King Juan Carlos said Tuesday that Spain is going through the worse moment of its economic crisis but insisted government measures are working and the country is starting to recover.
He spoke during a stop in Chile as head of a trade delegation to South America. It is his first major trip since he fell and broke a hip in April during an elephant-hunting trip in Botswana that angered Spaniards bearing the brunt of a deep economic crisis and crushing unemployment.
"We're likely facing the toughest moment of the crisis and undergoing the most painful treatment so far," he said at a news conference at Chile's presidential palace.
But The 74-year-old monarch said belt-tightening measures have worked and "things are beginning to improve, public accounts are in much better shape than a year ago, the trade balance is healthier and we're starting to recover lost competitively."
Spain has seen its borrowing costs surge in recent weeks as investors worry the government's public finances might be overwhelmed by the cost of rescuing banks holding huge amounts of soured property investments. Spain is struggling with an unemployment rate of more than 24 percent, with more than 50 percent of people under age 25 out of work.
The country has become the focus of Europe's debt crisis because funding the country, the euro zone's No. 4 economy, would stretch the region's finances to breaking point.
During the news conference, Chilean President Sebastian Pinera reassured Spanish investors that deals will be respected in his country. Argentina's government expropriated YPF, Argentina's largest energy company, from Spain's Repsol this year. Bolivia nationalized a Spanish-held company that owned most of the Bolivian electricity grid.
Associated Press writer Luis Andres Henao in Santiago, Chile, contributed to this report.