EU deal with Greece can be reached, Spain economy minister says

Greece will be able to reach agreement with its European partners and any turmoil poses little risk for Spain where the government is poised to raise its growth forecasts, Spanish Economy Minister Luis de Guindos said.

De Guindos, who has long been tipped to lead the Eurogroup of eurozone finance ministers, said it was not yet clear what Greece’s new anti-austerity government was proposing as an alternative to deal with its foreign debt.

But in an interview for the Reuters eurozone Summit on Thursday, he said he was convinced a deal with Athens could be struck as long as it met eurozone rules, and that a Greek exit from the euro was not an option.

“We need to hear what Greece’s proposal is, we have heard a lot of noise,” De Guindos said, adding a plan should be put to Eurogroup members.

Athens’ 240 billion euro ($275 billion) eurozone bailout program runs out at the end of February and its new government says it has no intention of extending it.

It has backed away from calls to write off some of the country’s debt pile, however.

“We are completely open to keep showing solidarity once we know what Greece’s plan is and if that plan is in line with the rules in place in the eurozone,” De Guindos said.

He said there were little sign that turmoil around a Greek debt stand-off was affecting Spain, which found itself at the center of a eurozone crisis two years ago when it was struggling to rein in a gaping deficit.

Spain has since exited recession, helped by a jump in exports and recovering domestic demand. A weaker euro and lower oil prices are now giving the economy an extra boost, and De Guindos said growth forecasts for 2015 would be lifted from the current 2 percent in April.

“Spain is on the path to having growth in the next four to five years of around 2.5 or 3 percent,” he said.

The European Commission has also raised its growth predictions for the eurozone and for Spain, where it sees the economy expanding 2.3 percent this year.

While Spain avoided a sovereign debt bailout, it needed European help for its weakest banks in 2012. De Guindos said he saw no Greek parallels for Spain, which holds general elections by year-end with anti-austerity party Podemos (We Can) rising in opinion polls.

“You don’t have the backlash (here) in relation to the troika,” he said, referring to the trio formed by the International Monetary Fund, the European Central Bank and the European Commission, which supervised the Greek bailout.

De Guindos said Greece would have to keep talking to these bodies as a member of the eurozone. He conceded, however, that the troika could have dealt more sensitively with countries such as Greece and Ireland when they were bailed out.

“There’s an issue, which is national self-esteem,” he said. “There are many occasions when deep down you are right but if you don’t do things the right way, it can make everything more difficult.” [Reuters]