Bank of Spain urges momentum on reforms in election year

The  Bank of Spain yesterday  urged the country’s regions to keep a tight rein on spending and said Spain, which faces the prospect of a political shake-up in an election this year, needed to press on with reforms to get the economy on track.
The central bank said in its annual report that the process of adjusting and rebalancing the economy had not yet finished.
“There are still big challenges for economic policies to overcome the consequences of the crisis and to achieve sustainable economic growth,” Bank of Spain governor Luis Maria Linde said in a speech accompanying the bank’s annual report.
The call for more reforms was made with a national election due around November which promises to bring Spain’s most fragmented political landscape since the return of democracy in the mid-1970s, casting more uncertainty over what direction policies will take.
New parties, including anti-austerity forces such as Podemos (’We Can’), are expected to gain traction.
Prime Minister Mariano Rajoy’s pitch to voters is that his his centre-right People’s Party (PP) can generate the stability needed to keep the economy on the right footing, now it is growing again after six years in and out of recession.
But many Spaniards have yet to feel the recovery. One in four eligible to work are still unemployed, just one sign that key imbalances remain. The PP suffered its worst result in more than 20 years in local elections last month held in 13 of Spain’s 17 highly-devolved regions, and some critics also say the pace of reforms has already slowed ahead of the polls.