MADRID (MNI) – The high level of spreads seen for Spanish debt is
unacceptable, according to European Central Bank Governing Council
member Miguel Angel Fernandez Ordonez on Monday,
The head of the Bank of Spain said at a conference here that
Spanish inflation at the start of next year would not exceed 2%.
“It should not be acceptable” to persistently have a spread of 200
basis points, and if this were to continue, it could reduce lending to
corporations, he warned.
The forecast for domestic price growth calls for inflation not to
surpass 2% and to remain below the European average in the early part of
2012, he said.
With regard to the restructuring currently underway in Spain’s
financial sector, Ordonez made the point that the country “has spent
only 1% of GDP in sanitizing the savings banks, whereas other countries
have gone so far as 10% or even more.”
Observing that “the Spanish businessman is terrified of employing,
something that does not happen in other countries,” Ordonez said that
“this we have to change.”
With the proper structural reforms, Spain “could attain lower
unemployment rates at lower GDP growth,” he said. “In periods of
expansion, the lowest rate of unemployment never declined below 8%,” he
reminded.
–Frankfurt bureau tel.: +49-69-720142. Email: frankfurt@marketnews.com
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