Alex Iszatt (Reporter)
THE recession may have hit hard and long, but it looks like Spain may finally emerge from the downturn this year.
According to the National Institute of Statistics (INE), Gross Domestic Product in Europe could be flat or grow by up to 0.2 per cent in the third and fourth quarters.
If this prediction is correct then Spain will be out of recession this year, reaching the end-of-year target of a 1.3 per cent.
Spain’s Economy Secretary, Fernando Jiménez Latorre, comments: “We believe there’s been an important turnaround in the economic cycle and that the bases are there to continue this new trend and this will show growth, finally ending the long and deep recession.”
Spain’s debt is now almost 100% of its GDP, the worst lvel of debt in Spain for a 100 years. Don’t ask me how coming out of recession and getting rid of that debt can be squared. What turnaround are these people talking about? With such a mammoth debt mountain, cuts and austerity must surely be here to stay for the long-term?
Yeah, a record of people with no job + less money coming in + more money going out = end of recession…makes sence doesn”t it ?
an Mickey Mousse is real and alive in U.S.A.
The Olive Press has every right to be positive and spread good news. Does it not though have an obligation to be accurate. This article is a reflection of a similar, but accurate, report in The Guardian 29/08. It was not the INE speculating future GDP but the Spanish Economy Secretary. The article failed, in my humble opinion, to reflect other authoritative speculation that GDP may not indeed improve but could get worse. Rueters speculate Spain’s Debt is set to increase over the next three years. Will this short term positivity result in deeper despondency when not realised!
Oh please, let’s get real… Some people, mainly European westerners, English, Americans are still biased in everything related to Spain due to their xenophobic, racist and supremacist cultures, and historical biased views. While smaller than the biggest ones, the Spanish economy is a big and developed economy; and Spain is not the only country with a big, or growing debt. Obviously the former comments are biased. There are many countries with similar or bigger debt than Spain, and they are doing well. So anyone tell me, why would not be the same for Spain, precisely now that they are exporting more than ever. The current situation in Spain is not the best one, and the recession has hit hard; but Spain is already showing some growing indicators. The process will be longer and more painful, at the end, than in other western economies; but they are getting out of the Crisis too…
Fred is wrong, “Spain’s debt is NOT now almost 100% of its GDP”: Spain’s debt is now “more” than 100% of its GDP; as it is the case with many other countries like France 182% of its GDP, Germany 142% of its GDP, Sweden 187% of its GDP etc. And the horrible state of English/United Kingdom economy is shown very clearly in some indicators that are far worse in many figures than the Spanish ones. The external debt of the United Kingdom in much bigger in all orders: 390% of its GDP… Other indicators show similar bad figures for the United Kingdom and other countries that may be more worrying than the Spanish current crisis. There is some “more or less updated” info, even at Wikipedia ( “https://en.wikipedia.org/wiki/List_of_countries_by_external_debt” ). There are, sure, many other sources more updated, but to my knowledge the figures are similar too.
We all want good economic news, of course, but the truth of the situation is more important. Such massive debt on this scale is almost unprecedented, and it has to be repaid. That means cuts to salaries, health service, pensions, infrastructure and just about everything else – which is what is happening now of course.
And where are all the new jobs coming from? Spain has no answers on these points and to say that we are coming “out of recession” is totally meaningless in this context. Prosperity? For whom?
Presumably “little” awards from the UK such the 4.8 Pound contract awarded a Spanish shipbuilder & the continuing employment of Spaniards in Gibraltar all help not to speak of all the regular supplies that are sent over the boarder into Gib. Just a pity some little men in Madrid don’t like to bear that in mind when ordering ridiculous border controls. In my mind it just makes them look silly & vindictive.
Fred says. ‘Such massive debt on this scale is almost unprecedented, and it has to be repaid’. Who are these people who are being repaid? Can we punch ’em inna nose or something?
Get down the bank and bop em Lenox.
@William, thanks for clarifying that Spain’s predicament is actually worse than I said. And people call me negative lol. Yes, other countries like Germany have greater GDP debt, but they are not Spain lol.
As Fred says “And where are all the new jobs coming from? Spain has no answers on these points”… Well, the high unemployment in Spain is a big problem, but it is a structural problem of the Spanish economy that has lasted for many decades. In the early 90’s the rate of unemployment was similar (24%), and later they got it reduced to acceptable levels. One point that has to be considered here is the “Black Market” and “Black economy”. It is unbelievable and impossible that a modern western society carry on with 27% of unemployment, and more than 50% of unemployment for the young people under 25. The fact is that these figures are not exactly accurate, since they do not take into account the “Black economy”, and many people working but not declaring it; and not paying taxes. I believe that the situation is not a personal choice for most of them (it is for some), since they take what there is, in order to get a salary or some money. Even if is not declared, and many people have not much choice but to work in the hidden economy, it still counts to make the society and the economy to keep on going. Many of the people making a living in the black economy just survive; while others make good money out of it. The Black or hidden economy is a considerable chunk of the Spanish economy. Obviously the ideal situation for all (for them and for the Administration) would be to have most of it declared, and paying taxes. That will lead to a better off situation for all: more money for the public services, and also for the society and enterprises; and better work conditions. But for now that is the way it is… Since the exports are increasing in Spain, it will lead to more money to be injected in the economic cycle, and to create new jobs in the coming years.
What’s the black economy like in Germany I wonder? Why has it not grown in the same way as Spain, for example?
Fred:
Globalization requires close coexistence of peoples with
different worldviews.
In Latin countries the moral foundations is Catholic: The cheaters can go to heaven if, before I die, repent of their sins.
In Protestant countries, the moral foundations is Lutheran or Calvinist, cheaters are not predestined to salvation and friends or relatives of the cheaters???
Luc:
I agree with you, I hate the way chosen by Germany to end the crisis in Spain, which is to reduce wages to make our products more competitive and increase exports. Was accepted
that the domestic market will shrink because the Spanish were going to have less and less money.
The aim is to attempt debt repayment.
Do you think they could do things differently?
Lennox:
In Spain it is doing everything humanly possible to pay the debt.
If necessary will be assigned rights to use natural resources, whatever.
Spencer:
It was decided that Spain out of the crisis through exports. Then it is necessary that the German economy grow.
“Globalization requires close coexistence of peoples with different worldviews.”
It does, but alas that leads to a lot of bad feelings when each country performs differently and one country becomes the powerhouse and the others underperform.
The EU project has shown that countries cannot align themselves financially, despite all coexisting under the EU umbrella. Fact is, countries can never align themselves financially because every country has different cultural values, skillsets and work ethics – because every country has a different history.
The EU has already admitted that the auterity project has basically failed. Unfortunately our world only understands success in monetary terms. Perhaps that is the real problem?
Fred,
your last post was spot on. The Germans and Dutch, two peoples I know pretty well, having lived and worked in both countries are brought up from birth to save and invest and treat debt with extreme caution (Weimar Republic).
The old Spanish also were very frugal and indeed many younger Spanish have relied on their grandparents for bail-outs but now this source of funds has dried up. The younger Spanish, at least 99% of them have a totally different mentality and now they are paying the price.
They were living on credit – tomorrow never comes – wrong, tomorrow has arrived.
The Germans have always invested in infrastructure and development, The Spanish spent their huge handouts from northern Europe on ego trips.
When I tried to warn my neighbours in Guadix that hard times were coming they laughed – they are not laughing now and like the Greeks they blame the Germans for all their self induced problems.
The French saw what was coming and stopped spending – thousands of bars and restaurants closed down from 2009, same goes for the Dutch.
Spain cannot improve until they accept that the old way of doing things has to be jettisoned – but don’t hold your breathe, it won’t happen any time soon.
Well stop the press, I actually agree with Fred’s last comment regarding globalization and the EU project. :)
Fred,
According “Mass Psychology” (Le Bon), the masses learn from experience but very slowly.
I agree with you that Spanish young people has grown up in a world of opulence, which is not coming back.
But the output is chosen based on exporting goods to Central Europe, and that requires that Germany grows. Which is not happening.
David,
Rajoy did not throw concrete blocks in the sea. Was Picardo.
Anselmo,
you Spanish have been throwing concrete blocks in the sea all over the place – denial syndrome or what – grow up and take a good look at yourselves.