Aznar claims credit for whipping Spain into shape for EMU

Spain's conservative government yesterday celebrated the anniversary of what it calls "the triumph", although the Popular Party's election victory a year ago fell short of the absolute majority it craved.

Forced into an alliance with Catalan nationalists, Jose Maria Aznar's government has none the less been a modest success, particularly over its key objective: preparing the Spanish economy for European monetary union.

The Catalans, sometimestagged the "Germans of Spain" for their supposed dourness and efficiency, could hardly have been better partners for the task.

The drive towards monetary union had been passionately pursued by the Socialists under Felipe Gonzalez, and if Spain's criteria for membership are shaping up, much is due to Mr Aznar's predecessors. But as the 1999 deadline draws closer, it is understandable that Mr Aznar's government should claim all the credit.

Should Spain make it into the Maastricht corral, he may expect a conclusive electoral "triumph" next time round. Public opinion polls for the first time are putting Mr Aznar's government a whisker ahead of the Socialist opposition.

Spain's big companies think the economy is on course, according to an investigation by Coopers and Lybrand for Sunday's El Pais, a newspaper not given to praising the ruling party's achievements.

More than 240 companies in Madrid, Catalonia and the Basque country are unanimous in their support for monetary union, and urgently require the government to reform the labour market, reduce public spending and simplify tax.

But unemployment remains at more than 21 per cent, twice the European average, and new jobs are mainly on short-term ("junk") contracts. Protracted negotiations between employers and unions over labour reform, in which the unions detect a "sackers' charter", are likely to hit a crunch point this week.

The Catalan leader, Jordi Pujol, offered at the weekend to mediate. The Labour minister, Javier Arenas, declined the offer, saying he preferred the social partners to settle without government involvement.

The dispute is over the employers' desire to hire and fire without restraint, and the unions' wish to protect workers' rights and transmute casual employment of youngsters into some form of apprenticeship.

No one has a solution to Spain's unemployment rate, but since it is not a criterion for monetary union, the government is under no pressure to take a more hands-on approach.

On the Maastricht criteria however - the deficit, the debt, interest rates, inflation and the peseta - the government is clucking like a hen, tweaking here, hacking or snipping there, and exhorting further sacrifice. The figures, meanwhile, are creeping into line.

For 14 years, Spaniards had in Mr Gonzalez a prime minister who spoke like a human being, even though they didn't always believe him.

For the last year they have sat bemused before Mr Aznar and his ministers, who speak like robots and harry them with incomprehensible jargon. But if Spaniards sense things are going well, they will give him the benefit of the doubt. And Mr Aznar knows it.

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