"Zapatero knows the political danger; each job lost is a nail in his coffin"

The US State Department was so concerned about the impact of the Spanish recession and the Socialist government's economic policies that it ordered its Embassy in Madrid to give it insights on "the credibility of Zapatero and his Cabinet," according to a secret cablegram sent on October 14, 2009.

Signed by Secretary of State Hillary Clinton, the cable also inquired about Economy Minister Elena Salgado's influence. The Embassy described her as "serious, hardworking, solvent and ambitious."

The Embassy had been providing Washington analysts weekly reports about the Spanish economy and assessments as to why Spain insisted on participating in G20 Summits, something that Clinton described as "very telling."

"The government has put optimistic spins on the economy since the slowdown"

In mid-2008, the Embassy was already trying to get a grip on Zapatero's economic policies, which were being questioned by skeptical diplomats. The prime minister had just announced his 21 short-, mid- and long-term proposals to stimulate growth. "Zapatero's statements have given many the impression that he is either intentionally downplaying the problem or does not understand its severity. This speech appears to have been an attempt to show that he understood the severity of the situation and was taking action," wrote then-Ambassador Eduardo Aguirre on June 25, 2008. The lengthy cable also said that the prime minister refrained from using the word "crisis."

"Because of a perception that Zapatero has downplayed the severity of the economic situation, initial public reaction was skeptical," the ambassador summarized. "The next year or two could be unpleasant for the government, as well as for Spaniards."

On July 17, 2008, then-Economy Minister Pedro Solbes told the ambassador and his staff "that Spain was facing a 'perfect storm' of adverse economic circumstances."

"He said that in the medium- to long-term it was 'easy' to do what Spain needs to do (he did not specify what), but that in the short-term, things were difficult," Aguirre wrote, adding that the minister appeared "surprisingly relaxed for somebody in the eye of the Spanish economic storm."

"He was also somewhat philosophical and mentioned with the Ambassador that at 66 'he was getting on in years and was a bit tired'." Solbes remained in government until April 2009.

Months later, with Salgado already in charge of the Spanish economy, the Embassy provided Washington with a report on the growing rate of unemployment. "Since the slowdown began, Zapatero and his ministers (with the occasional exception of the now-departed Pedro Solbes) have consistently put optimistic spins on macroeconomic prospects," wrote Charg¨¦ d'Affaires Arnold Chac¨®n.

"For almost two years now, every [government] economic growth prediction has proven overly optimistic and has soon been followed by less upbeat predictions from outside analysts.

"Clearly Zapatero realizes the political danger he is in. Every job lost is another small nail in his coffin," Chac¨®n continued. The US government wasn't just concerned about the Spanish crisis. Numerous cables show that similar inquires were also made to Embassies to other nations. In Spain's case, however, Washington was curious to know if the political forces in Spain believed Zapatero.

In a meeting with Aguirre on February 6, 2006, UGT union leader C¨¢ndido M¨¦ndez told the US diplomat that the three priorities he had to tackle were "the prevalence of temporary employment contracts as opposed to permanent positions, high unemployment among youth, and a high unemployment rate among women."