Zapatero Says Spain Needs to Accelerate Its Economic Revamp

Spain must be alert and focus on completing economic changes and creating a more flexible labor system to be more competitive, Prime Minister Jose Luis Rodriguez Zapatero said.

“We cannot lower our guard” even as the economy stabilizes, he said today at a news conference in Madrid after meeting with 41 executives from Spain’s biggest companies. “We still have a great task ahead, which is to consolidate and strengthen economic growth in order to create jobs.”

Zapatero met the executives and the chairman of employers’ association CEOE to discuss economic and labor measures carried out by the government in the last few months. He plans another such meeting in three months.

“We also need a more flexible labor system to boost economic and business competitiveness,” Zapatero said, adding that a deal on collective bargaining should be reached in April.

The government will continue to work on its energy policy, he said, focusing on cost cuts and reducing the so-called tariff deficit -- the difference between what consumers pay for electricity and the cost of producing it -- in the medium term.

“Energy costs can’t continue to increase,” Zapatero said. “We need to make them cheaper.”

Exports, Education

Spain also needs to boost its exports and be more international, Zapatero said. “We need to consolidate this recovery” he said, referring to export growth.

Zapatero said he reached an agreement with the country’s biggest companies to better educate young people as a means to create jobs. He asked business leaders to set up a program of at least 30,000 grants for which Telefonica SA (TEF)’s Chairman Cesar Alierta will coordinate a working group with the Finance Ministry.

The program aims for young people to have internships in companies for at least six months. Santander SA’s Chairman Emilio Botin has guaranteed 2,000 grants within the context of the program, Zapatero said.

To contact the reporter on this story: Manuel Baigorri in Madrid at mbaigorri@bloomberg.net

To contact the editor responsible for this story: Angela Cullen at acullen8@bloomberg.net

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