A Media Plot against Madrid? Spanish Intelligence Reportedly Probing 'Attacks' on Economy
Madrid is rushing to calm concerns that Spain could be the next Greece. Now, there are reports that the country's intelligence agency is looking into whether the Anglo-Saxon media has sought to undermine confidence in the Spanish economy.
With Spain suffering the highest unemployment in the European Union and its economy expected to remain in recession for a least another year, things are looking bleak for Prime Minister Jose Luis Rodriguez Zapatero. Now it seems the government in Madrid has found a convenient scapegoat for its travails: the Anglo-Saxon media allied with nefarious speculators looking to undermine the euro.
Debt ratio: 54.3 percent of GDP
Budget deficit: 11.2 percent of GDP (2009)
GDP growth: -3.7 percent (2009 forecast)
Share of the euro zone's GDP: 11.8 percent (2008)
Source: European Commission
Investors have voiced growing anxiety over rising debt levels in the single currency area, the euro zone, and over the ability of some governments to manage public finances, giving a quintet of shaky economies, Portugal, Ireland, Italy, Greece and Spain, the unflattering moniker PIIGS.
Stressing Spain's 'Solidity'
Economists have questioned assertions by the government in Madrid that the economy will grow by some 3 percent by 2012. Spain's deficit has soared to 11.4 percent of its gross domestic product, well ahead of the euro zone 3 percent limit. There are doubts that the country will manage to stick to its pledge of slashing 50 million ($70 million) off public spending, particularly because in a heavily decentralized Spain, powerful regional governments control a big slice of the budgets.
Zapatero's Socialist government has bristled at comparisons with Greece, which saw its pubic debt burden rise to 113 percent of GDP. Last Tuesday the Spanish prime minister urged calm and stressed his country's "solvency and solidity." He told a meeting of Socialist lawmakers in Madrid that "there are movements that have brought a great deal of concern … on the stock market. It seems there are speculative movements."
British business daily The Financial Times and the market-friendly weekly The Economist, have been particularly critical of Zapatero's handling of the economy. On Friday The Economist rejected the accusations of an Anglo-Saxon plot as "piffle," writing "the best retort is: grow up."
Yet, if the El Pais report is correct, it would seem the Spanish government is taking the matter very seriously indeed. Officials at the Spanish Defense Ministry and the CNI have, however, neither confirmed not denied the report so far.
smd -- with wire reports
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