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Europe's Spanish Dilemma: Who Does What?

Poor old USA has only one President. We in Europe are lucky enough to have three.

We have EU Council President Herman Van Rompuy, European Commission President Jose-Manuel Barroso and Spain, a country which holds the rotating EU Presidency.

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Of course, three times the leaders aren’t necessarily a recipe for three times the leadership and there might just be a nagging fear that on this side of the Atlantic we are suffering from three times the confusion.

Our three Presidents do have different roles as laid out in the wonderfully simplified EU Constitution – sorry, Lisbon Treaty (a totally different incarnation, I can assure you).

Despite the clarity that Lisbon is supposed to have delivered, I fear that the players themselves seem a little unsure of who does what.

A case in point was just after the Treaty ratification back in November last year. Rompuy and Barroso sat on the podium with Fredrik Reinfeldt , the Prime Minister of Sweden (which up until January 1st held the rotating presidency), and were asked by one reporter: "which of you will Barack Obama be calling when he wants to talk to Europe?"

The answer came back nervously from Van Rompuy: "We are anxiously waiting for the first call." Oh how the press corps laughed but for me such levity disguised the confusion at the heart of Europe. It just felt a little embarrassing. It was a serious question with a fudged, jokey answer.

According to the Wall Street Journal, even President Obama is a tad confused. Obama is pulling back a little on international travel this year to concentrate on his domestic agenda.

One casualty of the change in US emphasis appears to be the US-EU summit planned for May in Madrid. Apparently a US official cited in the article says that confusion as to which European President is actually hosting added to the US reluctance to commit to the annual pow wow.

Spanish Prime Minister Jose Luis Rodriguez Zapatero may still be hoping to resurrect the summit as one of the centre pieces of the Spanish rotating Presidency but he has far more pressing problems on the domestic front which make such international disappointments pale into insignificance.

Too Big a Burden for Spain?

Spain's presidency has as its bedrock the '2020 Strategy' plan. A plan to create jobs and to make Europe a 'smarter, greener social market'. But Spain itself has the worst jobs picture anywhere in the EU27.

The Spanish jobs figures are scary on the surface and even more appalling just under it. Spain has unemployment around the 19 percent mark, nearly double the EU average of just under 10 percent.

But it's the country's young workers who are bearing the real pain, with 43 percent of 16 to 24 year-olds out of work. We talk a lot of numbers on CNBC but 43 percent is one of the most staggering to date for me.

Spain's recipe for jobs recovery though is hampered by other, equally worrisome economic factors. The country has a budget deficit of over 11 percent of GDP, which has led the Government to announce an austerity budget which will get the deficit back to 3 percent by 2013.

The Spanish budget plans to save 50 billion euros ($69.7 billion) by 2013 by cutting Government spending and by increasing taxes. This may bring down the deficit but there remain huge questions as to whether it can create jobs in an economy which is beset by structural inefficiencies, especially in its uncompetitive labor market.

Spain's recovery plan is fraught with difficulties and yet, unlike fellow EU strugglers such as the UK, it cannot devalue its currency to boost competitiveness. As we have seen with Greece, Spain's Euro zone membership has meant the country has forsaken one key tool for recovery.

But are Spain's economic problems actually being exacerbated by an unfocused broader EU leadership made up of several entities competing for top-billing? Is Spain's plight made all the more difficult by holding one of the triumvirates of EU presidencies?

When the country needs to knuckle down and concentrate on jobs, deficits and growth, is it spending too much time on noble but secondary goals?

Zapatero said in a speech last December: "…Europe has been and continues to be a successful project. We must not forget it; and those who, because they are still young, have not experienced its history, must learn it."

I am not a politician but shouldn't Zapatero and his fellow EU leaders be trying to underline the merits of the EU to the 43 percent of young Spaniards who are out of work by finding them jobs now, rather than compelling to visit the history books?

Correction: An earlier version of this article identified the speaker of this quote "We are anxiously waiting for the first call" as Fredrik Reinfeldt. It was Herman Van Rompuy.

Contact Europe: Economy

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