Spanish Business Grows Impatient For Reforms

After years of decrying as incompetent the former Socialist government of José Luis Rodríguez Zapatero, Spain’s business leaders and fund managers are having their first twinges of doubt about the Popular party administration they elected in November to replace it, the Financial Times reported. Mariano Rajoy, PP prime minister, had raised expectations he would enact radical economic reforms to save Spain from the eurozone sovereign debt crisis and the ignominy of a bail-out such as those of Greece, Ireland and Portugal. “Spain’s new leaders have managed to generate a sensation of timidity, procrastination and confusion,” is the verdict of Edward Hugh, an economist in Barcelona. One prominent Spanish economist privately called the transition to the new government a shambles. Some business leaders are more sanguine, however. “The next three weeks will be very relevant,” says the chief executive of a big Spanish exporter. “The current government believes in what they are doing. The previous one didn’t.” So far the PP government’s most significant move has been to raise income taxes – the one thing Mr Rajoy and his team specifically promised not to do while campaigning for the November election – after announcing that the 2011 budget deficit bequeathed to them by Mr Zapatero was much higher than foreseen. Read more. (Subscription required.)