Share this story
Close X
Switch to Desktop Site

Spanish Socialists move swiftly to implement economic measures

About these ads

Spaniards have always applauded brave matadors, and Prime Minister Felipe Gonzalez Marques is gaining admiration for taking the economy by the horns. Spain's new Socialist government wasted no time in announcing bold, unpopular economic measures almost immediately after taking office.

First came a surprise 8 percent devaluation of the peseta only 24 hours after the new government was sworn in, accompanied by restrictive monetary measures that immobilized an additional 1 percent of bank deposits. Then, three days later, the first cabinet meeting approved a 20.5 percent average price increase on gasoline and fuels. Further price hikes in electricity tariffs, transportation costs, and probably pharmaceuticals are expected.

(This week the new Socialist government carried out a campaign promise by ordering a reduction in the workweek to 40 hours and set annual holidays at 30 days. The two-hour cut in hours and boost in holidays from a usual 26 or 28 days will bring Spain into line with European Community standards, Labor Minister Joaquin Alumnia said. The National Employers Association estimated the cost to the economy to be around $1.4 billion.)

Though critical of some parts of the economic adjustment package, businessmen , bankers, and the Spanish press cried, ''Ole.'' The devaluation even got a few 'bravos' from economists and bankers who termed it ''urgently necessary.'' Jose Teijeiro, an economic adviser of the Private Banking Association, even praised the new government ''for its courage.''

Consumer organizations and labor unions limited criticism to ''the manner of raising prices'' which, they said, could have been more gradual or staggered. Bankers were most disturbed by the government's decision to tighten credit, but accepted with resignation Mr. Gonzalez's call for ''solidarity in the economic crisis.''


Page:   1   |   2   |   3

Follow Stories Like This
Get the Monitor stories you care about delivered to your inbox.