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Saturday 30 August 2014

Debt Crisis: Spanish anger as pictures of cigar-smoking PM Rajoy emerge on budget day

Published 27/09/2012 | 08:28

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Protestors shout during a demonstration near the Spanish Parliament against austerity measures announced by the Spanish government in Madrid

PICTURES of Prime Minister Mariano Rajoy enjoying a cigar on New York's Sixth Avenue were splashed across Spanish newspapers on Thursday as his government prepared to unveil unprecedented austerity measures.

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The conservative leader's conspicuous taste for the finer things in life jarred as he asks Spaniards to accept yet more painful sacrifices to restore public finances.

Some Spaniards said on Twitter the photo of Rajoy outside Radio City Music Hall reminded them of Marie-Antoinette, the queen beheaded during the French revolution after reportedly saying that people should eat cake if they had no bread.

A spokeswoman for Rajoy said the prime minister had been on an especially tight schedule in New York -- meeting other leaders, addressing the United Nations and giving media interviews -- and the short walk was his only breather.

But the image of him breathing cigar smoke recalled another incident that raised doubts about Rajoy's sensitivity for public opinion.

The day after Spain sought a €100bn lifeline for its banks in June, he took a few short minutes to announce at a news conference that he had saved the country, then flew to Poland with his son to watch the national team playing soccer.

Many newspapers ran pictures of Rajoy cheering the first goal on their front pages the next day alongside the news of the European bailout for debt-laden Spanish banks.

Now, as the country braces for another likely rescue package - this time for the state - with one in four Spanish workers unemployed, his cigar-toting lifestyle seems to jar even more with a grim, angry national mood.

"This guy is an ace communicator," a European diplomat told Reuters with heavy irony on Wednesday after Rajoy said he would not request aid until forced to do so by financial markets.

The premium investors demand to hold Spanish rather than German 10-year debt jumped more than 45 basis points that day.

Many European policymakers, market analysts and even Spanish government officials say poor communication has done as much to keep Spain in the firing line of the euro zone debt crisis as the country's inherent economic problems.

While in New York, the prime minister urged a business audience not to pay attention to images of riot police charging anti-austerity protesters outside parliament in Madrid but to focus instead on the "silent majority" of non-demonstrators.

His detached attitude contrasts with the way Spain's middle class is being dragged into poverty by a crisis that started in 2007 when a decade-long property bubble burst. Close to six million people are now unemployed and hundreds of thousands have had their homes repossessed.

The weekly magazine Interviu reported this week that the dinner served aboard Rajoy's government-paid flight back from the football trip to Gdansk in June cost €1,000.

Nine people, including Rajoy, were aboard the Spanish army Falcon 900, which always carries an extra refill of Cardhiu whisky when the prime minister travels.

The meal included filet mignon steak and turbot, seven bottles of Rioja and Rueda wine as well as 10 beers.

This was not an unusual treat among Spanish elites. Interviu reported similar catering largesse under former Socialist Prime Minister Jose Luis Rodriguez Zapatero.

But it came at the worst moment for Rajoy, whose popularity has plummeted since he was elected by a landslide last November.

Hundreds of thousands of Spaniards have been demonstrating periodically since July against more than 60 billion euros in public spending cuts, including tough curbs on healthcare and education, new cuts in civil servant wages and tax hikes.

German and EU officials laud Spain's efforts in implementing structural economic reforms and spending cuts but say fixing the government's communication policy should be Rajoy's top priority.

"They are really doing more than anyone would have expected. For an economy of its size, it really is an impressive set of steps that are being taken," said a senior European diplomat. "But they've been really dreadful in their communications."

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