Prime Minister Jose Luis Rodriguez Zapatero says he disagrees with those who think a socialist state and a competitive economy are incompatible, The New York Times reported Friday.
"My ambition is to make this an innovative, creative, entrepreneurial country while upholding the social welfare state," Zapatero said during an interview with The Times at the Moncloa Palace.
"It's a question of making companies more competitive and more innovative," Zapatero, 48, said.
Spain's unemployment rate of 18 percent is the highest in the euro zone, largely because of the collapse of a 10-year building boom.
His opponents say Zapatero is long on vision for the future but lacks a plan for creating jobs or financing his generous social policies, the Times says.