PM Rajoy Under Pressure to Ease Record Unemployment

Spain’s struggle to escape from recession will intensify this week as data revealing the extent of its woes culminate in a renewed effort by Prime Minister Mariano Rajoy to foster a recovery.

The Spanish premier pledged on April 17 to unveil measures this Friday to make the euro region’s fourth-largest economy more flexible and competitive. That announcement will end a week of reports ranging from a confirmation that Spain’s budget deficit widened last year, to an estimate of gross domestic product in the first quarter and data showing if unemployment reached another record.

Rajoy is bidding for more time from European Union peers to reorder public finances as he aims to end a six-year economic crisis, aided by the European Central Bank’s pledge to do whatever it takes to preserve the euro. International Monetary Fund Managing Director Christine Lagarde said last week that the Spanish government needs more time to reduce its deficit.

“Spain needs another two to three quarters to fully reassure investors,” said Gilles Moec, co-chief European economist at Deutsche Bank AG in London. “Beyond the ECB’s support, it must prove the economy’s improvement is structural and that the bank recapitalization is sufficient to deal with the increase in non-performing loans.”

Eurostat, the EU’s statistics agency, will release budget and debt data for the bloc at 11 a.m. in Luxembourg today. That will include an estimate of Spain’s 2012 deficit, which the government assesses at 10.2 percent of gross domestic product. Excluding aid to banks it was 7 percent, the government says.


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Mingze Wu

Mingze Wu

Currency Analyst at Market Pulse
Based in Singapore, Mingze Wu focuses on trading strategies and technical and fundamental analysis of major currency pairs. He has extensive trading experience across different asset classes and is well-versed in global market fundamentals. In addition to contributing articles to MarketPulseFX, Mingze centers on forex and macro-economic trends impacting the Asia Pacific region.
Mingze Wu