Spain's prime minister announced more measures Wednesday to rescue an economy that has gone from being Europe's envy to bordering on recession, but opposition leaders dismissed them as window dressing. Jose Luis Rodriguez Zapatero announced a $4.3 billion (3 billion euros) credit line for the construction industry, which was once the driving force behind an economy that posted a decade of solid and sometimes robust growth. But the economy is now in free fall amid a collapse in home sales, sharply higher interest rates and banks spooked by credit turmoil in the US and elsewhere. Zapatero said government spending next year would increase at a slower pace than originally planned, part of an effort to protect public coffers sapped by a drop in tax revenue and higher outlays for fast-growing ranks of unemployed workers. The Socialist party leader also urged Spaniards to have confidence in their once-buoyant economy, but warned the next few quarters will be “tough and complicated.” Zapatero addressed parliament at his own request amid soaring unemployment - at 10.7 percent it is the highest in the European Union, according to the bloc's statistics agency Eurostat - inflation of nearly 5.0 percent and economic growth that has all but stagnated in just a year. In 2007, Spain posted GDP growth of 3.8 percent but the economy barely expanded at all in the second quarter of 2008 - just 0.1 percent compared to the first quarter - and Finance Minister Pedro Solbes warned Tuesday that Spain runs the risk of slipping into recession. That news from Brussels came as Zapatero was speaking in Madrid, and he vowed to “fight to defeat” the gloomy prediction. Every day seems to bring another piece of dismal economic news. On Tuesday, for instance, Ford and General Motors announced they were laying off up to 1,900 workers in Spain because of plummeting demand for cars.
