Rajoy Sees Spain’s Recovery in Danger Without a Government

  • Spain registered unemployment fell to the lowest since 2009
  • Socialist leader Sanchez rejects any compromise with Rajoy

Caretaker Prime Minister Mariano Rajoy stepped up his warning that a failure to form a government would endanger Spain’s efforts to repair its economy as the Socialists again refused to back his call for a grand coalition to rule the country.

“Spain needs a government to deal with the economic situation,” said Rajoy in a news conference Tuesday in the Parliament building in Madrid after a meeting with Socialist leader Pedro Sanchez. “We can’t afford to throw overboard all the efforts made in recent years.”

Spain still lacks a government after elections in December and June failed to produce a winner with enough support for a majority to pass a spending plan for next year and steer efforts to reduce the budget deficit. The labor ministry said Tuesday that the number of Spaniards registered as unemployed plunged in July to its lowest level since 2009 in the biggest drop for the month in almost 20 years, adding urgency to Rajoy’s plea to preserve the momentum of economic recovery.

Rajoy has been ruling in caretaker mode since October last year when he called the first inconclusive round of elections. The vote produced the most fragmented parliament in the country’s current democratic era after Podemos and Ciudadanos became the third and fourth largest parties. Repeat elections in June delivered more seats for Rajoy but not enough to build an administration.

Spain’s registered unemployment, which tracks people who are included in the Labor Ministry database, declined in July by 83,993 people, the government said earlier Tuesday. The caretaker administration last week trimmed its growth outlook for next year to 2.3 percent from 2.4 percent, citing the prospect that investment in construction and equipment will contribute less to an economy that’s been expanding since the third quarter of 2013.

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