Spanish debt crisis over

In an interview with the Wall Street Journal the Spanish president, José Luis Rodríguez Zapatero, said that the Spanish debt crisis and that of other Euro zone countries is now over. He also said that the markets have regained their confidence.

These were just some of the messages contained in an interview with Zapatero published by the Wall Street Journal during the Spanish president’s stay in New York.

During the interview Zapatero defends the austerity measures undertaken by the Spanish government and said that he did not expect Spain’s GDP to shrink over the next few months.

Talking about the budget plans for 2011 he explained that the government’s intention was to cut spending by each ministry by between 15% and 16% and added that negotiations with parliamentary groups on this matter were at an advanced stage.

Zapatero said that one of the reasons that the markets had recovered was the publication of the stress tests carried out on Spanish banks and the government’s efforts to reduce the budget deficit.

The Spanish President also called for more EU cooperation in order to gain competitiveness and for common rules for EU member states in order to guarantee balanced fiscal policies.

In its summary of the interview with Zapatero the Wall Street Journal highlighted the Spanish government’s ambitious plans to reform Spain’s labour laws which are fiercely opposed by trade unions and pointed to the political fallout that carrying through these reforms could have for Zapatero and his socialist government.

Following the meeting with members of the Wall Street Journal’s editorial team Zapatero also attended a meeting with Paul Volcker, the ex President of the Federal Reserve and special advisor to the American President, Barack Obama.

According to sources speaking on behalf of the Spanish government topics on the agenda for discussion were the state of the American economy, the reforms introduced by Obama’s administration and the forecasts for economic recovery in the United States.

Volcker also explained the debate between Republicans and Democrats with regards to raising taxes.