Prime Minister Jose Maria Aznar wants to make economic liberalisation the key theme of Spain's six-month presidency of the European Union, which struggles to match the levels of growth seen in the United States. Speaking to a group of Brussels-based reporters this week, Aznar made clear Spain was ready to do battle with member states such as France which resist opening key markets to competition. “If Europe does not (open up), the United States will resume strong growth while Europeans whistle into the blue sky and haggles over where various agencies should be located,” he said. Aznar was referring to an unseemly squabble among the 15 EU leaders at their last summit in December in Brussels about who should host a new Food Safety Agency and other bodies. Aznar, a conservative whose country holds the EU's presidency until June 30, said that the United States saw annual growth of at least three percent for every year but one of the 1990s, while the EU grew on average by less than one percent a year. “Why have Europeans invested massively in the United States? Because of America's flexibility. Why have economic conditions in Europe been worse? Because of our rigidities,” he said. Aznar denied that he wanted to foist the “American model” wholesale on Europeans but said Spain was blazing a trail by learning the right lessons from the United States. Figures from the Organisation for Economic Cooperation and Development (OECD) show Spain now has the most open economy in the industrialised world after Canada. In 2001, Spain - traditionally one of the poorest and least developed European economies - posted GDP growth of three percent, well above that of most other member states. Since taking office in 1996, Aznar has slashed unemployment from 22 percent to 9.2 percent at the end of 2001 while presiding over a stabilisation of public finances that ailing Germany, the EU's biggest economy, might well envy. Earlier this week, Germany received a warning from the European Commission over the size of its budget deficit, which reached 2.6 percent of GDP in 2001 - worryingly close to a three percent ceiling imposed at Berlin's own insistence by the EU's Stability and Growth Pact. Spain, by contrast, won a relatively positive assessment. Yet it was Spain and other poorer southern EU countries that had to work hardest to overcome German suspicions that they were not fit to join the euro single currency.

For Aznar, the big test will come in mid-March when he hosts a meeting of EU leaders in Barcelona devoted to the economy. “We cannot make the single market function properly with both interventionist countries and deregulated markets,” Aznar said in a thinly veiled reference to France.


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