Spain’s new Government ‘confident’ of getting country back on track

Spain's new Employment Minister Fatima Bañez says she is optimistic a new reform accord can be reached with employers and unions to help get the country's near 5 million jobless back to work.

Banez told Spanish National Radio she "will go all the way to seek an agreement with them to find the best way to make a labor reform that will truly create employment.''

She was speaking shortly before Friday's first Cabinet meeting under new conservative Government President Mariano Rajoy.

Rajoy has ordered unions and employers to come up with an agreement by early January, saying that otherwise the government would impose its own measures.

Spain has the highest unemployment rate of the 17 countries that use the euro at 21.5 percent.

Meanwhile, Spain's new Economy Minister Luis de Guindos said he was confident the country would emerge from its severe economic crisis, but failed to outline any new measures to help the ailing economy.

De Guindos said Spain "will return to the levels of prosperity that we should never have lost'' and that the country would regain "sufficient growth to generate jobs, which has to be the government's number one priority.''

New conservative Prime Minister Mariano Rajoy named the cabinet Wednesday and it was de Guindos' appointment that raised the most eyebrows, given that he once held a presiding post in Spain and Portugal for US investment bank Lehman Brothers, whose collapse helped spark the international financial crisis.

Rajoy this week pledged fresh austerity cuts totaling €16.5 billion ($21.6 billion) and promised reforms to encourage companies to hire and tax breaks for small and medium-sized firms that make up the bulk of the economy. He also laid out his intention to trim government personnel with a hiring freeze for most civil servant groups.

His government may announce further measures Friday after the first weekly Cabinet meeting.

Rajoy's party replaced the Socialists, who under Jose Luis Rodriguez Zapatero had been in office since 2004.

Spain has already made sharp cuts to its national spending and introduced several reforms under Zapatero in a bid to convince investors and the European Union, but the measures have so far failed to reboot the economy.