Rajoy: “If we want to create jobs, we have to reduce the deficit”

Prime Minister Mariano Rajoy’s long awaited television interview Monday night — the first in the eight months since he has been in office — drew a great deal of expectation as Spain finds itself at the crossroads of possibly having to ask for a European Union-backed financial intervention. However, true to his style, the prime minister got through the questions from a panel of journalists without intoning any clear message or revealing any decisive action concerning a bailout.

Instead Rajoy took advantage of the primetime television slot to defend the government’s reforms and the budget cuts he has introduced, stressing the imperative need to cut the deficit.

“If there is one priority at this moment that we need to work on in order to create jobs, it is to reduce the deficit. This is much more important than what everyone calls a bailout.”

It was the first time that the prime minister had mentioned that evil word in public, albeit quoting others. Rajoy prefers to describe European intervention, such as the rescue of the country’s banking system, as a “loan.”

“If we undertake our duties, we will start to grow and create jobs. We are at a difficult stage but to emerge from this we must not spend more than what we have,” the Popular Party (PP) leader said.

The Treasury has orders to treat pensioners in the best way possible"

At all times, Rajoy tried to skirt the bailout issue, which was the central theme of the round of questioning by the five journalists from different national newspapers invited by state broadcaster RTVE to the live interview. The prime minister said that he has not made a final decision.

“I need time to think about it. The ECB [European Central Bank] has made an important decision [last Thursday's announcement to initiate a bond-purchasing program for Spain, Italy and other countries that request it, but under strict conditions], and the government must study it very carefully and be prudent because we are talking about the interests of 47 million Spaniards.”

Throughout the telecast, Rajoy was unclear on many things, perhaps because many matters are still under negotiation. He declined to make commitments, not even concerning seniors’ pensions, although he insisted: “I have no intention of reducing them.”

When one of the panel members asked if he would freeze pensions this year, which could mean some four billion euros in savings, Rajoy was still unable to answer the question directly.

Yet the prime minister said that he will do all he can to meet his deficit-reduction goals this year and in 2013, and insisted that cuts in pensions would be the last option to be taken. The Treasury has orders to study any such cut “only as a last resort” and to “treat pensioners in the best way possible,” Rajoy said.

I will cut taxes when the time comes; there is a long time to go in this legislature"

On various occasions, just as government sources have been arguing all along, Rajoy said that the crisis is certain to be a long one. Some international media outlets are already calling on Rajoy to seek an aid package while political analysts believe that he is waiting until after October 21 regional elections in the Basque Country and Galicia before facing the ignominy of requesting a bailout.

“We are going to see whether it is convenient or not for us,” the prime minister again repeated. When asked what his limits were, Rajoy answered: “I cannot accept anyone telling us what specific policies we need to cut.”

Nevertheless, this had been the case of the hike in value-added tax (VAT) that went into effect on September 1 although Rajoy tried to paint it as his decision, not one ordered by Brussels. Rajoy said that no one is pressuring him from European institutions to make an official petition for ECB bond purchases or to ask for a “soft bailout.”

One tense moment occurred when the prime minister was asked why he had made a 180-degree turnaround from his PP campaign platform. “We have undertaken measures that we would not have taken under normal circumstances. We had no other alternatives if we wanted to face reality.

“It is true I said that I wasn’t going to raise VAT or personal income taxes, but these are things that can be changed back, and in fact, I will cut them when the time comes; there is still a long time to go in this legislature.”

In another issue, the prime minister defended his government’s decision to allow convicted ETA terrorist Iosu Uribetxeberria to ask the High Court to release him because he is terminally ill from cancer. The decision has caused rifts among members of the conservative PP.

“This also angers me but the decision had to be made. We are talking about a person who weighs 47 kilos and has been in the hospital for 50 days. The law says that no one should have to die in jail.”