General - Wednesday, April 2, 2008 20:20 - 0 Comments

Press Coverage: “Aznar accuses the Government of ‘looking the other way’ in view of an economic crisis ‘which could have been avoided’”

Aznar believes a crisis could have been averted if people had wanted to see it coming

The former Prime Minister of the Government María Aznar emphasized today that the Spanish economy has entered into a crisis which ‘could have been averted’, because ‘certain people didn’t want to believe that difficult times were arriving which were seen coming’.

Aznar reflected on this during his participation in the Global Competitiveness Forum organized by Georgetown University in Madrid, where he stressed that the Spanish economy has ‘certain problems’ in order to face the crisis.

Among them, he emphasized the increase in public expenditure and taxation, that economic freedom has ‘decreased’, the lack of structural reforms, that there has been ‘too much interference’ in the lives of companies, or that the regulating bodies have ‘deteriorated’.

‘All this is starting to affect families and companies’, added Aznar, who recalled that in Spain there are 300,000 more unemployed than four years ago, ‘double inflation, triple foreign trade deficit, and the ‘highest tax burden in the last 30 years’.

He admits Spain is facing this crisis from the stance of a wealthy nation, but warns it will have ‘never before seen financial consequences’, such as the social reaction which might take place if the more than four million immigrants who have arrived in recent years ‘are the first to suffer the consequences of unemployment’.

‘It is a good idea to keep the house in order and the accounts in order to cope with the future, because economic disorder gives rise to political disorder’, he explained.

Aznar emphasised, on the other hand, the positive transformations of the Spanish economy in recent years, in which ‘it has grown brilliantly’ and has become one of the eight richest countries in the world.

‘When one manages to enter the exclusive club of countries with more than 20,000 dollars’ income per capita, one is obliged to commit as few errors as possible, because it is very difficult to be a member of this group, but it can be relatively easy to undo all the good work’, pointed out Aznar.

The former prime minister of the Government reviewed the economic situation worldwide and stated that the errors made in recent years will have an unquestionable financial cost, especially in economies ‘which have not done their homework as well and which are affected by the crisis we are undergoing with high foreign debt and an excessive foreign trade deficit’.

‘The creation of money has been excessive and excesses are paid for dearly ‘, said Aznar, who added that ‘excesses in liquidity always cause a negative effect which has only just begun’ because ‘asset bubbles are highly dangerous and any imbalances end up being paid for’.

He indicated that interest rates being so low caused many finance entities ‘haven’t so much studied credit requests from clients but rather have gone after clients to almost give away their money and credits’, which ‘under the current economic circumstances, is going to produce severe complications’.

Aznar defended his ‘recipe’ for combating the economic crisis and permitting certain world economies to take off, such as Africa, an economy now ‘detached’ from the rest: ‘the greater the economic freedom, the more opportunities there will be for the countries that need them most’.

He also confirmed that in Spain, problems have arisen when the leaders have devoted themselves ‘to delving into our history instead of looking for solid future ambitions’, and therefore there is no need ‘to fear globalization, competition or an opening-up to the world’.

Via: Europapress