Mr Zapatero boasted that the Spanish state was in a strong position to revive the economy because of its relatively modest debt burden and the fiscal prudence of the Socialist government over the past four years.
He said he had already announced 80 different measures in response to the crisis. The new plans, amounting to 1.1 per cent of gross domestic product, were designed to create 300,000 jobs.
About €8bn ($10.3bn, £6.7bn) is to be allocated to cash-strapped local authorities for the construction, rehabilitation and maintenance of infrastructure and buildings such as schools and sports centres. The remaining €3bn includes €800m for the motor industry, which Mr Zapatero described as a vital export industry, and €600m for the environment.
Confusion surrounds the cost of the various batches of emergency stimulus measures Mr Zapatero has announced. Some independent calculations put their total value at just over €90bn until the end of 2009. By contrast, Germany’s fiscal stimulus is put at €12bn over the same period.
In addition, governments are providing banks with liquidity aid in the form of asset purchases and loan guarantees, reaching up to €250bn in the case of Spain.
Mr Zapatero’s own estimates for Spain’s overall fiscal stimulus are lower than those of his critics, but he has not hesitated to talk of exceeding the EU limit for national budget deficits of 3 per cent of gross domestic product. “Whether it is going to be 3.5 per cent, 4 per cent or 4.2 per cent, we’ll have to see how the economy turns out,” he said last week.
Mr Zapatero is eager to control rising unemployment because he has put jobs at the centre of his policy platform. But the collapse of the housing market has accelerated job losses in construction and pushed the jobless rate to more than 11 per cent of the workforce.
Economists have become more pessimistic on the Spanish economy. BNP Paribas this week predicted that recession would persist for more than a year.
από τους FT
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