Spain has taken the correct financial steps to reassure the markets and had no need of international financial aid, IMF managing director Dominique Strauss-Kahn said in comments published yesterday.
“We have not received any request for help from the Spanish government,” Strauss-Kahn told the Spanish daily El Pais.
“I don’t believe that the Spanish government needs any type of financial aid,” he added in an -interview that he also gave to the Washington Post and Italy’s La Repubblica.
“I believe that the policies that the Spanish government has implemented, as much on the fiscal side as in the reform of pensions, the labor market or in banking, are the correct policies,” he said.
“And what I see is that over the last few months Spain has been put in the same bag as other countries, such as Greece, when they are clearly not in the same -situation,” he said.
“The markets are responding and what should be done is being done. If is difficult for the country and for the government to do the right thing, but it is being done,” he added.
Strauss-Kahn’s vote of confidence will come as a welcome boost for Spain’s embattled socialist government.
The markets are still skeptical that Spain, which is struggling to emerge from the economic crisis that hit it in 2008, can get its public accounts in order and relaunch its economy.
On March 10 Moody’s sliced Spain’s long-term credit rating by a notch to “Aa2” and on March 24, it downgraded the credit ratings of 30 Spanish banks.
Then on March 30, Spain’s central bank warned that the country would miss key public deficit targets this year and next year. It also warned of slower-than-expected growth ahead.
The Spanish economy -contracted by 0.1 percent last year after shrinking 3.7 percent in 2009.
While government forecasts that this year will see growth of 1.3 percent, the IMF figure is 0.6 percent and the Organisation for Economic Co-operation and Development’s (OECD) is 0.9 percent.
One of the country’s most serious problems, however, is unemployment, which at the end of last year was running at 20.33 percent, the highest among OECD countries.
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