We’ll stick to austerity says Spain’s premier

SPAIN will stick to harsh austerity measures until it emerges from financial crisis, the country’s prime minister said yesterday, promising that the country would survive the present economic turmoil.

Mariano Rajoy acknowledged that the country is experiencing turbulence, but said “we are not at the edge of a precipice, we will not sink”.

The government has “the will to persevere in this line for as long as is necessary,” he said.

Spain, where unemployment stands at a Eurozone high of 24.4 per cent, has imposed spending cuts and tax hikes to escape a crisis many fear could eventually swallow other countries using the European single currency. But last week there were serious concerns about its ability to stave off a Greek-style financial debt crisis.

Rajoy said yesterday that he supported the creation of a single European fiscal authority to uphold the credibility of the euro, and acknowledged that for this to happen it would be necessary for member states to “surrender more of their fiscal autonomy.”

While it was possible Spain could have lived beyond its means, it was also true that those who are now criticizing Spain had also lent it money at very cheap rates, he added.

German Chancellor Angela Merkel has long maintained that austerity is the most important step to easing the Eurozone debt crisis, however, the leaders of countries hardest hit have also called for steps to be taken to try and boost employment. French president François Hollande has also warned against too much belt-tightening for fear it could unleash political chaos.