Prime Minister Rajoy Says Spanish Economy Is Being Transformed

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Spain's economy has to be transformed and go back to the idea of creating jobs and [fostering] stability," Spanish Prime Minister Mariano Rajoy Brey told participants at the World Economic Forum on Latin America in his special address today in Puerto Vallarta. "My government is convinced that it needs to undertake the reforms" to allay fears that are overshadowing the Spanish economy, he said. He insisted that fiscal discipline is needed and that Spain is now committed to limit the budget deficit to 3% of GDP next year to free resources for the private sector, while reforming the labour and financial markets to achieve greater flexibility. He added that his government will announce new measures dealing with education and public services later this week.

"The world economy has not completely recovered from the financial crisis," he said, noting that "financial markets are not completely back to normal." Meanwhile, Spain seems to be in the eye of the storm, following a new increase in tension in the Eurozone. Rajoy mentioned that Italy and Spain still look quite fragile, but that both countries "have decided to undertake profound reforms."