De Guindos Optimistic Over Growth of Spanish Economy

The Spanish Minister of Economy and Competitiveness, Luis De Guindos, has expressed his view that the Spanish economy will stabilise in the third quarter of 2013 after a “very long” crisis and that the Gross Domestic Product will start to grow again from the fourth quarter of the year.

In a press conference as part of the World Economic Forum meeting in the Swiss resort of Davos, De Guindos said that Spain is carrying out a process of deficit reduction and increased transparency, and stressed that the Spanish economy is now in a position to return to growth.

The minister emphasised that the general feeling now is that the main objective is to restore growth, while last year it was public finances. Thus, De Guindos defended the restructuring being carried out in the Spanish economy in order to lay the foundations for growth, because without growth the rest of the measures will not work. In particular, he pointed out that Spanish exports are beginning to gain a market share in a manner consistent with that of Germany.

De Guindos then stressed that it is now necessary to translate the improvement in the markets to the real economy, and warned that, although the situation has improved, there is still fragmentation in the markets and problems with the flow of credit to families and companies.

Regarding the 2012 deficit figure, Diario Sur reported that the minister did not want to go into figures, but said that it would be positive and that he expected it to be well received by the markets and become a confidence factor.

De Guindos went on to say that the deficit reduction should be performed at a “proper” pace and emphasised the importance of having measures in place to get credit flowing to small and medium sized enterprises (SMEs) and families, as well as having a financial system without doubts.

Moreover, the minister said he was convinced that without the labour reform more jobs would have been destroyed and reminded that there were two factors which triggered the rise in unemployment: the bursting of the housing bubble, which ended many of the jobs created in the sector, and a legislation requiring all adjustments to be made through layoffs.