Spanish EU presidency stumbles into action (News Feature)

By Sinikka Tarvainen Jan 7, 2010, 2:08 GMT

Madrid - When hackers substituted the picture of Spanish Prime Minister Jose Luis Rodriguez Zapatero with that of British comic character Mr Bean on the Spanish European Union presidency's website, the incident attracted instant attention.

'Mr Bean is famous for his stumbles and mishaps,' Britain's Financial Times commented, reflecting a certain distrust in Spain's capacity to steer the EU at an institutionally and economically sensitive time.

Spain took over the rotating EU presidency on January 1, facing the task of beginning to apply the EU's Lisbon Treaty, which is meant to make decision-making simpler and swifter.

Zapatero is the first leader holding the EU presidency to share power with a permanent EU president and a de facto foreign minister, a situation which could create some tension, observers said in Madrid.

Earlier this week, permanent EU president Herman Van Rompuy called an economic summit for February at the same time as Zapatero was seeking advice from a group of 'wise men,' who included former European Commission president Jacques Delors, on how to guide the EU out of its economic crisis.

Those distrustful of the Spanish EU presidency point at Spain's own economic woes, with Spanish commentators asking how a country facing its worst recession in 60 years can be trusted to manage the EU's economic recovery.

When Zapatero's predecessors Felipe Gonzalez and Jose Maria Aznar presided over the EU, Spain boasted one of Europe's most booming economies. Yet the meltdown of the overheated property sector hit Spain hard from 2007 onwards, dragging other sectors down with it.

The number of the jobless has doubled in two years, with unemployment now running at nearly 20 per cent, twice the EU average.

The government has spent lavishly on public works, managing to create short-term employment for more than 400,000 people.

The measures to keep unemployment at bay have contributed to creating a budget deficit more than twice the size allowed by the EU, which sets the limit at 3 per cent of gross domestic product (GDP).

Spain's economy will take longer to recover than most other EU economies, with the European Commission not expecting the country to rise out of the recession until 2011.

The government has announced an austerity plan which was expected to be watched closely by other EU member states.

The crisis has also revealed the inadequacy of Spain's economic structures, with Zapatero's socialist government launching reforms to reduce the weight of the construction sector and of a low skilled workforce towards a more modern and competitive economy.

Zapatero's 'new economic model' - which most experts see as a timid step in the right direction - looks remarkably like Madrid's plans for the EU, a government official admitted.

The EU's economic crisis has put the spotlight on the need to seek a real economic union based on more competitiveness, education, innovation, environmental sustainability, solid social policies and a better financial monitoring system, Zapatero and Van Rompuy wrote in a joint article.

On the foreign policy front, Spain's most notable plans have included controversial moves to upgrade the EU's relations with Cuba.

Such plans got off to a jumpy start when Havana barred entry to a Spanish member of the European parliament known for his contacts with Cuban dissidents.

Spain protested to Cuba over the incident, which did not alter Madrid's plans of substituting 'isolation, blockade and embargo' against the island with milder forms of pressure, Foreign Minister Miguel Angel Moratinos said.

The incident nevertheless cast doubt over whether such a strategy would work better than the EU's current one to increase freedom of opinion on the island, the daily El Pais said in an editorial.