Spain Will Manage Without External Help, De Guindos Tells FAZ

Spain will manage to get through the current crisis without external help even as the economy is expected to shrink this year, Frankfurter Allgemeine Zeitung said, citing an interview with economy minister Luis de Guindos.

The Spanish budget, which foresees savings and increased tax revenue of 25 billion euros ($33 billion) this year, is “absolutely necessary,” because financing costs will rise should the markets fail to see budget consolidation, the German newspaper cited De Guindos as saying.

This year will be “difficult” with the economy expected to shrink about 1.5 percent before showing a “slightly positive development” next year, De Guindos said, according to the newspaper. While unemployment will probably rise further, the foreign trade deficit will disappear this year, the minister told FAZ.

To contact the reporter on this story: Sheenagh Matthews in Frankfurt at smatthews6@bloomberg.net

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net