Spain's economy picked up steam in the first three months of the year thanks in part to strong exports, underscoring expectations that growth will be rosier than initially forecast this year as prospects across the euro zone also brighten. But, as David Pollard reports, there's still no sign of any policy change from the ECB.
It wasn't the greatest start to a week for Jeroen Dijsselbloem. The Eurogroup chairman facing calls to resign. After he suggested southern European countries had squandered their money on 'booze and women'. Not true, said outraged Spanish officials. In a week where they also produced a very upbeat growth outlook. Portugal too. SOUNDBITE (Portuguese) PORTUGAL FINANCE MINISTER, MARIO CENTENO, SAYING: "Growth in the second quarter may be above 3%, given the economic acceleration we are seeing." For Spain, a 0.8 per cent rise on the quarter already puts it at a three per cent annual rate. If that continues, it could hit levels not seen since before the financial crisis. Forcing some difficult, if attractive, choices. SOUNDBITE (English) CHIEF ECONOMIST, WORLD FIRST, JEREMY COOK, SAYING: "Key issues moving forward for Spain as they have to focus on where their economy is growing. If it's tourism, if it's investment, if it's manufacturing, then the signals do look good." A thornier decision for the ECB is whether to ease back on massive monetary stimulus. As the euro zone recovery gets faster, Germany's calls for less QE and higher rates get louder. Mario Draghi appears, though, unwilling to hear. SOUNDBITE) (English) ECB PRESIDENT, MARIO DRAGHI, SAYING: "There is no reason to deviate from the indications we have been consistently providing ...". In other words, no immediate change to policy. ... SOUNDBITE (English) CHIEF ECONOMIST, WORLD FIRST, JEREMY COOK, SAYING: "Until we see a rise in core CPI, up to maybe 1.5 per cent, then I don't think he will be happy to say 'okay the worst is over, we can start taking the stabilisers off the euro zone economy'. Especially as political wobbles persist ... Spain's government currently bracing for a vote of no-confidence in parliament. Amid public anger at the corruption scandals that have shaken the ruling party.