U.S. Markets close in 5 hrs 41 mins

Spain's Rajoy takes EU defence as far-right threatens

Patrick Rahir and Michaela Cancela-Kieffer
1 / 2

Rajoy promised to strive for a rapprochement with Catalonian government when he took power again in November, to solve what he has dubbed Spain's most serious problem

Rajoy promised to strive for a rapprochement with Catalonian government when he took power again in November, to solve what he has dubbed Spain's most serious problem (AFP Photo/Gerard JULIEN)

Madrid (AFP) - Spain's Prime Minister Mariano Rajoy leapt to the defence of Europe in an interview, describing it as the "best region in the world" but warning it could implode if populists win elections this year.

"There are many populists, extremists and radicals that blame Europe for all their problems, real and imaginary," Rajoy told AFP this week at the prime minister's official Moncloa residence.

"We have to fight them by firstly telling the truth: Europe is the best region in the world in terms of democracy, freedom and economic and social progress," he said.

"We have in Europe a model welfare state, pensions, public healthcare and education that exists nowhere else in the world," said the premier of one of the most Europhile countries in the European Union.

The 61-year-old, who was re-elected this month as leader of the conservative Popular Party (PP), took the helm of government in late 2011 when the country faced dire recession, but has brought it back from the brink.

And as anti-EU parties across Europe and US President Donald Trump welcome Brexit, the Spanish leader has dropped his usual reserve to speak out against populism and for Europe.

- 'End of Europe' -

"A victory of the populists would be the end of Europe and it's the worst news we could have," he said.

Without naming names, he criticised "those who talk about organising referendums to pull their countries out of the EU".

Both Marine Le Pen in France and Geert Wilders in the Netherlands, who are riding high in the polls, have promised votes on EU membership should they be elected.

Rajoy said however that Britain's shock decision to leave the EU might provide the opportunity for the bloc to close ranks and tighten its integration. He said he for one supported "fiscal union" as well as a single energy market and a single digital market.

"It would be totally absurd for Brexit to create divisions between member states," as feared by European Commission chief Jean-Claude Juncker, who recently said he feared Britain could divide EU states during Brexit negotiations.

"Honestly, I don't believe that," he said.

Rajoy said he hoped to see ties between Washington and Europe ease after a phone call he had last week with the US president in which both sides expressed "the will to have good relations".

"Let's have constructive international relations, trying to destroy one another does not seem the right way to me".

But he appeared to be in no hurry to heed US Defence Secretary James Mattis' warning to NATO allies to increase military spending or risk seeing Washington "moderate its commitment" to the alliance.

Spain spends less than one percent of its GDP on defence, far below NATO members' pledge to reach two percent by 2024.

"We will gradually increase our military spending, but when circumstances are right," Rajoy said, pointing out that his government was working to reduce the public deficit to the EU's 3 percent ceiling after a damaging economic crisis.

"It's hard to do everything at once."

- Deficit pledge held? -

Spain is only just emerging from a crisis sparked in 2008 when a property bubble burst.

Under Rajoy's watch, unemployment has gradually come down from a high of nearly 27 percent in 2013 to 18.6 percent, still well above the eurozone average and the second worst rate in the EU after Greece.

Critics also say that many jobs are temporary and precarious and that drastic spending cuts by Rajoy's government to ease the crisis have raised poverty and inequalities in the country.

Rajoy pointed out that his government had managed to bring down the public deficit to 4.6 percent of GDP last year from a high of 11 percent, and was aiming for 3.1 percent in 2017.

But the European Commission warned this week that Spain would be unlikely to reach that target, tabling more on 3.5 percent.

"Spain intends to keep its promises," Rajoy said.

"But it is growing at 3.2 percent, double the growth of the EU. More than 500,000 jobs were created last year.

"We want to keep our promise on the deficit. So if we exceed it by one or two tenths of a percentage point.... But I will try and avoid that."