En EspañolEconomist tries realism as Zapatero refuses to cure Spanish economy
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If you were a doctor, what medication would you prescribe for the Spanish economy? Zapatero has a springlike dream but almost everyone else in Spain faces a menacing reality. The Economist offers a harsh diagnosis.
Zapatero – who some online have now taken to calling ‘ZParo’ – ‘ZUnemployment‘ – is “averse to pessimism” asserts the newspaper and it’s easy to see how they might have reached that conclusion after the last two surreal years in Spain. Crucially:
Bold labour-market reforms to make it easier to fire workers will not be [on the list], to avoid upsetting Mr Zapatero’s trade-union friends. He prefers to rely on talks between the “social partners” that are unlikely to produce big change.
Spain’s two-tier labour system is inefficient as well as unfair. Half the workers are on permanent contracts that make them extremely hard (and costly) to fire. Most of the rest scrape by in a netherworld of short-term contracts, bouts of unemployment and the black market.
[From Spain's economic troubles: Unsustainable | The Economist]
The article lists a host of other serious symptoms which are complicating both the diagnosis and the treatment: shocking public finances, tax rises taking away purchasing power from Spanish consumers and the possibility of more mortgage defaults when unemployment rises even further.
Zapatero’s brand of cheerful, whimsical romanticism is important to take note of because, as economist Edward Hugh said last month, the Spanish economy is not just Europe’s new sicko but is already moribund: “basically the Spanish economy is dying slowly, a day at a time, at the moment.“
I agree with the Economist’s assessment that ZP’s new Sustainable Economy Bill will be about as effective as giving an aspirin to an intensive care patient. Cough medicine is not enough to stop Spain from slipping into an economic coma for the next decade or two.
Spain’s current senior consultant is refusing to recognise the symptoms, correctly diagnose his patient or even try to prescribe the right medication.
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I enjoyed the podcast interview with Edward Hugh and I found the content very relevant to life in Spain in the new decade of 2010 and beyond.
I run a small estate agency in the Valencia region (since 2003) but have scaled down and made all my staff redundant (it costs a fortune to fire Spanish workers) and closed my office and now work from home.
My belief is that this government run by the unimpressive Mr Bean is focusing only on the self preservation of their own jobs i.e re-election.
The medium and long term future of Spain is not even on their radar.
Hard policy ideas that could help the country (but not please the socialists) do not even get on to the list, nevermind have achance of being adopted.
I really fear for the short term future of Spain.
Phil Padgett, Valencia
Hi Phil,
An interesting view. A terrible shame you’ve had to let all your employees go. What do you think Zapatero should be doing to help small businesses grow for the next decade or so?