FINANCIAL CRISIS

Spain doesn’t need further budgets cuts: economy minister

“The perception of the Spanish economy has improved” De Guindos says

Davos (Switzerland) - 25 ene 2013 - 15:35 UTC

Spanish Economy Minister Luis de Guindos said Friday his country doesn’t need a bailout and that budget cuts that have already been planned will be sufficient to meet the deficit goal of 4.5 percent of GDP set by the European Union for 2013.

“Spain doesn’t need any sort of bailout” and the target for the budget shortfall this year is “achievable,” De Guindos said in an interview with Bloomberg Television in Davos, Switzerland, where he is attending the World Economic Forum. “The perception of the Spanish economy has improved and will continue to do so over the next weeks and months,” the minister added.

Pressure on Prime Minister Mariano Rajoy’s government has eased after borrowing costs fell in the wake of the European Central Bank’s pledge in September to buy bonds if nations apply for help. De Guindos declined to say if Spain would meet this year’s official deficit target of 6.3 percent of GDP.

“It’s not a magic number, there are several elements to take into account,” De Guindos said. “I think the measures we have taken, that we have included in our budget law are enough to reach our targets.”

De Guindos said the ECB’s bond program showed the determination of the euro region’s officials to combat the crisis. ECB President Mario Draghi pledged in July to do whatever is needed to preserve the euro.

“Much more important than the possibility of buying bonds in the secondary market is the clear commitment that this program shows in terms of the future of the euro zone,” De Guindos said. “So far we do not need the ECB buying bonds in the secondary market, what we need is to dispel all the doubts on the future of the euro zone.”