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STORY: IMF / SPAIN RECOVERY
TRT: 2:52
SOURCE: IMF
RESTRICTIONS: NONE
LANGUAGES: ENGLISH / SPAINISH / NATS
DATELINE: JULY 2011, WASHINGTON DC / FILE
FILE – RECENT, MADRID, SPAIN
1. Tilt down, building
2. Close-up, Spanish flag
JULY 2011, WASHINGTON DC
3. SOUNDBITE (Spanish) Jerome Vacher, Senior Economist, International Monetary Fund:
“First of all, Spain’s economy is gradually recuperating and achieving a significant balance. This is mainly due to the strength of its exports. Secondly, it must be said that the economic policies implemented have been strong and far reaching. This is true for fiscal matters, labour reform issues and the financial sector. But this, it must be said, is not enough. Reforms need to continue and go even further.”
FILE – RECENT, MADRID, SPAIN
4. Various shots, Ministry of the Economy and Finance
JULY 2011, WASHINGTON DC
5. SOUNDBITE (English) James Daniel, Mission Chief for Spain, International Monetary Fund:
“The deficit is definitely being cut quickly enough in Spain. The targets are entirely appropriate. They’re necessary for debt sustainability and they’re necessary for credibility. Our concerns here are really around two things - the first is we’re concerned the macroeconomic projections may be a bit optimistic; and secondly, we’re concerned that some regions may not deliver on their targets. What does this mean? It means that additional measures should be identified, good quality measures for the medium term, and all levels of government in Spain need to deliver on their commitments.”
FILE – RECENT, MADRID, SPAIN
6. Med shot, trucks outside shop
7. Various shots, butcher at market
JULY 2011, WASHINGTON DC
8. SOUNDBITE (English) James Daniel, Mission Chief for Spain, International Monetary Fund:
“Well, on the positive side there has been some improvement in terms of rebalancing the economy. Exports are doing quite well, imports have come down, and the construction sector is much smaller. Unfortunately, this is not enough to deliver the employment growth we’re looking for. Unemployment is unacceptably high, and this is Spain’s real problem. This is Spain’s Achilles’ heel and it is here where bolder action is required.”
FILE – RECENT, MADRID, SPAIN
9. Various shots, Spanish banks
10. Med shot, people on street
11. Med shot, women using ATM machine
JULY 2011, WASHINGTON DC
12. SOUNDBITE (English) James Daniel, Mission Chief for Spain, International Monetary Fund:
“A lot of progress has been made on the banking sector over the last 12 months. Capital has been raised, losses have been recognized. The savings bank sector has been fundamentally overhauled. They’re much bigger institutions, much stronger, and they’re raising money from the markets and not from the government. This is all very good. Nevertheless, the outlook for the banks is going to be difficult given the economy. This means that the cost saving has to be rapidly and aggressively implemented, and capital buffers need to be continued to be strengthened.”
FILE – RECENT, MADRID, SPAIN
13. Various shots, people at supermarket
Spain’s economy has stabilized this past year with a modest recovery amounting to 1.6 percent of GDP projected to take hold in 2012. But as recent developments in the sovereign debt markets have made clear, Spain is not out of the danger zone yet.
The government will have to persevere with reforms to further build market confidence and to create a new growth model that can generate jobs for the country’s millions of unemployed.
As the International Monetary Fund (IMF) wraps up its annual health check of the Spanish economy, IMF Senior Economist Jerome Vacher discusses what is needed for Spain to firmly put the crisis behind it saying “reforms need to continue and go even further.”
IMF Mission Chief for Spain James Daniel added “additional measures should be identified, good quality measures for the medium term, and all levels of government in Spain need to deliver on their commitments.”
Commenting on positive development, Daniel said “there has been some improvement in terms of rebalancing the economy” adding that “exports are doing quite well, imports have come down, and the construction sector is much smaller.”
Although there is good news, Daniel added that “the outlook for the banks is going to be difficult given the economy” and there is a need for cost saving to be “rapidly and aggressively implemented and capital buffers” to be strengthened.”
