It gives me great pleasure to start this “Readers’ Corner” section off with a comment from Tim Drummond, an American who has lived in the coastal town of Torrevieja for the last 8 years and has a lot of business and investing experience to bring to the debates about the Spanish economy and its problems.
I love Spain. I live in Spain by choice. I’m retired and there are many countries I could choose but I choose here.
However, I am worried about Spain. I am worried because of the financial problems caused by the banks over-leveraging while not marking assets to market. I am worried by the austerity programs that I know Rajoy has to implement. I am worried by the bond prices and their spreads. I am worried about the strikes that are being threatened as weapons against change.
I worry about all the people paying on mortgages that exceed the worth of the house without any chance of genuine debt relief—only an accumulation of debt for the future.
But what worries me most is that Spain has two major problems. The current fiscal situation and the future with its aging population. The government cannot myopically focus on just the current fiscal problem but must work on the first with an eye to the second or we are unlikely to ever leave this painful cycle.
The current fiscal problem will be corrected by a disciplined government that needs to extend all the way down to the municipal level. But the future needs stimulus and creativity and requires a different set of solutions.
I would like the government to look at the things that Spain does best and exploit them to their fullest and not try to be all things to everyone.
Potential areas where Spain has shown abilities such as: medical tourism, retirement villages, agriculture including hydroponics and renewable energy come to mind.
If the government and industry would choose specific fields and create decent research and development budgets without a bureaucratic nightmare and incorporating fresh eyes could go a long way into the future. So that we have a future path shining in our eyes as we exit the current mess.
Only a crazy person repeats the same process over and over expecting different results. It is time for change.