Gonzalez: Spain should negotiate its own bailout terms

Former Spanish Prime Minister Felipe Gonzalez Image copyright AFP
Image caption Former PM Gonzalez is critical of the way the financial crisis has been handled

On 26 July the European Central Bank (ECB) boss, Mario Draghi, assured the markets he would do "whatever it takes" to save the euro. "Believe me it will be enough," he added.

On 6 September 2012 he delivered on that pledge: the ECB finally agreed to buy up the debts of countries in danger of default and hold them.

The effects in Spain have been tangible. The stock market - which had lost a third of its value since November - has recovered.

The yield on a 10 year Spanish bond has fallen back out of the danger zone - though it remains high, and Spain soon has to borrow about 30bn euros.

This has left the Spanish government with an acute dilemma: since their immediate problems have been solved by the mere pledge of a bailout - why accept it?

Since 6 September there have been "tough negotiations" - with Prime Minister Rajoy insisting that a bailout will only be requested if the basic conditions are those that Spain already adheres to.

And there are strong voices in Madrid saying Spain, even now, should not request help.

Meanwhile, the Eurogroup leader Jean Claude Juncker has called for tough new conditions.

I have been speaking to veteran politician Felipe Gonzalez, the Spanish prime minister for four successive terms in the 1980s and 1990s, about this dilemma.

Mr Gonzalez is scathing about the way the Rajoy government has handled the crisis:

"My impression is simply that the government doesn't know what to do?" he says.

"It's not that the government is going on the wrong path - you could always want things done differently.

"My impression is that, right now, the government doesn't understand what to do with the Spanish economy - nor the role that Europe should be playing in it," he adds.

He believes Rajoy should take the ECB money: using it to negotiate a bailout on its own terms.

"It has to be a Spanish proposal," he insists at our interview in his private office in Madrid.

"This so called proposal from the government - 'let's wait and see what the others are doing' - that's wrong.

"They should say: 'Here is my position; this is what we want' and then the answer will be - either yes or no."

Mr Gonzalez, one of the architects of Spain's entry into the EU, and of the "social Europe" that was seen as quid-pro-quo for the peaceful overthrow of Franco's dictatorship believes the social deal is now in danger.

"I support the Obama strategy, not the current EU strategy. And the European strategy is too influenced by German interests.

"To govern a public space that is shared …the institution has to represent the interest of the 17 countries.

"That institution in Europe is substituted by the will of Germany, and its associates, which obviously doesn't represent the actual interest of the 17."

Recent days have seen the German chancellor greeted in Madrid with "Fourth Reich" placards, a massive demo in Catalonia for national independence, and hundreds of thousands of trade unionists on the streets - with the promise of an Occupy protest against parliament next week.

But Mr Gonzalez believes much of the current unrest currently gripping Spain could be dissipated if people were given a clear explanation of the way forward:

"People protest with reason because they don't know where we're heading towards, amongst other things. Including the Catalan mobilization and the one in Madrid.

"Nobody has a serious explanation of what the government wants to do - except for what the president says, which is 'We do what we have to, even if we don't like it'.

"So please explain what you are doing, and why."

Watch Paul Mason's full report on BBC Newsnight on Wednesday, 19 September 2012 at 2230 BST. Or watch afterwards on BBC iPlayer.

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