Saturday, November 15, 2008

Zapatero announced a major recovery plan based on investment

José Luis Rodríguez Zapatero announced yesterday, at the end of the financial world summit held in Washington, a plan for economic revival, based on public investment, which will introduce the next 27 days in Congress and keep up to the December European Council, to coordinate with those of other EU countries. The head of the Spanish government left satisfied with his first meeting at this level, although he was cautious about his participation at the forthcoming summit of its kind to be held before the end of April in London. "I always challenge me by Mr Sarkozy," he replied, when asked about the statements of head of the French state, which assumed the continuity of Spain at the summits of the G-20.

"What I care to have attended this summit is that it has recognized the role of Spain," said José Luis Rodríguez Zapatero, for possible involvement in Spanish next meeting.

In his speech to world leaders behind closed doors for about 10 minutes, Zapatero called for "coordinated action of States to revive the economy through the instrument of fiscal policies." Although Zapatero did not explicitly ruled out tax cuts, he explained in the subsequent press conference that alluded to the need to support public investment in the productive economy, especially in areas like research and development, innovation, infrastructure, energy.

"This is where the public sector lead at the moment and economics with the economic action," he explained. After putting the example of China, who spent half a billion euros in public investment, insisted that "the increase in public investment is the most robust to combat a situation of economic stagnation or recession."

So far, the Vice-President and Minister of Economy Pedro Solbes, who yesterday sat to the right of Zapatero in the lounge of the National Museum of Architecture and whom he instructed to keep a "continuing dialogue" with financial institutions to ensure the provision of credit , Had resisted both new tax cuts as the increase in public spending by their effect on the deficit, which this year will be around 1.5% of GDP.

But, as explained by Cobbler yesterday, "the crisis in the markets has become a global economic crisis affecting the real needs of citizens", to which states can not stand idly by.

He underlined the need to coordinate national plans, especially in the context of the EU, "since it has proved the country to have little effectiveness", and recalled that the European Commission presented the next day on November 26 a plan for revival of the continental economy.

Although from the ranks of the PSOE had announced that it would take the ideological battle to the neoliberal postulates, the president was interested in stressing that the state "should not stifle economic freedom" and that his responsibility is to "bring order to financial markets, not replace them. " He rejected the adoption of protectionist measures, which he believed would be a "grave error", he put limits on tax havens, and even their elimination, and defended the need to regulate the "astronomical fees" and "unwarranted benefits" that have proliferated among the executives of the financial sector in recent years.

In this line, was in favor of introducing a "code of rights" for users of financial institutions, given the opacity of many of its products. Zapatero used his speech at the dinner on Friday at the White House to assume the effective functioning of the Spanish system of banking supervision, but avoided proposing the extension of the formula of provisions cyclical key to its success.

With regard to financial institutions, called for reforming the International Monetary Fund (IMF) and World Bank (WB), to reflect the real weight of each country in the world economy (now controlled by USA) and have sufficient resources to support countries in distress. On the other hand, attributed the coordination of plans for economic revival for the presidency of the G-20, the club under whose umbrella the summit was convened in Washington and who does not belong to Spain.

At least, still, as the head of the Brazilian diplomacy, Celso Amorim, suggested that the G-20 will become the G-22, with the addition of Spain and some other emerging economies. Brazil, which holds the rotating presidency this year's G-20, will be replaced in January by the United Kingdom, the top financial czar to give continuity to the one held yesterday.

A first step

Zapatero thanked Brazil for its invitation, but avoided laying the bells on the fly. "We have taken a very important first step and we will continue doing things well to consolidate our position," he said. On the participation of Spanish experts in the working groups that must deal with specific aspects of financial reform, said that Spain "is available" for the troika of the G-20 (comprising Brazil, the United Kingdom and South Korea), a which has been given its coordination.

Of all the leaders gathered in Washington, Zapatero was certainly one of the most optimistic. He assured that the prospects for economic recovery are "mejoreseconómica today are" now better than a week ago "and that the family photo of the summit will be remembered as" the day that things began to change. "The only certainty is change that the next picture will no longer be Bush, who thanked his "attitude of courtesy" despite "differences" that has existed between the two.

Without Spanish flag
The absence of the Spanish flag raised suspicions in Washington. Sources from La Moncloa hastened to explain that because of the presence of the Czech deputy prime minister in the Spanish delegation and the Dutch Minister of Finance in French (the head of the Government of the Netherlands, Jan Peter Balkenende was unable to attend for the death of his father) both countries agreed to give up their national colors and appear under the EU Common. In fact, Spain never had the right to be present with its own flag, not to join the G-20.

Like other presidents, Bush met with Zapatero, both on Friday night at the door of the White House as yesterday morning at the start of the summit, with a smile and a handshake. Yesterday even gift him with a "encantao" in Spanish. There is no evidence that his guest articulated word. The protocol would have it, in the family photo, Zapatero stood behind Bush.

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