Global Players: José Luis Rodríguez Zapatero, Prime Minister, Spain

“The worst phase of the crisis has passed but we have still to make a great collective effort to ensure that the recovery begins as soon as possible.”

- José Luis Rodríguez Zapatero, announcing that the worst of the recession is over for Spain- Sept. 2009

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Not too long ago, Spain was coasting on a wave of well-being, when it had a robust GDP growth and was Europe’s leading job creator. It was such an economy that Prime Minister José Luis Rodríguez Zapatero took over in 2004. But today, he governs a country with 18% unemployment, the highest in the Euro zone, mostly due to the collapse of a construction boom.

Zapatero might have a tough task at hand but his unflappable demeanor and calm personality will come in handy. Born in the Castillian town of Valladolid, Spain, Zapatero’s childhood was influenced by “late night conversations with my father and brother about politics, law or literature.” He studied law at the University of Leon where he continued to work as a teaching assistant after graduation.

When he was just 16, Zapatero attended his first political rally organized by the Spanish Socialist Workers Party (PSOE) and the speech of Felipe Gonzalez, the party leader and future prime minister of Spain, indelibly stamped a lifelong influence on him. He joined the Socialist Party two years later, and became the youngest Member of Parliament at age 26. He quickly climbed up the ladder through the years to become the Secretary General of the Party in 2000. In 2002, he became a Socialist candidate for the next General Elections, which he won in 2004 to become the Prime Minister.

One of his first moves after winning the election was the withdrawal of troops from Iraq, which drew criticism and cold shouldering mainly from the U.S. However, his first term in office was characterized mostly by his social reforms, where he increased the minimum wage and pensions, brought in a gender equality law and passed an amnesty for the thousands of immigrants illegally working in Spain. His reforms have been a mixture of good and bad for Spain and its economy. Since 2004, Spain enjoyed a prolonged period of strong economic growth, averaging 3.5% per year. But Zapatero’s ‘humane’ approach to immigrants backfired. Although it added a multitude of new contributors- in other words cheap labor- to Spain’s booming economy, it also triggered an avalanche of uncontrolled immigration that the country is struggling with today.

In 2008, Zapatero won the elections again for a second-term. By this time the global financial crisis was wreaking havoc. Spain’s economy had degenerated, retaining hardly a touch of its former shine. This was largely due to rising unemployment and an overheated construction industry, which had fueled Spain’s incredible growth over the past decade. Although Spain had reached ecstatic heights due to low-cost credit and construction, when the housing bubble burst, Spain experienced a reversal of fortune. Instead, Spain now led the collapse in the region, with a full four million people stripped of their jobs.

Zapatero, 48, is a self-proclaimed visionary whose strategy to confront Spain’s problems maps a shift away from residential construction and a new focus on sectors that show growth and promise such as education, biotechnology and renewable energy. But experts contend that Zapatero is long on visions but short on practicality – Spain’s budget deficit is expected to rise to 9.5% of its GDP in 2010 according to the Organization for Economic Cooperation and Development. His critics argue that he lacks a plan for creating jobs or for financing his futuristic visions and generous social policies.

Spain’s prime minister recently declared that the worst of the recession is over for Spain, as the country’s economy contracted in the second quarter by 1.1%, an improvement over previous months. Although difficult months still lie ahead, Zapatero provides hope that Spain might be witnessing the much sought after green shoots of recovery after all.

Image Credit: Guillaume Paumier under a Creative Commons license.