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Spain may be over the worst of the crisis, business group says

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(Globalpost/GlobalPost)

Beijing, Apr 26 (EFE).- "There are reasons to think the worst of the crisis has ended" and that Spain's economy may be poised to return to growth, a former Spanish secretary of state for the economy said here Friday before an audience including executives from China's major enterprises.

The economy could enter a new phase late this year or early in 2014, Alfredo Pastor said during the presentation in Beijing of "Spain: A Land of Opportunities," a report from the Spanish Business Council for Competitiveness, or CEC.

Acknowledging figures announced Thursday showing that Spain's unemployment rate has climbed above 27 percent, the economist described the high level of joblessness as the "painful" price of a labor overhaul "that has to bear fruit at some point."

Flexible labor practices, Pastor said, "cause more dismissals but also more hiring."

"It will take a long time to digest the unemployment caused by the real estate bubble," he said, referring to the decade-long property and construction boom that collapsed in 2007.

Pastor, who teaches at the prestigious CEIBS business school, reminded his audience that Spain advanced from relative poverty in the 1950s to become one of Europe's most dynamic economies prior to the global financial crisis.

"The ingredients for success are still there," he said.

Spain is an "innovative and well-prepared" country that boasts four of the world's top 20 business schools and firms that are among Europe's leaders in spending on research and development.

The CEC was created by the chief executives of 18 of Spain's largest global companies, including Inditex, Repsol, Acciona, Mercadona and Iberdrola, with the aim of promoting "Brand Spain" in China and other key markets.

"China is one of the strongest economies at this time and it is in a position to invest," CEC executive director Fernando Casado told Efe.

To bring down unemployment, he said, Spain "must have investment and we need to inspire confidence."

Spain is a "very important platform" for firms wishing to gain a foothold in Europe or Latin America and the country's biotech and information technology sectors are competitive and profitable, creating 335,000 jobs even amid the crisis, Casado said.

"It's good to know that there could be growth of 0.3 percent in Spain in the last quarter of 2013," Chinese Economy Ministry official He Zhenwei told Efe after hearing the presentation.

Others, however, were more cautious.

"Spain needs to be sure at what point it is in the crisis, whether it has reached bottom or not," said Vicente Luo, an executive with China International Corporation.

http://www.globalpost.com/dispatch/news/agencia-efe/130426/spain-may-be-over-the-worst-the-crisis-business-group-says