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Aznar: Europe north-south split emerging

By Al Goodman, Madrid Bureau Chief
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How to solve Europe's economic woes
  • Jose Maria Aznar says northern European countries taking more decisions for south
  • Aznar says such intervention "increases the lack of credibility of our economies"
  • Says "strong" responsibility for the crisis lies with Germany, France
  • Structural reforms would lead to more competitive economies, growth and job creation, he said
  • EU Economy
  • Spain
  • Jose Maria Aznar

Madrid, Spain (CNN) -- The economic crisis in Europe is leading to a shift in which the northern countries increasingly will make decisions over fiscal and monetary matters to be implemented by the southern countries, former Spanish Prime Minister Jose Maria Aznar told CNN.

"There are the countries of the north of Europe taking decisions and the countries of the south of Europe that are living under intervention. This division exists," Aznar, a conservative elected to two terms in Spain from 1996 to 2004, said in an interview.

"Another division exists in the euro zone. This is one of the consequences of this situation. If you read in the newspapers, you hear on the TV stations, the European Union explains the decision that must be taken for the Spanish government or the Greek government," Aznar said.

"This is a very tough political consequence. And I wish for my country another situation," he added.

He said he wouldn't be surprised by further stock market volatility in countries such as Greece, Spain, and Portugal.

"Every day, every week without taking decisions is a problem for us, is a very wrong message for the markets and increases the lack of credibility of our economies," Aznar said during the interview at his conservative FAES think-tank foundation in central Madrid.

"But it's necessary to demonstrate we are capable to stop this indiscipline in the budget and stop increasing of debt and beginning the structural reforms that are improving the situation," he added.

The structural reforms would lead to more competitive economies, growth and job creation, he asserted.

"Germany and France have very strong responsibility in the history of this crisis when both established a change in the rules of the stability pact. This decision provoked a feeling about irresponsibility, more spending, more debt, increasing in a lot of countries," Aznar said, referring to what he said were the two countries' actions a few years ago.

But now, he added, Germany and France's "responsibility is trying to avoid another crisis in the euro zone. And the responsibility is trying that the situation in some countries -- Greece, Portugal, even Spain -- does not produce a contamination in other countries."

Aznar said the austerity plan that his successor, two-term Socialist Prime Minister Jose Luis Rodriguez Zapatero, is implementing in Spain -- including a 5 percent cut in government worker pay in an attempt to reduce the deficit -- won't be enough.

"The problem is the lack of credibility, because more responsibility in this crisis is the responsibility of the (Spanish) government," he said.

Spain has 20 percent unemployment, far higher than the EU average, and Aznar called for a fresh approach with a new government.

But when asked if he would run again, he quickly said that his conservative Popular Party is in good hands under Mariano Rajoy, a former Aznar aide who succeeded him at the party's helm.