WHAT IS NEEDED TO DOUSE THE FLAMES ENVELOPING THE SPANISH ECONOMY?
Unemployment in Spain is now close to the five million mark, according to the Institute for National Statistics in Spain – with some 21.5% of the Spanish population out of work! This is terrible news and must come as the final death knell for the ruling socialist party in Spain (PSOE) who shortly face the electorate at the Spanish General Election due on the 20th November.
Certainly, it is hard to think that Spanish voters will not severely punish the socialists for their appalling mismanagement of the Spanish economy over the past seven years, with the state of the Spanish economy and horrendous unemployment in Spain the keys issues of the election.
Further disturbing news released recently showed that commercial property sales in Spain were 52% less than last year, house sales 38% less and housing building starts had fallen 24% compared with 2010 – itself considered a disastrous year.
The stats are not all bad with tourism up considerably this year compared to last, as holidaymakers have avoided troubled Greece and North Africa and have come to Spain instead. Meanwhile, more foreigners have been buying Spanish property than in the previous years of the downturn, taking advantage of the much reduced prices for property in Spain.
Of course, the good news is fairly marginal, in truth.
Whilst increased tourism in Spain is to be welcomed it is seasonal and therefore has little real impact on long term employment and will not greatly reduce overall unemployment in Spain. That is reliant upon ‘normal’ industry with the construction industry in Spain, in the past, a massive employer. However, the construction industry in Spain is unlikely to revive for, perhaps, a generation. Increased property sales to foreigners is helpful, undoubtedly – but, equally, very marginal in terms of overall impact.
The Spanish economy – how bankrupt is Spain
The cost living in Spain the lethal difference between 1981 – 2011
In this regard, I think I should quote a small section from the Spanish newspaper El Pais, which seems to ring with truth:
Pedro Pérez, the head of G-14, Spain’s real estate lobby, pulls no punches, saying that the (property/construction) sector is “going through one recession after another,” and that worse may yet be to come. “We thought that we had hit bottom, but we will be ending this year with just 80,000 housing starts and 250,000 more jobless in the construction industry alone,” he says.’
I have to say that Pedro’s comments run along with what I have heard from the Spanish time again over the past four years – a genuine surprise that things are so bad and yet still they seem to get worse. The Spanish have certainly shown a remarkable optimism over the past few years that all would be well quickly and that the Spanish economy would recover its strength.
Actually, I think Spanish optimism has probably had more to do with straight denial as to the seriousness of the problems facing Spain and its ruined economy than anything else. Either that or most Spaniards have simply been unable to grasp the fundamental flaws inherent in Spain. These range from some extremely poor business practice, endemic corruption, innumerate and, at best, naive government (whether local, regional or state) and the allowing of an (obviously!) unsustainable industry (construction) to become one of the mainstays of the Spanish economy.
The Spanish economy – Are the Autonomous Regions of Spain Bankrupt?
Needless to say, the forthcoming Spanish General Election is already producing a small surge of optimism. Several times I have heard Spanish friends tell me that ‘things’ will be better after the general election in Spain and that all Spain needs is more ‘confidence’ – sentiment, evidently, being understood as the only thing that stands between Spain now and a glorious revival of its recent lunatic boom.
Of course, this is naivity of the worst kind and is probably common only to people who have managed to survive comfortably on the beach – with their heads firmly stuck several feet under the sand.
Nick Snelling – Culture Spain
The Spanish economy – how bankrupt is Spain
The Spanish economy – Are the Autonomous Regions of Spain Bankrupt?
The cost living in Spain the lethal difference between 1981 – 2011
Succinct, informative and spot on Nick – translate it into Spanish and send it to a few newspapers and other Spanish media – would be interesting to see their response. Some, like Expansion, have been singing from the same hymn sheet for a while but one thing Spaniards hate is criticism and the minute anyone tells them what is wrong with their country they in ranks into denial or downright verbal aggression – but them making noise, having an opinion about anything and everything and never being wrong are some of their more endearing traits
Robert – thank you. That is well said and for any readers from someone who is partly Spanish. So, all the more meaningful!
I couldn’t agree more with you, Nick. It’s great to read/hear such a clear description of the situation in Spain, specially when we – Spanish people – lack of ‘descriptive’ self-criticism. Unfortunately, I’m not very optimistic about the near future… even after N-20… When you say “naive government (local, regional, or state)’ sounds a bit too flattering.to me.. I’d dare to call them ‘corrupted’ – as so many of them have proved, regardless of the political party they represent. We’ll see what happens in Spain and Europe in the next few months… the outlook is thrilling… like in a film or a tv serial.
Cheers,
Sonia
Sonia – thank you for your kind comments which are very much appreciated. I only wish that I could be more optimistic. However, I fear that would be neither fair nor realistic and I agree wholly with you about the corruption! It is all rather like watching a film – but a horror move rather than a thriller…
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