Aznar: Spain will show fiscal discipline but we may need the ECB to avoid a “disaster”

While Spanish Prime Minister-elect Mariano Rajoy was preparing for continued austerity in Spain, his Popular Party colleague, Former Spanish Prime Minister Jose Maria Aznar, was talking to Bloomberg Television about the outlook for his country’s economy and the mandate of the European Central Bank.

Aznar spoke to Bloomberg’s Emma Ross-Thomas in Madrid, saying near the end of the clip that the ECB may need to act as a lender of last resort to avoid a “disaster”. But he emphasised throughout his interview that Spain was prepared to take the initiative so that such assistance was not necessary. He pointed paradoxically to restoring fiscal discipline and economic flexibility at the same time by cutting budgets and increasing labor market flexibility. Aznar also pointed to the high level of unemployment that his party inherited last when he took the reins, which came down under his leadership, suggesting it can be done again under his party.

In his view, the whole problem was in bailing out Greece in the first place. And he believes returning to fiscal discipline is the only way forward.

Video below

Also see the German-language story on the nationalisation today of the bankrupt savings bank Banco de Valncia


Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty years of business experience. He is also a regular economic and financial commentator on BBC World News, CNBC Television, Business News Network, CBC, Fox Television and RT Television. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College. Edward also writes a premium financial newsletter. Sign up here for a free trial.