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Zapatero says Spain will meet EU defecit targets

Fri 29th Jan 2010

Spain is a "reliable" country that will reduce its budget deficit by 2013 in accord with the European Union's stability pact, Spanish PM Zapatero said on Thursday before members of the global elite.

Attending the annual World Economic Forum for the first time, Zapatero took part in discussions on the future of the euro zone and on global governance and responded to criticism of Spain's fiscal deficit and double-digit unemployment.

The PM said his government will soon approve an austerity plan aimed at bringing the budget deficit within the EU-mandated ceiling of 3 % of GDP by 2013. He went on state how this plan will include reductions in the government's workforce, current spending and "something in the investments," the Socialist prime minister said.

Zapatero said that since joining the EU, Spain has shown itself to be a "serious and reliable" country with an "impeccable" record of meeting commitments to its partners in the now-27-member bloc.>/p>

Aside form deficit concerns and the need for short-term austerity measures, he said the EU would not abandon its social-protection model and vowed that Madrid would not reduce aid to developing countries.

During the conference on the euro, which included European Central Bank chief Jean-Claude Trichet, Latvian President Valdis Zatlers and Greek Prime Minister George Papandreou, Zapatero called the EU currency a "successful project."

"No one will leave the euro, rather we will have more countries; the euro club is a strong club, with a solid link of reciprocal aid, make no mistake," he said, addressing Davos attendees who have suggested that Spain and other Southern European countries could drag down the single currency.

Those people, Zapatero added, were the same ones who said at the outset that the euro would never last. He also described the Spanish financial system as an example of stability and said he found it "shocking" that Spain's model would be criticized when it has demonstrated its "capacity of resistance." (Even though Spain had a housing boom and subsequent bust similar to those in the United States and Britain, major Spanish financial institutions did not require government bailouts.)

Zapatero said the financial crisis pointed up the need for international regulation and he urged the U.S., British and French governments to eschew unilateral measures in favor of a plan crafted through consensus.

The Spanish leader likewise said that when considering climate change, governments must not the mistake they made with finance by allowing the problem to grow so large that it leads to a "very grave" situation.

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