José Luis Rodríguez Zapatero, Spain’s Socialist prime minister, announced an extra €11bn ($14.2bn) of urgent government spending on infrastructure, the auto industry and other targets, as part of a multifaceted fiscal stimulus plan he called “unprecedented in its magnitude”. Zapatero’s move underlines the divisions within the EU over how to handle the recession arising from the global financial crisis. His deliberate use of heavy government spending differs markedly from the more cautious approach of Angela Merkel, the German chancellor. Zapatero on Thursday boasted that Spain was well positioned to revive the economy because of its relatively modest debt burden and his government’s fiscal prudence over the past four years. However, confusion surrounds the cost of the various batches of emergency stimulus measures announced. Some independent calculations put their total value at just over €90bn until the end of 2009. By contrast, Germany’s fiscal stimulus is put at €12bn over the same period.

This entry was posted by Gwen Robinson on Friday, November 28th, 2008 at 5:41 and is filed under Capital markets, People. Tagged with Spain. Edit this entry.