Spain Cuts Forecasts; Greece Layoff Vote
DOS SANTOS: Hello and welcome back. You're watching QUEST MEANS BUSINESS on CNN. Spain has softened its commitment to austerity. The government has decided to ease its deficit forecast for this year by nearly 2 percent. And it's also been given the go-ahead from the EU to postpone meeting its deficit targets not just for this year, but for two years to come. The government said that it needs to warn people in the market to expect a faster contraction this year than previously thought. We're talking about a level of minus 1.3 percent in total. We also saw the finance minister and deputy prime minister announcing these provisions. We're talking about Soraya Saenz de Santamaria, here, and she said that there was no need for major new reforms or taxes. Al Goodman joins us now, live from CNN Madrid with more on what the deputy prime minister had to say, and also to put this into context. So, Al, we've been talking about bad news for Spain for the last two days, because the unemployment record shot -- unemployment rate shot to a record yesterday. This is just two very difficult days for the Spanish government.</s>AL GOODMAN, CNN MADRID BUREAU CHIEF: This is really just a delay of the pain. There's been so much pain in Spain, and now, as you said, they're easing it off. They're postponing it until manana. And that's really what we have here. Because since Brussels has given them a couple extra years until 2016 to get the budget deficit down to 3 percent as a percent of GDP -- it was supposed to be next year -- that gives the government some breathing room, and that's what you hear the two key ministers announcing this day, that at the national government level this year, they're not going to apply any more real stiff austerity measures. But, they're still expecting the 17 regional governments and all the town halls to try to snip a little bit around the edges. So, there is going to be some pain, it's just not going to fall on the shoulders of the prime minister. Nina?</s>DOS SANTOS: And Al, how much of this has to do with the fact that obviously in the upper echelons of Brussels, well, the kind of austerity mantra seems to be changing its tune a bit. People are starting to realize that perhaps it hasn't worked?</s>GOODMAN: Well, the prime minister is right there at the top of the choir with Chancellor Angela Merkel of Germany on -- he was Mr. Austerity. But in recent days and weeks, we begin to hear the tune change just a little bit, first from the ministers, and then from the man himself, Prime Minister Rajoy, saying that we need some stimulus plans as well. But he doesn't really have anything in his pocket that he can throw in there as stimulus. So, it's basically been him keeping his hands off the pensions. That's what a lot of people fear is the next big cut, but we apparently are not going to get that. He has been able to sell, as you know, Spanish debt in the market. The interest rates have come down, they're not at those shocking 7 percent rates anymore. But they're still pretty high, especially when compared to Germany. So, they're far from getting out of the mess, and people in the streets are still very much feeling the pain here in Spain. Nina?</s>DOS SANTOS: OK. Obviously the lady behind you who is waving at us wasn't feeling the pain as much, Al Goodman, but you probably didn't see her during your report. Thank you very much for that. Al Goodman there on the streets of Madrid, bringing us the latest. Well, this weekend, Greek lawmakers decide whether to effectively sack 15,000 public workers to unlock nearly $12 billion worth of bailout loans. While they vote, protesters are planning rallies and demonstrations in Athens. Thousands of Greeks have taken part in anti-austerity protests and strikes. Some of those strikes and protests have actually turned violent. A little earlier, I asked the Greek minister for public order, Nikos Dendias, if he was expecting more unrest.</s>NIKOS DENDIAS, GREEK MINISTER OF PUBLIC ORDER: Well, one always has to be worried about strikes, especially in an economy under crisis, such as the Greek one. But I have to say that the signs that the Greek economy is finally getting out of the crisis. We're approaching the summer, we are expecting a record number of tourists this summer. So, please allow me to have the hope that there are no more strikes forthcoming, and eventually that the Greek economy will be coming out of the tunnel of recession.</s>DOS SANTOS: But we're talking about a country that's been in recession for five or six years now, successively. And also, unemployment is in the double digits. For many people, they don't see the light at the end of the tunnel, and that raised the specter of social unrest.</s>DENDIAS: Well, you're absolutely right in mentioning that Greece has been through recession for the last six years, and that's a record for any country that I know of. And also, the rate of unemployment is more than 25 percent. And especially in the younger generations, it's close to 45 percent and maybe even more than that. Taking into account that sort of adversity, I think that the Greek society had performed with admirable courage and has survived the difficulties. But I think that there are signs that there is light at the end of the tunnel, and I think that the Greek society now has finally seen that light. So, I do not really expect any sort of social unrest in the future, of course provided that eventually that better days in the economy do come.</s>DOS SANTOS: Well, Greece has always been a gateway to Europe for migrants coming from the east, and a lot of them have become stuck there by Greece's ongoing economic crisis. That again raised the potential for xenophobia. We've already seen a number of unfortunate attacks on migrant workers in Greece. As the minister for public order, what are you doing about it, and how worried are you about it?</s>DENDIAS: Well, I am worried about it, but I have to say that in general, the Greek society is not xenophobic at all. Rather, the opposite. Having said that, I think that we have taken all necessary measures to protect any human being in Greece, migrant or no migrant. Because, really, that is what a human being is entitled. Apart from that, of course, illegal migratory flows present a huge problem to Greece. Please be kind enough to think -- to account that Greece is receiving more than 90 percent of full illegal migrants of all the European Union, which is a huge amount. And if you add that to the existing crisis in the economy, it really creates a very difficult situation for the Greek society.</s>DOS SANTOS: Now, I'm speaking to you from London, you're currently in New York. These strikes start in two days' time. Are you going to be going back to Athens to deal with that situation?</s>DENDIAS: Well, I'm going anyway back to Athens tomorrow afternoon. I have to be in Athens, there's a crucial vote in the Greek parliament -- Sunday evening, so I have to be there.</s>DOS SANTOS: And now, time for tonight's Currency Conundrum. Who's famous face will appear on a new British five pound note? Is it A, Winston Churchill? Could it be B, Margaret Thatcher? Or C, David Beckham. We'll have the answer for you later on in the program. Speaking of currencies, the dollar is down against the British pound, the euro, and also the yen. We'll be back with plenty more QUEST MEANS BUSINESS after this.