Talks cover range of political and economic issues

Madrid

PRIME Minister Lee Hsien Loong kicked off his first official visit to Spain on Thursday by meeting the country's top diplomat and its highest-ranking economic official.

He began his day in Madrid with a meeting with Foreign Affairs and Cooperation Minister Jose Manuel Garcia-Margallo.

Mr Lee's press secretary said the talks lasted nearly an hour as they discussed a wide range of regional issues that included terrorism, the Islamic State (ISIS) militant group and the ongoing reforms in Europe.

Later in the day, Mr Lee had a meeting with Economy and Competitiveness Minister Luis de Guindos in his office, where they exchanged views on the state of the eurozone and the Spanish economy.

Mr de Guindos is a prominent figure in the eurozone. Last week, the 55-year-old was appointed the co-chair of the European People's Party's economy and finance ministers group. He shares the chairmanship with Swedish Finance Minister Anders Borg.

Singapore's economic relations with Spain have improved over the years. Last year, Spain was Singapore's eighth-largest trading partner in the EU and 43rd-largest globally.

Bilateral trade stood at S$2 billion last year, an increase from the S$1.7 billion recorded in 2013.

In foreign direct investments (FDIs), Spain is Singapore's 61st-largest investor in the world; the total FDI stock from Spain was estimated at S$140 million at the end of 2012. There are more than 200 Spanish companies operating in Singapore, including engineering firm Abeinsa, travel technology firm Amadeus and wind-turbine manufacturer Gamesa.

Mr Lee's two-day visit comes at a time when the Spanish economy - the fourth-largest in the eurozone - is seeing an upswing in its fortunes.

In its latest winter economic forecasts released on Thursday, the European Commission said that it expected Spain's Gross Domestic Product (GDP) to expand 2.3 per cent this year and 2.5 per cent next year - higher than its earlier forecasts of 1.7 per cent and 2.2 per cent respectively.

Spain emerged from a nine-quarter recession in mid-2013 and GDP grew by an estimated 1.4 per cent last year.

The country is still bogged down by high levels of unemployment, although the situation is improving. The current unemployment rate stood at 23.7 per cent at the end of 2014, down from a peak of 26.9 per cent in the first quarter of 2013.

With more reforms in the labour market, the European Commission projects the rate will fall further to 20.7 per cent of the workforce by 2016.

Following his two ministerial meetings on Thursday, Mr Lee and his delegation were hosted by Mr de Guindos to lunch with a group of Spanish business leaders. Mr Lee concludes his visit to Spain on Friday, after an audience with King Felipe VI and a meeting with Prime Minister Mariano Rajoy.