Spain’s Rajoy Calls on EU to Speed Up Integration, Boost GrowthAngeline Benoit
Spain called on European Union peers to overcome divisions and take steps to fight the economic crisis by adopting measures to boost growth.
“The EU’s next summit in June must take important decisions,” Spanish Prime Minister Mariano Rajoy told lawmakers in Madrid today. “Our citizens are demanding results and they are right.”
Rajoy said the conflicting priorities of EU members are hindering the implementation of pro-growth policies. “One must negotiate until exhaustion to maintain the principle of cohesion,” he said.
The euro area’s fourth-largest economy escaped a full bailout last year after the European Central Bank pledged to do what it takes to support the single currency. Still, Rajoy’s People’s Party government is struggling to reorder public finances as the nation remains mired in its sixth year of slump.
The yield on Spain’s 10-year benchmark bonds fell 4 basis points to 4.68 percent at 11:28 a.m. in Madrid, narrowing the spread with similar maturity German debt to 3.38 percentage points. The Spanish 10-year yield rose to a euro-era record of 7.75 percent in July before the ECB first made its euro pledge.
“I would like to see work moving faster and with more intensity in the implementation of approved plans,” Rajoy said. EU members must overcome divisions on bank supervision and resolution mechanisms as well as agree on how deposits can be guaranteed and banks’ directly recapitalized by the EU’s rescue-fund, he said.
The gravity of the situation must prompt action, Rajoy said. “The financial crisis first, the economic crisis that followed, the system’s credibility, force us to pause and re-think Europe’s goals, the intensity of its integration and its political design.”
Rajoy called on EU members to be “prudent” with their public declarations, “exactly the contrary” of the “unfortunate” remarks by Eurogroup Chairman Jeroen Dijsselbloem, who said that the Cyprus rescue would be a template for future euro-area bailouts. The comments “generated doubts, uncertainty and volatility around the single currency, it is obvious it was damaging for everyone.”