World Economy

With Gov’t Absent, Spain’s Recovery in Danger

With Gov’t Absent, Spain’s Recovery in Danger
With Gov’t Absent, Spain’s Recovery in Danger

Caretaker Prime Minister Mariano Rajoy stepped up his warning that a failure to form a government would endanger Spain’s efforts to repair its economy as the Socialists again refused to back his call for a grand coalition to rule the country.

“Spain needs a government to deal with the economic situation,” said Rajoy in a news conference late Tuesday in the parliament building in Madrid after a meeting with Socialist leader Pedro Sanchez. “We can’t afford to throw overboard all the efforts made in recent years”, Bloomberg reported.

Spain still lacks a government after elections in December and June failed to produce a winner with enough support for a majority to pass a spending plan for next year and steer efforts to reduce the budget deficit.

The labor ministry said Tuesday that the number of Spaniards registered as unemployed plunged in July to its lowest level since 2009 in the biggest drop for the month in almost 20 years, adding urgency to Rajoy’s plea to preserve the momentum of economic recovery.

Spain’s registered unemployment, which tracks people who are included in the labor ministry database, declined in July by 83,993 people, the government said earlier Tuesday.

Spain’s economic growth slowed slightly in the second quarter, official data showed Friday, AFP reported.

The Ine statistics agency said that GDP expanded by 0.7% compared to a 0.8% rise in the previous three months.

However, compared to the same period in 2015, the economy rose 3.2% from April to June, it added.

Overall, acting Economy Minister Luis de Guindos has said he hopes the economy will grow 2.9% in 2016.

Spain has been without a fully-functioning government for more than seven months. Efforts to forge a coalition were unsuccessful as rival parties were unable to overcome their differences, prompting repeat elections in June with a similar result.

Rajoy faces an uphill challenge as most other parties refuse to back him, raising concerns that Spain could eventually head to a third round of elections at a sensitive time.

Spain is still the European Union’s second worst performer after Greece where joblessness is concerned.