Spanish economy 2011, unemployment up again.

Apr 302011

THE STATE OF THE SPANISH ECONOMY 2011 - RUNAWAY PROBLEMS?

The Spanish economy in 2011 is still reeling, as shown by the latest Spanish unemployment figures. These show that unemployment in Spain now stands at a horrifying 21.3% – meaning that some 4.91 million people are out of work in Spain.

It seems inevitable that the feared 5 million mark for people out of work in Spain will be reached soon, despite the Spanish government’s state of denial and claims that the recession is over.

Of course, the figures for unemployment in Spain are not reliable. Far more people are out of work than are shown by the official figures. Like so many other countries, people ‘out of work’ but on retraining courses (however temporary and worthless) are not taken into account within the figures. If they were then the 5 million mark for Spanish unemployment would have been exceeded long ago.

That said, Spain has a significant ‘black’ economy and some balancing of the unemployment figures would be required to take into account those who are working (on the ‘black’) but claiming to be unemployed. Needless to say, any calculation would be impossible to compute.

However, few would claim that the Spanish economy in 2011 is not in deep trouble with any meaningful recovery a long way off. This must be troubling the governing PSOE (Socialist) party, who may face a ferocious backlash during the forthcoming local elections in Spain scheduled for the 22^nd May.

Certainly, for anyone living in Spain, the hardship caused by the current problems are obvious on a daily basis. Most towns and villages are notable for closed bars and shops and the profusion of Se Vende (For Sale) and Se Alquiler (For Rent) signs hanging on both business premises and private homes. If you then take a short drive out of town then you will inevitably pass partially finished developments or areas of land cleared and ready for massive developments – that will now never take place.

On a personal basis (and therefore of only anecdotal value), hardly a week goes by when I do not meet someone in their 20s to 30s who is not preparing to leave Spain to search for work in Northern Europe or the US. Indeed, my wife, who specialises in teaching business English and ‘grooming’ people for European job interviews, is overwhelmed with work.

A Spanish friend of mine who is in his mid-thirties and taught by my wife provides a picture of the misery that the present crisis is causing. He is a fully qualified engineer heading for the UK shortly in a quest for work, having found only leaflet dropping as a job here. One of his brothers is also out of work and the other (a computer) techie. is working behind a bar having picked up some work over Easter. The brothers are surviving, my friend says, only through the beneficence of their father.

During the Easter weekend, my Spanish friend was with his parents walking down the magnificent Paseo (pedestrian walkway) of my local and beloved town of Gandia in Valencia Province. He says, whilst walking, they met many friends – particularly of his parents. All were bemoaning the fact that their ‘children’ were leaving Spain in a desperate search for work.

In my experience there is always a disconnect between government figures, a government’s assertions and the truth. Never is this more so the case than when unemployment figures are involved and the state of the economy is being proclaimed. So, like most people here, I treat any claims that ‘all is well/soon to be well’ by the Spanish government with the greatest scepticism

The truth is that the Spanish economy in 2011 is badly damaged and limping along. I would liken it to a three legged stool with the ‘legs’ being being tourism, construction and agriculture. The construction leg has collapsed altogether – with agriculture damaged and fighting under-investment over the past few years and ferocious competition from the Third World. The tourism leg remains okay and, although damaged by the world wide recession, will stay solid, helped by the the political disturbances in North Africa.

However, if the Spanish economy in 2011 was a three legged stool it would not be one that you would sit on. In fact, the stool would be lying on its side on the floor awaiting serious repair.

The problem is that the repair work for this particular economic stool (pun only half intended) will take a long time, given the colossal debt remaining from the lunatic property based boom. There also remains the imponderable problem of exactly what can be created to provide the income, employment and industrial base of the lost construction industry?

I have no idea – and I have yet to read or hear from anyone with a satisfactory answer…

Of course, for you as a holiday maker in Spain or someone intending to retire to Spain the economic problems of Spain can remain a somewhat abstract concept. Unfortunately, nothing could be further from the truth for many Spaniards – with young people facing a blank future regardless of their qualifications. Indeed, their only immediate hope lies in finding work abroad, just as a previous generation was forced to do during the Franco years.

So, in answer to the question of how is the Spanish economy in 2011 – the only answer is that it is deeply troubled and will be for a long time to come.

Nick Snelling - Culture Spain