Obama praises Rajoy but warns that jobs remain biggest challenge

If Mariano Rajoy's visit to the White House on Monday was a test, then his final grade could have been "Making Good Progress."

US President Barack Obama had words of praise for the Spanish prime minister, who, he said, had come to power "at a very difficult time." Obama also told Rajoy that "thanks to your great leadership," Spain has made significant advances in economic stability, deficit reduction and the country’s performance in financial markets.

Still, the US leader noted that "great challenges remain" with regard to economic growth and job creation, which he described as the two most pressing issues right now.

Obama applauded the reforms introduced by the Spanish government, which were "not the most popular, but necessary." He also noted that other European countries with a fiscal surplus — a reference to Germany — "could do more to stimulate demand."

In a brief joint appearance after the meeting between the two leaders in the Oval Office, Rajoy, of the center-right Popular Party (PP), assured his audience that the Spanish economy is on the path of recovery, and stressed that his goal was always to create jobs but before that, fiscal consolidation had to be achieved.

Sources say that the previous US ambassador, Alan Solomont, actively delayed the meeting with Obama

After 11 months of recession, the Spanish leader said, the economy grew in the last two quarters of 2013 and will do so again this year, bringing increased job creation.

"Unemployment continues to be a great problem, but the figures are very promising and we face the future with great optimism," Rajoy said on his first official appearance at the White House.

Asked whether the Catalan sovereignty drive could put economic recovery at risk, Rajoy replied that "political instability, uncertainty, not knowing where someone is going [a reference to Catalan leader Artur Mas] certainly does not help."

The worst-case scenario, he added, would be for the independence project to become a reality, but "that is not going to happen" and the problem will be overcome "with common sense." Rajoy said that in the event of independence, "the smaller party" would suffer the most, meaning Catalonia. Obama watched him intently throughout this explanation, but added nothing.

As expected, the work meeting at the White House lasted an hour, during which time the US president was flanked by some of his closest aides, such as Treasury Secretary Jack Lew; National Security Secretary Susan Rice and the number-two man at the State Department, William Burns, besides the US ambassador to Madrid, James Costos.

The Spanish delegation was made up of Cabinet Chief Jorge Moragas; State Secretary for Foreign Affairs Gonzalo de Benito; the head of the Prime Minister's Economic Affairs Office Álvaro Nadal, and the chief of the National Security department Alfonso Senillosa, besides the Spanish ambassador to Washington, Ramón Gil-Casares.

Rajoy came out of the meeting looking visibly satisfied. It had taken two years' worth of work to make it happen — diplomatic sources say that the previous US ambassador, Alan Solomont, actively delayed the meeting with Obama, apparently convinced that Rajoy would not survive the economic crisis and his party’s corruption scandals. Clearly, he was wrong.