Spain gets economic 'shock therapy': press

2nd December 2010, Comments 0 comments

The Spanish press was divided on Thursday over new measures to revive the economy, with one paper calling them "shock therapy to calm the markets" and another accusing the government of "improvising."

Prime Minister Jose Luis Rodriguez Zapatero acted "to win time to calm investors and halt the attacks on the Spanish economy," said the centre-left El Pais, Spain's leading daily.

But the centre-right El Mundo charged Zapatero had "improvised new measures and halt the attacks on the Spanish economy by the markets,"

In a bid to douse market fears of an Irish-style bailout of the troubled economy, the Socialist leader announced on Wednesday the partial privatisation of the state lottery company and the sale of a bigger stake in its airport operator.

He also announced the government would scrap a monthly subsidy to unemployed workers and cut taxes for 40,000 small and medium sized firms to help spur growth.

Markets and the European Union hailed the measures.

Spain's main stock market index closed up 4.44 percent, its second highest one-day rise this year, while the return for investing in Spanish government 10-year bonds declined to 5.23 percent from 5.50 percent a day earlier.

On Thursday, the Madrid market opened up 1.14 percent.

European Commission spokesman Amadeu Altafaj said the measures "confirm the government's determination to continue with its reform agenda."

The conservative newspaper ABC said Zapatero "gave in to pressure", while the business daily Expansion said he was using "shock therapy to calm the markets."

Zapatero has "retaken the initiative" with new measures, but "he is resigned to a break-up with the unions," said another economic paper, Cinco Dias.

The Spanish unions have harshly criticised the measures.

The CCOO, one of the country's two largest unions, Wednesday described them as "anti-economic, deeply anti-social and contradictory."

© 2010 AFP

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