In an interview on Antena 3 TV this morning, Economy minister, Pedro Solbes, said that the recent upward trend in interest rates was "reaching its end," and despite predicting "additional rises" went on to predict that "we're now practically at the point when they begin to stabilise and may even start to fall."

When asked to comment on the overall performance of the Spanish economy, Mr Solbes pointed out that the government had already been expecting a slowdown in growth over the second half of the year after "a period of very rapid growth," but insisted that 2007 and 2008 GDP growth rate targets will be achieved.

Mr Solbes went on to dismiss rumours of a difference of opinion between himself and president Zapatero concerning the recent financial market crisis and the current economic situation, and also shrugged off last month's disappointing rise in unemployment, pointing out that it is normal for the total to rise during August, and by stressing that, since the socialists came to power following the 2004 general elections, unemployment has, in fact, fallen by half a million and 2,750,000 new jobs have been created.

Solbes admits economic 'uncertainty'
By: thinkSPAIN
Thursday, September 6, 2007

In an interview broadcast on the Cadena Ser radio station, government second vice-president and Economy minister, Pedro Solbes, admitted yesterday that the economic situation in Spain is "more uncertain than a couple of months ago," although he went on to predict that "this country will continue growing in 2008 at around 3%." Mr Solbes also said that although two months ago "we were predicting that 2007 would end stupendously, now there is an uncertain and undefined situation."

With respect to the announcement later today by the Central European Bank (BCE) concerning interest rate levels, Mr Solbes said that the BCE should have "complete freedom" when it comes to decision-making. "They are not automatons who take decisions based on last-minute facts or figures, but excellent professionals," who will take into account all factors that affect the bank's strategy. It is feared that the BCE will announce a 0.25% increase in the euribor rate to 4.25%.

When asked about the disappointing rise in unemployment during August (+57,958, +2.9%), the minister said that "it is not a good result," but pointed out that, to get a clearer picture of the trend, it is necessary to analyse year-on-year results" (+44,619, +2.25%).

In response to the recent attack on the government's economic performance by PP leader, Mariano Rajoy, who described August's unemployment figures as "the worst in history," Mr Solbes said that: "I have the feeling that the PP is having a tough time because the economy is doing well."