Reviving Growth in Spain and the Euro Area
The ongoing crisis in the eurozone has exposed the need for not only serious fiscal consolidation but also bold structural reforms to revive many economies in Europe. The Spanish government is particularly aware of this challenge as its economy faces 23 percent unemployment, negative economic growth, and a serious credit crunch in the banking industry.
On February 24, the Global Economy and Development program and the Center for the United States and Europe at Brookings hosted Luis de Guindos, Spain’s minister of economy and competiveness, for a discussion on the country’s new plan to combine fiscal consolidation with structural reforms in order to jumpstart growth in Spain and help stabilize the euro area. Minister de Guindos was appointed Spain’s economy and competitiveness minister in December 2011. A former deputy finance and economy minister and chairman of the European Union Economic Policy Committee, de Guindos has been tasked with reforming and overhauling the Spanish economy against the backdrop of the European debt crisis. Brookings Vice President Kemal Derviş, director of Global Economy and Development, provided introductory remarks and moderated the discussion.
After the program, Minister Luis de Guindos took audience questions.
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I question whether the U.K. and EU will become political and economic rivals, as geography, history, financial interests, security concerns, and shared values will necessitate continued close cooperation in some form for the foreseeable future. My bigger concern is the all-consuming nature of Brexit, which could prevent the U.K. especially and the EU from engaging effectively against international rivals. Brexit already dominates debates in London, with a divided Cabinet and parliament having limited bandwidth to engage on global challenges. Even if the U.K. parliament ratifies a Brexit deal, the two sides must then embark on equally complicated and domestically contentious negotiations about their future relationship. In some form, Brexit will afflict Europe for years and risks detracting attention from emerging threats.