be authorized to buy Spanish bonds in the secondary market as a way of pushing down interest rates.
“The option is there, and it would be absurd to rule it out for all time. But at this point we believe that it is not necessary,” Rajoy told the FT.
He also discounted the need for additional Eurozone assistance to Spain’s troubled banking sector.
The European Stability Mechanism transferred to Spain last month the equivalent of 39.5 billion euros ($51 billion) to recapitalize four nationalized banks and help fund a “bad bank” set up to absorb toxic assets.
“I am absolutely convinced that Spanish financial institutions will not require any more funds than were given already,” Rajoy said, evincing similar confidence in Spain’s economic prospects.
“2014 will be a year of economic growth and growth in jobs, and the second half of 2013 will also be a bit better, as long as there are no turbulences in the financial markets,” he said.
Acknowledging that unemployment - now above 26 percent - is Spain’s biggest problem, the prime minister said the latest data indicate job losses are concentrated in the real estate, financial and public sectors.
“But in other sectors of the economy jobs have not been lost. So the labor reform has started to bear fruit,” Rajoy said.