Spain calls on EU to do more to boost growth

(MADRID) - The European Union must do more to boost economic growth and not focus solely on austerity to slash debt levels to defend the euro, Spain's new foreign minister said in an interview published Sunday.

"European institutions have a role to play," Foreign Minister Manuel Garcia-Margallo told the daily El Pais in his first print interview since his conservative Popular Party government came to power last month.

"If the European Investment Bank made twice the effort it made in the previous decade, we would have the same amount of money which the Marshall Plan had to rebuild Europe," he said referring to the big US-backed aid program that helped Western Europe recover after World War II.

"In addition, the European Commission has about 120 billion euros ($150 billion) of unspent money in its budget which could go to fighting youth unemployment. Austerity and stabilisation are needed, but you also have to create jobs."

EU member states have put in place massive cuts to public services to allow governments to reduce budget deficits and stabilise the euro single currency.

Garcia-Margallo's government has raised taxes and cut spending to reduce Spain's deficit even as it seeks to introduce structural reforms to try to revive the economy, which is poised to return to recession.

Spain emerged only at the start of 2010 from an 18-month recession, triggered by the global financial crisis and a property bubble collapse, which has caused the unemployment rate to balloon to 21.5 percent, the highest in the industrial world.