Mariano Rajoy has called on Germany and other creditor countries in the eurozone to do more to stimulate growth, arguing that a switch to a more expansionary policy would boost economic recovery across the single currency area.
Launching a vigorous defence of his own economic crisis management, Mr Rajoy also insisted that Spain was right not to request aid from the European Central Bank last year – and ruled out any such move for the time being. Facing soaring unemployment and a second year of recession, Spain has come under strong pressure from investors to trigger the ECB’s outright monetary transactions programme. This would allow the bank to buy Spanish bonds in the secondary market, driving down the cost of borrowing for Madrid and, by extension, the country’s private sector.
Mr Rajoy suggested he would only consider OMT in the event of fresh market turmoil. “The option is there, and it would be absurd to rule it out for all time”, the prime minister said. “But at this point we believe that it is not necessary.”
Mr Rajoy insisted that any doubts over the current state of the Spanish banking system were misplaced. “I am absolutely convinced that Spanish financial institutions will not require any more funds than were given already”, he said, arguing that Spain’s lenders had already been forced to reveal all their problematic assets.
The Spanish leader argued that the actions taken last year by the ECB and eurozone governments had put to rest any doubts over the future of the single currency, insisting the euro was “absolutely irreversible”. He also struck a positive note on the recession-plagued Spanish economy, pointing out that the country’s businesses were regaining competitiveness and that exports were on the rise.
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