Sunday

18th Nov 2018

Obama calls for 'resolute' spending cuts in Spain

US President Barack Obama on Tuesday asked Spain for "resolute action" to stem its widening deficit, in order to regain market confidence in the eurozone and avoid a spill-over effect from Greece.

"President Obama and Spanish President Jose Luis Rodriguez Zapatero ... discussed the importance of Spain taking resolute action as part of Europe's effort to strengthen its economy and build market confidence," the White House said in a statement.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

  • The US president has been working the phones with EU leaders (Photo: White House)

Washington is backing austerity measures in Spain and other European countries "because of a fear that anything might stem the recovery that we believe is taking place," Mr Obama's spokesman, Robert Gibbs, told journalists in Washington.

Mr Obama's phone call to Madrid was part of the "ongoing consultations with close allies" on the troubles affecting the eurozone, he added.

The US president has been working the phones in recent days to EU leaders struggling to defend the eurozone from growing market speculation on its ailing southern economies.

His extensive talks with German Chancellor Angela Merkel and French President Nicolas Sarkozy are believed to be one of the catalysts behind the €750 billion bailout agreed over the weekend by the leaders of the eurozone.

Mr Zapatero is due to present on Wednesday (12 May) spending cuts of €5 billion this year and a further €10 billion in 2011, in a bid to stem the public deficit, which is currently at 9.8 percent of the GDP.

According to the eurozone's internal rules, deficits cannot surpass 3 percent of the GDP. Spain already approved an austerity package in January but has so far failed to cap its widening deficit.

EU leaders last weekend pressed Madrid for even deeper cuts, saying that these plans are not tough enough to calm markets, but Spanish finance minister Elena Salgado managed to resist the pressure, El Pais reported.

She argued that the meeting was called to discuss bail-out mechanisms, not Spanish austerity, and to plead for more time for her government to come up with additional measures.

Cutting social benefits will be tough for Spain's centre-left government as the country's unemployment rate has recently surpassed 20 percent and the economy is expected to shrink by 0.4 percent.

In addition, Spain's tax inspectors' union (Gestha) calculates that 23 percent of the country's GDP is attributable to its shadow economy, which grew about 0.7 percent last year.

EU and China perform tricky diplomatic dance

EU and China relations kicked off 15 years ago after signing a strategic partnership. Trade has increased dramatically but human rights and other issues remain tricky as the two seek to defend international law and international trade.

News in Brief

  1. US warns EU banks and firms against trading with Iran
  2. Merkel urged Romania not to move embassy to Jerusalem
  3. Protesters call for Czech leader to step down
  4. Former German chancellor labelled 'enemy' of Ukraine
  5. French lead opposition to Brexit deal on fisheries
  6. Private accounts of Danske Bank employees investigated
  7. UK's May defends Brexit deal to MPs, after ministers resign
  8. Brexit MP calls for 'no confidence' vote on May

Opinion

Macron's 'European army': why is everyone talking about it?

Few people commented on one key point in Macron's statement: he did not justify the idea of a European army by the need to intervene in Africa, which would have been France's traditional approach. Instead, he invoked the Russian threat,

Stakeholders' Highlights

  1. NORDIC COUNCIL OF MINISTERSTheresa May: “We will not be turning our backs on the Nordic region”
  2. International Partnership for Human RightsOpen letter to Emmanuel Macron ahead of Uzbek president's visit
  3. International Partnership for Human RightsRaising key human rights concerns during visit of Turkmenistan's foreign minister
  4. NORDIC COUNCIL OF MINISTERSState of the Nordic Region presented in Brussels
  5. NORDIC COUNCIL OF MINISTERSThe vital bioeconomy. New issue of “Sustainable Growth the Nordic Way” out now
  6. NORDIC COUNCIL OF MINISTERSThe Nordic gender effect goes international
  7. NORDIC COUNCIL OF MINISTERSPaula Lehtomaki from Finland elected as the Council's first female Secretary General
  8. NORDIC COUNCIL OF MINISTERSNordic design sets the stage at COP24, running a competition for sustainable chairs.
  9. Counter BalanceIn Kenya, a motorway funded by the European Investment Bank runs over roadside dwellers
  10. ACCACompany Law Package: Making the Best of Digital and Cross Border Mobility,
  11. International Partnership for Human RightsCivil Society Worried About Shortcomings in EU-Kyrgyzstan Human Rights Dialogue
  12. UNESDAThe European Soft Drinks Industry Supports over 1.7 Million Jobs

Latest News

  1. Brexit dominates EU affairs This WEEK
  2. How the EU commission got tunnel vision on self-driving cars
  3. No-confidence calls against May put Brexit deal in doubt
  4. Key points of the Brexit deal (if it ever comes into effect)
  5. Romania heaps scorn on 'revolting' EU criticism
  6. US steps in to clean up Cyprus
  7. 'Decisive progress' on Brexit as British cabinet backs deal
  8. Asylum for Macedonia's ex-PM puts Orban on spot

Join EUobserver

Support quality EU news

Join us