Spain is meeting and exceeding its economic reform targets, Spain’s finance minister, Luis De Guindos, told MEPs on Monday during a two-hour hearing in the economic and monetary affairs committee. MEPs pressed the minister on the danger of excessive austerity, stressed the need for investment and said that the country’s sacrifices must be rewarded by the EU.
Mr De Guindos is the third finance minister after Hungary’s and Belgium’s to be heard by the EP committee as part of the House’s efforts to increase the transparency and accountability of the EU’s efforts to exit the crisis and enhance economic governance. Finance ministers from Italy, France and Germany are all expected to attend similar hearings by the committee before the end of the year.
In his opening comments, Mr De Guindos stressed that Spain’s measures were paying off and that forecasts were good. Some MEPs said, however, that the Commission’s forecasts were less positive and that the Commission had often been closer to reality than government forecasts. They pressed the minister on whether Spain was considering a restructuring of its debt and whether it would be applying for an EU bailout.
A better mix
Many MEPs stressed to Mr De Guindos the need to develop a better policy mix in response to the crisis, with less focus on austerity measures and more on growth and investment. They also warned him that people had major doubts about whether the sacrifices were paying off and that tensions could escalate seriously. Getting people, especially the young, into jobs would be the government’s main target and raising revenues by fighting fraud would be intensified, Mr De Guindos said.
Others said that efforts at EU level needed to be stepped up, arguing that the return from better-off countries for the sacrifices being undertaken was slow in coming. Mr De Guindos replied that one of the planks of the Spanish strategy was indeed to convince others that a future for the Euro was inevitable.
A new banking sector
Much time was also devoted to Spain’s banking sector. Mr De Guindos told MEPs that the restructuring was on track and would be accomplished by February. A number of MEPs, however, shared their doubts about the reforms with the minister, especially concerning Bankia. Mr De Guindos insisted that Bankia would become healthy again and be an important player in the Spanish banking landscape.