Interview with Edward Hugh – Spain, Zapatero, Europe, exports, immigration and internal devaluation

| 24-01-2010 | Interviews | Written by Matthew Bennett | 3 comments

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In English · 35 min · Download mp3

Welcome to the second podcast interview with Edward Hugh about the Spanish economy. Edward is an independent economist based in Barcelona. He is also a prolific blogger and is frequently quoted in the English-speaking financial press as a reliable source on what’s going on in Spain as the recession continues to unfold.

During the podcast we cover four broad areas: demograhpics and the need for exports to take over from internal demand, internal devaluation and how it will affect Spain, Zapatero and ‘solidarity‘ and the need for a structured immigration plan in Spain.

1. From the FT: “Meanwhile, the eurozone as a whole, having lost its erstwhile internal demand engines, must now hope for faster growth of net exports. So do countries hit by the financial shock, such as the UK and US. So, too, does recession-hit Japan. So, not least, does China. Either the rest of the world has a spending binge, or these countries – which make up 70 per cent of the world economy – are going to be disappointed.” If everyone is trying to sell more and no-one wants to buy more, what happens next?
2. How the eurozone needs an export surplus to replace weakening internal demand;
3. Where the eurozone countries should try and export goods to;
4. How and why eurozone countries should help countries like Brazil and India finance their imports (from eurozone countries);
5. People are not working towards change already because they are waiting for internal demand to recover;
6. How Spain, Portugal and Greece might fit into the export driven eurozone plan;
7. How devaluation is supposed to help countries out of this type of problem and why it isn’t an option for eurozone countries;
8. How Spain’s competitiveness has deteriorated – tourism is as important as exports;
9. How ‘internal devaluation’ is not a well-enough defined concept to be of use right now;
10. What is ‘internal devaluation‘?
11. Public spending cuts, public sector wage cuts, public sector job cuts, private sector wage cuts;
12. The (im)possibility of reducing public deficits which are currently above 10% to below 3% by 2013;
13. Public sector wage cuts and job losses are going to have to happen in Spain;
14. The Spanish government needs to come to an agreement with the private sector and the trade unions on wage deflation;
15. Pension reform is going to be a big debate;
16. Deficit reduction by 2013 isn’t possible unless growth returns to the economy;
17. Why is Zapatero talking about ‘solidarity‘ so much in Europe?
18. Trichet’s idea of economic help is not the same as Zapatero’s idea of economic solidarity;
19. Spain’s economy is contracting inwards on itself;
20. Unless Spain listens to the ECB and starts to reorganise its economy, it will have big problems from the second half of 2010 onwards;
21. The problems surrounding immigrant registration in Vic in Catalonia;
22. The need for Spain to accept immigrants to safeguard the future of its economy;
23. There must be jobs for immigrants for immigration to be effective;
24. Immigration in Spain must be much more structured;
25. The total number of immigrants in Spain will start to decline in a few months if current trends continue;
26. How would a smaller workforce pay for pensions and ’solidarity’ after internal devaluation?