Saturday November 28th 2009

Spain's economic troubles: Unsustainable! The government may still be too optimistic over the country’s prospects. From The Economist print edition

28 de noviembre de 2009 01:12

Spain's economic troubles

Unsustainable

Nov 26th 2009 | MADRIDFrom The Economist print edition

The government may still be too optimistic over the country’s prospects

AP Zapatero, eternal optimist

SPAIN is the new sick man of Europe. That was how some commentators greeted the news that, although most other European Union countries climbed out of recession in the third quarter, Spain’s economy shrank, for the sixth quarter in a row. Yet a 0.3% drop in GDP was barely as big as Britain’s. And Spain has suffered a smaller one-year fall than the EU average, with Germany, Italy and Britain all doing worse.

In none of these countries, however, has the pain of recession bitten so deep. Spain’s 19% unemployment rate is second only to Latvia’s in the EU. It reflects a structural hangover in a country that got drunk on bricks and mortar before its property bubble burst in 2007. Because of this, Spain entered recession in an already weakened state. As others recover slowly but predictably, Spain will need more time and extra care. Even optimists expect real recovery to come only in 2011.

Spain’s Socialist prime minister, José Luis Rodríguez Zapatero, admits now that the housing boom, which peaked in his first term, was a bad thing. Some 900,000 of the new unemployed are largely unskilled construction workers, whose jobs may have gone for ever. Yet he is averse to pessimism. Recovery has started, he insisted at a round-table organised by The Economist on November 23rd. He also claimed that Spain’s potential growth remained above the euro-area average.

Mr Zapatero’s credibility was dented when he refused to admit the scale of Spain’s problems as it fell into recession. Even so, he believes he can steer the country back to growth. This week his government planned to unveil a “sustainable economy” law, the main part of a strategy that looks forward to 2020. But the law will be long on good intentions and short on tough measures. Renewable energy, modest liberalisation and more training are likely to be on the list. Bold labour-market reforms to make it easier to fire workers will not be, 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. Workers on short-term contracts were the first to lose their jobs when recession hit. As Elena Salgado, the finance minister, claims, this gives the system a certain flexibility. But it is bad for productivity. Inefficient workers on permanent contracts are protected. There is no incentive to train the young and the temporary.

A further rise in unemployment may come from smaller companies squeezed between tough labour laws and a credit drought. Given protection for permanent employees and limited wage flexibility, many small and medium-sized enterprises risk bankruptcy. And unemployment is itself a cause of future woes. It costs the state money in lost tax revenues and extra benefit payments. It triggers mortgage defaults and depresses consumer spending.

Ms Salgado is putting the brakes on fiscal expansion next year through tax rises and a slowdown in public spending—though infrastructure, including what will soon be Europe’s most extensive high-speed rail network, will continue to receive money. The state rail company, Renfe, has already snatched half the Madrid-to-Barcelona traffic. Indeed, with its efficient, green technology, Renfe is a symbol of the new sustainable economy that Mr Zapatero wants to create. Yet this will still be a long-term project, and it may require bigger improvements than any now planned in education, as well as more spending on research and development.

Unfortunately, the shocking deterioration in the public finances, which have swung from a budget surplus in 2007 to a deficit of over 10% of GDP, is forcing retrenchment. Planned rises in taxes on income and sales are leading some economists to lower their forecasts for next year. The rises are taking purchasing power away from consumers, explains Javier Pérez de Azpillaga of Goldman Sachs, who sees a return to modest growth in the fourth quarter followed by dips back into negative figures during a bumpy 2010.

With lower public spending and few radical reforms in prospect, where might new growth come from? A short-term saviour is the rest of the EU, which takes two-thirds of Spanish exports. The economy may ride on the coat-tails of recovery in France and Germany for a while. But Spain must one day do a lot more to put its own house in order.

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Spain's economic troubles

Unsustainable

The government may still be too optimistic over the country’s prospects

See article

Nov 26th 2009 | MADRID

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1-20 of 87generated3157882 wrote: Nov 26th 2009 5:51 GMT

No mention is made of the parlous situation of the Spanish Pension System and Social Security. Following the devaluation of the pound sterling or appreciation of the euro (take your pick) Spaniards enjoy better pensions that those paid in the UK.The impact of this drain in years to come will make a bad situation worse but then it will be the Partido Popular who have to pick up the pieces.

Recommend (13)PermalinkReport abusegenerated3157882 wrote: Nov 26th 2009 5:52 GMT

No mention is made of the parlous situation of the Spanish Pension System and Social Security. Following the devaluation of the pound sterling or appreciation of the euro (take your pick) Spaniards enjoy better pensions that those paid in the UK.The impact of this drain in years to come will make a bad situation worse but then it will be the Partido Popular who have to pick up the pieces.

#

Recommend (5)PermalinkReport abuseEx-Pat wrote: Nov 26th 2009 6:06 GMT

We shouldn't forget "papeles para todos" otherwise know as uncontrolled immigration, the selling of a large part of Spain's gold reserves at $200 per ounce for ready cash because "el oro no es rentable", gold isn't profitable (it is now worth almost $1,200), pardoning the debt of Evo Morales of either €70 million or €70,000 million, I don't remember clearly, allowing the Catalan "Nation" to set up an Embassy in Germany and numerous trips for numerous ministers to South America at a time of crisis and also at a time of the Kidnapping of Spanish citizens by Somalian pirates. No, president Rodríguez Zapatero is not entirely blameless for the state of the economy. As it Great Britain in 1997, the Socialist government inherited a very healthy economy in 2004 with a good surplus.

Recommend (35)PermalinkReport abusePaco_says wrote: Nov 26th 2009 7:33 GMT

From my point of view, this article remarks an unquestionable truth, that spanish government in general and prime minister in particular are specialists in marketing but not leaders.In these tough times we need a leader to tell our people the truth about what to to do, not matter if this truth is unpleasant.Today, we can compare Spain to a man seriously ill: he needs the right diagnosis from the doctor and the right prescription to recover his health.Unfortunately, we have a doctor that only tell us that we will get better only resting and waiting for tomorrow, supposing that the recovery of other countries will imply our own recovery.In our competitive world, waiting for tomorrow is not enough.

Recommend (18)PermalinkReport abusejesira wrote: Nov 26th 2009 8:20 GMT

Congratulations for The Economist. Spanish-related articles like this tell the truth and nothing but the truth (although perhaps not ALL the truth). Shame that most spaniards don´t want to know it and that truth does not seem to talk in Spanish, after all. Sad.And the worse thing is that nobody is doing anything: no strikes, protests, nothing!. It´s like people are sleeping awake, perhaps hypnotized by Mr Zapatero, futbol and TV "tomate". That´s all that matters, apparently.During past years Spain has taken advantage of Europe´s money to fund the great "brick party", treating intellectuals like shit and forcing forcing them to migrate elsewhere if they wanted to get some respect. Last year, Zapatero dismissed anyone suggesting a Spanish crisis suggesting that such thought was "antipatriota", and look where we are now. He keeps lying and smiling, but nobody seems to care about his lies. Obviously the crisis is not only his fault, but whole nation´s, but now it looks like he is treating (us) spaniards as idiots. And very probably he´s right.And now he starts thinking about I+D (Research & Development) in Spain, as a recipe for the future sustainable economy. "I+D in Spain"????? What a joke. Whith whom? Unemployed bricklayers an south-american/ african immigrants? I don´t think so...Anyway, no worries, this weekend we got "Madrid vs Barsa"...

OEEEEEEOOOEEEOOOEEEOOOEEEE...!!!!

Recommend (68)PermalinkReport abuseJ. Abal wrote: Nov 26th 2009 9:41 GMT

The mediocracy is smelt in every spanish corner. Spain's President is mediocre and he surrounds himself with more mediocre than him in order to support his meaningless plans. Although Spaniards have what they deserve. They voted for him in the two last elections and will do it again in the following ones. The government is the mirror of the society he governs.It's probably that if any reform of Beckham's law that was made stopped Spanish League, many Spaniards protest that. Football is the only major preocupation in this country. And at this area, all the Parties reach an agreement but not at Education, Energy, Economy...

Recommend (23)PermalinkReport abuseDavid Madrid wrote: Nov 26th 2009 9:59 GMT

With respect, I think The Economist´s article pulls it´s punches somewhat. Probably because of the largess shown during last week´s Madrid conference attended by ZP, but also the vitriolic bile that often accompanies these kinds of articles when they get translated into Spanish and make it on to the blogosphere.

ZP is the top of the tree but the Spanish craziness for building goes way way deeper.

Most depressing for me recently was the politicians in charge of Madrid (Partido Popular and the only real opposition to ZP) announcing at the beginning of November a long-term plan "La prolongación de la Castellana" (Chamartin) dozens of new office towers and 17,000 new houses, stations etc.. El Mundo, when announcing this, went on to "justify" the plan by saying that Paris and London had similar type overspill areas. It´s delutional at best, but in the Madrid that exists as of November 2009 just plain dumb!

When will Spain change course? My guess is not before the ECB switches off the liquidity tap. We have some more to run on this story and Spain will surely ovetake Dubai, the Baltics etc... etc.. Busted by idiot politicans.

Recommend (13)PermalinkReport abuseAlexLib wrote: Nov 26th 2009 10:05 GMT

Interesting article. The first thing I would do to get out of spanish recession is change our schedule of work. Any country that works from 10 am till 1.30 pm and after from 5 to 8 pm and has between 4 hours of long nap "la siesta" can´t grow up. Is impossible!!!In the other hand wich are the incentives for anyone to finish high school if it´s easyer to go to work to Zara or Corte Ingles instead of going 5 or 6 longs years to university to have a salary of only 2000 euros.I don´t think the african or latinoamerican inmigrations are bad inmigrations at all, they are doing what the spanish didn´t want to do all these 30 years of democracy, we shouldn´t come now and say that they are taking our jobs because it isn´t truth, We didn´t want those jobs, they were empty and

we needed cheap labor manpower for what we refused to do. At this time we should be enough prepared to be competing with doctors, engineers,dentists, etc etc from other countries, but we have not enough doctors, engineers or dentists for example because our youth is not interest at all to study such a long careers.So lets be honest and stop blame the african or southamerican coming ,they do what we didnt want .And lets sleep less and work more

Recommend (20)PermalinkReport abusegenerated3459118 wrote: Nov 26th 2009 10:47 GMT

Frankly I don't see anyone capable of handling the current situation, with the PP certainly more incompetent and just caught in its own in-fighting.As a friend of mine in Cadiz says, perhaps the only way of solving the unemployment problem is by getting rid of traffic lights- now there's one to ponder over!

Recommend (4)PermalinkReport abusepedrolucia wrote: Nov 26th 2009 11:43 GMT

The public finances in Spain have to cope with an impressive deficit of between 75,000 - 100,000 millions € in never paid taxes. Our bussiness class are maybe the most thirsty for public aid in Europe, although after the crisis i do not dare to compare with champions of free enterprise (e.g. U.K. tricky behaviour with its banks). The common places like 'siesta' and instructions on 'work more' probably come from people who don't know the country. The Productivity is low but as an average. Depending on the sector it may be high rated.Sustainability for the future spanish economy means an attempt to change the productive model. I would like underline the last words because no other economies in Europe are adressing the problem in the same terms. Change, Model, Productive. Maybe because they are in the hands of conservative governments there are no plans, with Sarkozy exception: a human capitalism.It is true that the means of Spain are slender. But what have we? Armies of right wing economists singing mantras(in english, of course)?

Recommend (16)PermalinkReport abuseAlpin wrote: Nov 27th 2009 12:42 GMT

Spain has very deep problems on several fronts:

1) The prime minister is totally inept and is surrounded by useless ministers. It has done nothing to solve a crisis that refused to accepts until it exploded. He thinks we are going to come out of recesion with the help of a tax increase.

2) The opposition party looks "scared" of doing real opposition.

3) Spain can not support the cost of running 17 local goverments with total unaccountability (e.g. Chaves and Matsa in Andalucia etc. etc.) and lack of control in the finances, high salaries and an extremelly large number of civil servants and all the premises to run these local goverments.

4) Education and Research & Development.Primary and secondary education (after LOGSE) and plainly rubbish, but neither of the big 2 political parties is talking of education reforms.People with scientific/engineering degrees are very well educated, however Spain is loosing large numbers of its scientist to Europe and the US, frustated with poor wages and lack of opportunities.Language education is abismal.

5) Political corruption is rampant.

6) Politician and their cronies are appointed to top jobs, independently of whether they have any suitable knowledge of qualification. These jobs should be advertised and the best candidate appointed to the job.(E.g.: Mª Teresa Costa as director of CNE, Carmen Caffarel was found a job as director of Instituto Cervantes after leaving Spanish Television, Alberto Saíz director of CNI was an agricultural engineer and friend of Bono and the list would go for on for ever).

Recommend (42)PermalinkReport abuseThe Spanish wrote: Nov 27th 2009 3:42 GMT

Indeed, our current situation is becoming dramatic, and has no intention to solve at short term, but worse... Mr. Zapatero is a madman who runs a ship without a rudder, without a captain, and only acts on the momentum of the waves. Here, political corruption is becoming a serious problem and the salaries of ministers are go up without brake, while people lose their jobs, their homes and have nothing to buy food...Nor do we have politicians who are able to fix this... but at least I think that a political change would do well to return the illusion to the country. This seems increasingly a graveyard.I just hope that someone makes something to return sense to this fool, who rules the country like a bar with friends. Everyone wants "free drink", and he pays for everyone... But, not with his money, of course!

Recommend (5)PermalinkReport abuseDSSBCN wrote: Nov 27th 2009 4:48 GMT

MR RODRIGUEZ ZAPATERO IS A SHAME FOR ALL OF US, WE THE SPANISH PEOPLE ARE SUFFERING BECAUSE OF HIS BAD ADMINISTRATION, HOPE IS GOING AWAY ASAP.WE ARE SO SORRY EUROPE!

Recommend (4)PermalinkReport abuserudolf-madrid wrote: Nov 27th 2009 5:13 GMT

you don't know how right you are....

I don't think we have what we deserve as you point, though. Our actual political generation is the result of years and years of uneducated people becoming politicians while the valid people is just too

busy working, paying taxes and filling never-ending, recurring forms.

Current Spanish politicians are either corrupts, twats (you know who im talking about) or people living in a fantasy world. You talk about good intentions, but it's not even that. It's just improvised document templates. If you have the chance of seeing on TV the Senate or the Congress meetings, you will see spectacles that belong to the third world. Shouts, Laughs, alarming corruption issues, contracts "by finger" as we say, uneducated people, .... I'm sure even in Cuba or Venezuela they are more serious.

I've been working in a big multinational IT company for 10 years, then left to found my own little R&D company as a young entrepreneur. Ever since everything has been problems. I can't stop paying taxes everywhere.

And you turn on TV here in Spain and day after day Mr.Zapatero & folks are talking about incentives for young people, empower R&D, as the means to end this crisis but they have their circus set up so not only these subventions or incentives do not exist at all, but the little money you may have gets lost in the process. It's really irritating how they dare to openly LIE.

Meanwhile, the morale of young people is reaching critical minimums.... If you work in a big company, you better not stand out, you better underperform. If you work by yourself, the full weight of the law is waiting for your money.

All the bright engineers I've met during my corporate carreer have eventually flown to the UK, USA, France or any other serious country, even Ireland, where at least, if you want to work, you are allowed to. I am seriously considering relocating my company (and myself) just for the sake of not giving a single cent more to these politicians and this rotten system.

I'm glad a serious paper like The Economist publishes this kind of news. In any Spanish newspaper, as you pointed, only the upcoming football match between Madrid and Barcelona seems to matter.

Excuses for my English.Keep up the good work.

Recommend (44)PermalinkReport abusegenerated1225358 wrote: Nov 27th 2009 7:14 GMT

I enjoy the comments from readers more than the article itself. Gunny: lots of critics, but who's propising solutions?. That's also typical from our country: full of armchair aficionado economists and wanna be comentators, but nobody taking positive action. Sois todos unos listillos.

Recommend (18)PermalinkReport abusesugarfree wrote: Nov 27th 2009 7:42 GMT

In a democracy, countries have the politicians they deserve. For some reason, Spaniards have a problem facing hard choices, and prefer to be lulled into comfort by soothing words. Tough measures are never needed. Somehow, things will get better. Any attempt by a politician to call a spade a spade will be met with such an indignant reaction by public opinion, that they immediately recoil. So they don't dare. The opposition constantly criticizes the government but they shy away of proposing their own tough measures. No one ever won an election by promising blood and tears. I cannot pinpoint

where this inability of Spaniards to face hard realities stems from, or whether it will be there forever, but it is certainly at the heart of the observed timid attitude of politicians. Maybe historians could diagnose this illness, but I doubt there will be a cure any time soon.

Recommend (5)PermalinkReport abusegenerated1106801 wrote: Nov 27th 2009 7:43 GMT

Most of the comments here come from a far-right Spanish Think-Tank called FAES, which is leaded by the former Spanish President José María Aznar. They are paid-comments written by granters and employees, lacking of all impartiality and respect to the other side, completely biased, and usually stupid.

Hold on Spaniards! The time is close in which our big saviour, the great, smart and handsome Mariano Rajoy, will redeem our country, so battered by damned reds, nationalists and gays!!

:)

Recommend (22)PermalinkReport abuseGatoNegro wrote: Nov 27th 2009 7:50 GMT

All the comments here are from Spanish neocon people, all!! It was the neocon policies what lead the world to the worse crisis ever. The Spanish housing boom began as a result of PP laws liberalizating the soil. It must be changed. Perhaps some of us are too optimistic, but we will work for it, and without the neocons help, as everybody can see.

Recommend (26)PermalinkReport abusegenerated3127756 wrote: Nov 27th 2009 7:57 GMT

I am afraid that our real problem it is not easy to be solve. It is true that we have a too optimistic President, and we really need deep changes on the labor market, not only because 19% of unemployment, but also because 20% of the work employers are working for our state 6 levels (Europeean Government, National Government, Regional Government, County Government, Local Government and Public Companies)

But also we need other important structural changes:

1- The banking system is collapsed, but nobody, except Spanish Central Bank (Government and opposition party) want to change the problem. It is important to reminded that half of the system is public (Saving Banks controlled by Regional or Local Government, and have half of the market loans and deposits).

2- The corruption is part of our life. It is very difficult to make business without find any politic asking money. As all parties are corrupted, they are not interested on changes

3- Education System is one of the worst of Europe, and as Teachers and University Managers are

Public Servants and have they work for all live, it is very difficult to ask this people to change

4- Business Structure. We are the country of Pubs, Hotels and Restaurants (45% of the services labor market) and Construction, and this means unskilled labor market, to difficult to move to other skilled sectors. Remember that 14% of our total products exportation came from the agricultural sector

So I am afraid we are on troubles, and next years are going to be very difficult

Recommend (20)PermalinkReport abuseEx-Pat wrote: Nov 27th 2009 8:05 GMT

generated1106801

What you say is not true and you know it!!!

Recommend (8)PermalinkReport abuseBack to top ^^

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Spain's economic troubles

Unsustainable

The government may still be too optimistic over the country’s prospects

See article

Nov 26th 2009 | MADRID

Readers' comments

The Economist welcomes your views. Please stay on topic and be respectful of other readers. Review our comments policy.

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21-40 of 87generated1106801 wrote: Nov 27th 2009 8:15 GMT

Does anyone doubt that Spain will go forward and get everything over? Spaniards are witty, fast-brain people, and they have recovered their traditionally high -maybe too high- self-esteem. Saying that Historians should issue a diagnosic on Spain's alleged fear to face hard challenges is a non-sense, similar or worse things -and equally stupid- can be said about Germany, Uk, France... Has someone ever seen in any country a so fast rise as in Spain in the last twenty years and in so many fields: sports, arts, culture, even science? Some say that its success is related to European funds and I don't question it, but wait and see if the new funded countries (Poland, Hungary, Czech Rep) will do as well Spain did, we all know they will not match Spain's success. The smart people of Europe know that it's better not to look down Spain, and so do I.

Recommend (9)PermalinkReport abuseRalk wrote: Nov 27th 2009 8:22 GMT

It is regrettable, treatment of the journalist on the facts which is here.I agree with the vast majority of the events listed here, but also made very lack an acknowledgment of guilt of the European Central Bank, with its political, nurtured and promoted the housing bubble. When the "cauldron" of the Spanish economy needed cooling, European bank said feedingeven more fire ... when we need more fire, more water will respond.Keeping them "pay" our responsibility, and the European central bank with its wrong policies and wrong time "who are assumed?

Recommend (3)PermalinkReport abusesolleric wrote:

Nov 27th 2009 8:23 GMT

Well done . Now l suggest you look at the relationships between the Banks and the other ibex 35 companies to analyse the interdependence of these companies which hides their true level of liquidity . As shareholders ,it is unlikely that the Banks will call in debt .ln fact all the corporate debt , possibly the highest in Europe has been restructured .Tax breaks were used to finance the Ferrovial , Santander ,Iberdrola ,Telefonica in their purchases of UK businesses .This was later condemned by the EU but it was a done deal . As we say here , "hace la ley ,hace la trampa" . lt would seem that there is a consensus that these large lbex 35 players can no longer make the great profits that they made with the Eu money on inflated infrastructure projects and have to seek other countries . Spain has not liberalised its railways ,its airports ,ports nor even EFE its Press Agency .Why no positive action from Brussels ? l hope that it has nothing to do with the fact that an ex PSOE Presidential candidate is the Comissioner for Economic Affairs . The Bolivian debt was pardoned to allow Repsol to continue exploiting the resources .Good business .75 M € has been given to the FAO for the Horn of Africa hopefullt to alliviate pirate and terrorist attacks .Spnish politics puts Spanish interests first and uses what it has to use to achieve this .Spain is an expert at delaying EU law which gives its many advantages.

Recommend (4)PermalinkReport abusegenerated3470283 wrote: Nov 27th 2009 8:29 GMT

Poor Spain, what have we done to deserve these politicians.? We all know the prime minister and his government are inept but they keep winning elections. I think the question is, where is the opposition? what are they doing?

Recommend (3)PermalinkReport abuseEx-Pat wrote: Nov 27th 2009 8:34 GMT

José María Aznar won the general election of 1996 largely because the voters were fed up with the corruption, thieving and ruination of the Country by Felipe González (PSOE). His handling of the economy, honesty, patriotism and seriousness led to his getting an overall majority in the general election of 2000. According to all the polls, he was set to win the 2004 elections with a landslide.

Three days before the elections of 2004, on the 11th of March there was a “terrorist attack” in Madrid. The PSOE blamed the P.P. for this and attributed it to the reaction of the voter against the involvement of Spanish troops in “Guerra de Irak”.

Spanish troops had been in the “Guerra de Irak” with George Bush Sr. and Felipe González but there was no major reaction to this. Nor did it influence the polls prior to the 2004 election.

The timing of this “Terrorist attack”, 3 days before the elections, the manipulation of it by the then opposition, the “supposed” immolation of the main protagonists (witnesses) the “Trial” which produced no result whatsoever, the subsequent silence, cover up of all events, destruction of all evidence, the fact that Zapatero was “negotiating” with ETA from the opposition during the second legislature of the P.P. is more than suspicious and now, more than 5 years after the event, we know nothing certain about this attack except that Al Qaeda denied having anything to do with it. It seems very unlikely that a small group of petty criminals (who were police informers) could organise such a well organised and executed terrorist attack which killed 192 innocent people and left more than 1700 seriously injured or maimed for life. However, sowing the seeds of panic in the minds of the Spanish led to “Presidente por accidente” Zapatero getting a majority, although not an overall

majority in the elections.

Why he got in again in 2008 remains a mystery to me but as someone has already said, the Spanish politicians are good at Marketing.

Recommend (7)PermalinkReport abusegenerated1334333 wrote: Nov 27th 2009 8:51 GMT

The article and comments are interesting but nobody really mentions the uncharted effects of the monetary union. This new situation where Spain has no longer the possibility of devaluation (as the UK has done) will make it extremely difficult and painful to get out of the situation. With a current balance which in absolute terms is the second worst worldwide (after the US) and having most of its exports within the euro area, I have a hard time figuring out which activity will create the jobs that will significantly dent the horrendous unemployment rate. Someone, sooner or later, has to tell the Spaniards the ‘inconvenient’ truth as the Irish and some of the Baltics have already learned. To me the real Spanish ‘miracle’ is that the streets are calm, it is perhaps because regionalism and football are indeed excellent anxiolytics, some other troubled countries may take note. Here in France I just cannot imagine what will happen with unemployment at the Spanish levels.

Recommend (2)PermalinkReport abuseRepublica Constitucional wrote: Nov 27th 2009 9:04 GMT

Spain is not a democracy:http://diariorc.com/media/prefacio.html

Recommend (1)PermalinkReport abuseSarrios wrote: Nov 27th 2009 9:40 GMT

I fully agree on this article. However, there is a crucial point not mentioned: INMIGRATION. In 10 years of "building boom" Spain has climbed its inmigration share from 1% to 12%.

Quality of life has worsened not only because of extra tension on public health or education system but also due to a big increase in crime (70% of people entering Spanish jails are foreigners, especially North Africans and Romanians). This is creating an enormous cost both in economical and social terms. Likewise, working conditions are getting worse as inmigrants tend to accept lower wages, thus putting national workers at risk. Banks and Building Societies are delighted with those extra 4 million people...more building, more credits.

Average people are puzzled. On the one hand they are worried with deterioration of public life, but on the orher hand they still enjoy high levels of spending thanks to generous and cheap credits. Not for long though...

The big consequence of this explosive cocktail (building,banks, inmigration...) is CORRUPTION. Corruption is increasing in Spain and it will make any economical recovery more and more difficult. Corruption affects equally to Socialist and Conservative party (PP)which means no alternatives in the

near future. Indeed, gloom prospects for Spain...

Recommend (8)PermalinkReport abuseSarrios wrote: Nov 27th 2009 9:49 GMT

Sam Hudje seems not to be happy in Spain. Perhaps he shoud consider leaving this country and going to his own, instead of posting insulting comments. As an Spaniard I am tired of this attitude among inmigrants.

Recommend (3)PermalinkReport abusegenerated2838756 wrote: Nov 27th 2009 9:53 GMT

Mr Zapatero is the worst Prime Minister in our Democracy.

Recommend (6)PermalinkReport abuseAlexLib wrote: Nov 27th 2009 10:08 GMT

I am sorry Sarrios, but Sam-Udje is correct in some instance. Secondly we do are racist!! and that is not good for us at all. We are not a country of "acogida" we are all day telling inmigrants that they worst less wich is completely unfaith for people that are helping us to do what we didn´t want to do. I remind you that Spain and million of Spanards went to France, USA and all South America and they were well recieved in these countries even if we weren´t well prepare poeple at that time after civil war we were only a rural country more or less. So I find unnaceptable a coment like yours, their everybody can see how intolerants we are.

Recommend (4)PermalinkReport abuseRepublica Constitucional wrote: Nov 27th 2009 10:17 GMT

Spain is a Kingdom of corruption. The higher judicial authority (CGPJ)is chosen by the two main political parties (PSOE and PP). All the hierarchy is chosen from above to below, so there is no separation of powers. The regional banks (Cajas de ahorros) are under control by the political parties, so there is no separation between political society and financial class. The prosecutor for corruption is chosen by the party in power, so the corruption that we see is the tip of the Iceberg. The house bubble grew under the political speculators from the regional banks down to the city councils. That is why the British were cought in illegal housing. The political candidates are chosen by three persons on the top of the parties and presented for ratification in closed lists under a proportional electoral system, so there is no representation of civil society. There are six levels of political administration all under these rules and nationalistic and separatist claims. The statistics coming from the spanish goverment never agree with Eurostat. So, be brave, invest in the kingdom of spain.

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amparo_rubio wrote: Nov 27th 2009 10:18 GMT

Nobody complains in Spain because it's not worthy. If you complain there you risk losing your job or not finding it. So that's why there are no strikes or protests. What for?So for me personally, a young professional who speaks 3 languages, the only way out is migrating as I am doing to the UK.Thanks to The Economist for telling the truth that nobody seems to do in Spain.

Recommend (5)PermalinkReport abusesergiotx2 wrote: Nov 27th 2009 10:22 GMT

we have what we deserve, Zapatero and the left hand parties has lied about the right hand parties linking them to Franco´s Age and talking about fascism, the old people and uneducated have believed them and now we have a Government in the way of south america´s dictators (Venezuela, Cuba, bolivia...) Very sad for us and for our pockects. Now, only the lazy people have privileges, as less you work more you earn, so the people doesnt try to find a job, only try work less.

I would like to ask for help to the others UE countries, but I understand that they have their own problems, never so big problems than Zapatero.

ZP, please leave us grow up, and stop your stupid ways of improvement.

Recommend (3)PermalinkReport abuseEl Torro wrote: Nov 27th 2009 10:27 GMT

Sarrios,If you are tired of "immigrants" speaking in that manner what are you doing about it? Instead of complaining that someone is telling the truth why don´t you stop the bhavior that is getting the comments. Why kill the messenger? The bad part is you are so blind to the truth that an "immigrant" has to point it out to you. You are the type that gives us all a bad reputation in the world.

Recommend (1)PermalinkReport abuseCSPITALY wrote: Nov 27th 2009 10:46 GMT

A realistic view of the Spanish situation. One of the highests unemployment rate in Europe and a very dark perspective for 2010. A more flexible labour market is required but Zapatero prefers to consolidate his political situation with the support of the unions who doesn´t care how many people is fired everyday.

Recommend (1)PermalinkReport abusebi79843 wrote: Nov 27th 2009 10:57 GMT

This article is a copy and paste of others published by The Economist in years 1993-1995. It appears

that has been written by a student that has spent a week-end in Spain before the hangover went away. Pathetic.

Recommend (1)PermalinkReport abusegenerated1106801 wrote: Nov 27th 2009 11:17 GMT

In my opinion Sam-Udje is someone whose project to make a living in Spain has failed. Are spaniards racist? Of course, they are. Are they more racist than brittons, frenchmen or danes? Of course not, they are much less rascist that those ones. Sam-Ujde has failed to understand the way of living and the idiosincrasy of a 45 million people country, and he thinks that everybody else is wrong, and he has the right to tell the others what they should be like. Bad luck, Sam-Udje, try a different country so that you can verify by yourelf with a new failure that it is you what is wrong.

Recommend (3)PermalinkReport abusegenerated1106801 wrote: Nov 27th 2009 11:31 GMT

Hi Ex-Pat,

This message is just to convey my congratulations to you. I continuously read your shouts, your screams, your upper case noisy style, and it leads me to thing that if only we had some hundreds like you in Spain, but doing serious job instead and not playing the full, we would become a global superpower in couple of weeks.

Kindly regards, "super brain" ;)

Recommend (1)PermalinkReport abuseMadri-leý wrote: Nov 27th 2009 12:02 GMT

To AlexLib:

It looks like you are living in Spain, don’t you?. That is why I am wondering where exactly, because your affirmation "The first thing I would do to get out of spanish recession is change our schedule of work. Any country that works from 10 am till 1.30 pm and after from 5 to 8 pm and has between 4 hours of long nap" is a false topic that does not apply to 90% of the Spanish companies I know. Perhaps is true in some SME in the South of Spain, where subsidies and low effort are the norm, but not in most of the most important Spanish companies, neither in the branches of multinationals in Spain.It is unfair to judge the total labour force of a country by a minority (I agree, a shaming minority)

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41-60 of 87Parmenides wrote: Nov 27th 2009 12:09 GMT

Rodriguez Zapatero's government is grossly incompetent by any reasonable standard. With few exceptions, the international opinion is already clear and agreed on this.

It is however, less well known to international observers (and should be of even greater concern to the citizens of the bull's hide) the authoritarian traits and dictatorial insticts of some of its members.

The Ministry of Defence, Carma Chacón, for one, went on record yesterday to say that the Popular Party should immediately withdraw its appeal against the Estatuto de Cataluña (EC) before the Constitutional Tribunal (CT).

Indeed, it appears increasingly clear that the CT will rule that large number of the EC's articles are against the Constitution. If such outcome materialises, the PP would be guilty of having brought to the attention of the CT (as two Socialist (non-Catalan) Autonomous Govenrments did as well!, do not miss this one)serious constitutional inconsistencies/contradictions in the EC.

Ms Chacon clearly wishes does not happen. Ms Chacón as a memeber of the government swore to protect the Constitution. It is plainly obvious that she has no interest whatsoever in doing so.

For Ms Chacón, the PP`s appeal is an attack on the Catalan nation. We've seen and heard this before,...too many times.

With regards to the respect for law and the use of the "sacred nation" as a killer of freedom of speech and thought Ms Chacón's attitude is not unlike those of German nazis, Italian fascists or Spanish falangistas. We have come full circle.

Recommend (3)PermalinkReport abuseSharpshoot wrote: Nov 27th 2009 12:12 GMT

Why don't you speak about the billions Spain spent to rescue banks? Oh, they didn't spent a dime... sorry... You are just a bunch of sick freaks barking loud at people, and that's OK since you can bark anything without having to prove you're right. Democracy rules!

Recommend (1)PermalinkReport abuseAlexLib wrote: Nov 27th 2009 12:16 GMT

Madri -leý. I am spanish and live in Spain and I found a shame the spanish siesta as a symbol of our identity. I lived many years outside the country and I find out more logical and productive for any nation to work 8 hours straight, plus a country with a recession as ours should be people working and not sleeping. I don´t live at the south let me tell you, I am right at the center of the nation

RecommendPermalinkReport abuseWhychange? wrote: Nov 27th 2009 12:37 GMT

This opinion article and most of the comments that follow seem to follow a similar ideological bias. As usual the blame is on the labor market. Yes we have a dual work market but we also must remember that it is a flexible market capable of creating six million jobs and destroying 2 million in a decade. The real problem with the Spanish economy though is due to cultural factors such as the risk aversion of most Spanish businessmen to new technologies. They would rather to continue with their, until recently, fairly succesful model of low wages + low value added products that needed so many

unskilled workers (tourism + construction + cheap cars). Zapatero at least is proposing that we do something new. Naïve? Perhaps but I frankly don't trust that conventional policies such as reining in the deficits and keeping wages low will help Spain transition to a more modern economy. We need structural reform but of another kind. The simplistic view that reducing the cost of firing workers with a fixed contract is going to take us out of this crisis is even more naïve.

Recommend (4)PermalinkReport abuseWhychange? wrote: Nov 27th 2009 12:40 GMT

Parmenides:

Let me guess some of your habits:Do you usually listen to COPE, read El Mundo or La Razón and preferentially live in Madrid or the center of Madrid?Are you a voter of PP?

Recommend (4)PermalinkReport abuseEx-Pat wrote: Nov 27th 2009 12:43 GMT

Hi generated1106801

Just to let you know that I am English, I have a wonderful Spanish wife (Married in England 37 years ago and worked all our lives there before retiring), I love living in Spain and I love the Spanish, the food and the customs. However I don't like either the policies of the PSOE nor their tactics of attacking the opposition instead of governing the country.

By the way, I am not paid by FAES to make these comments. They are strictly my observation of what is happening here. You may not agree with my opinions but please don't doubt my motives for having them.

Unfortuntely, Mariano Rajoy, who started out in 2004 leading an opposition has now relented and seems to have taken the part of the PSOE. He has dismissed all the good centre-right politicians and recruited some who seem to be more oriented towards the left than the right. Unless Rajoy goes, I see no hope for a positive change.

Recommend (3)PermalinkReport abusegenerated1722070 wrote: Nov 27th 2009 12:44 GMT

As a 38-year ex-pat U.S. resident of Spain who has been a Spanish citizen for a number of years, I agree with most of the points brought up in the article. In my opinion, the government needs to have the courage to tackle the labor unions and reform the labor laws to allow young, well-educated Spaniards to get decent-paying jobs.

My young adult children, who have lived here most of their lives, enjoy the lifestyle here but have no intention to work here once they finish their postgraduate degrees because of the scant opportunities

they have to find a good job.

Recommend (4)PermalinkReport abusefjarcheni wrote: Nov 27th 2009 1:01 GMT

After last year special report on Spain, I was missing a good article from The Economist regarding Spain's dreadful situation. Hello Europe!, we are down here!.

Finally the long awaited article came and the result is not pleasant for Spanish Goverment. Let alone for the spanish society as a whole.

I must agree with many comments posted here because they are in the right direction.In my view, after reading the article, the most relevant question comes: Is Spain, as a relevant economy, sleeping a deadly dream?. Undoubtedly, it is.

Do not take my words wrongly, but history wont judge Mr Zapatero's government as the lone culprit for this situation. Not even for its short-sighted economic policy or "not enough" measures against the downturn. Mr Zapatero, as everybody in Spain knows, is a by-product of the system, a policital creature, a chatterer not especially brilliant or witty, disconnected from the practical world,but well connected to the media moguls. A leader more appropiate for the good plentiful times, but terrible, when things get worse.

I do believe that in difficult times a killjoy leader is needed and apparently, a pamper spanish society, is not welcoming the idea after long years of prosperity. Even Mr Solbes, former Vicepresident and Finance minister, was forced to leave after, long and undisclosed, irreconcilable disagreements with theuneffective policies of Mr Zapatero

All that drives me to the coclusion that Spain is desperate needed of true leaders, taking full responsabilityof the situation and taking the so needed measures to put the country out of the recession. As a spaniard, I must recogniseresponsability as the virtue less likely to be found.

Most spaniards heard the sea maid chants from the banks and old lessons of hard work, prudence and money saving were forgotten. After all the mess they helped to create, big banks have been saved by expensive schemes, and regional banks are concealing through creative accounting, colossal losses from the housing bubble. Not surprisingly enough, regional banks are controlled by politicians.

My final point is, as said in some comments before, that normal citizen is alone in the cold, but society as a whole, is doing nothing to remedy.Spaniards are making good the popular phrase "¡Sálvese quién pueda!" (Every man for himself!) and it is shocking the lackof protests from a society with such a high unemployment rate.

Recommend (5)PermalinkReport abuseSharpshoot wrote: Nov 27th 2009 1:14 GMT

Ex-Pat, did you just accused Rajoy of being leftist? Hahahahaha. Next in line would be that the

corrupted PP leaders are those left winged politicians within PP, like Camps and stuff. You may not be paid by FAES, but you own PP stock for sure. :D

generated1722070, if you agree to the points of the article, you must be by now on a plane to your beloved Texas, Home of worthy Republicans. I agree, the Gov here is lousy, we need death penalty, private health system and trillions in saving banks and other private enterprises. Long live Canada. Or was it USA?

Recommend (3)PermalinkReport abuseSosumar wrote: Nov 27th 2009 1:27 GMT

Por favor, peperos, dejad de decir tonterias y decid cosas constructivas. Que tristeza!

Recommend (5)PermalinkReport abusegenerated3384226 wrote: Nov 27th 2009 1:30 GMT

Spain is certainly going through bad times and without courage and vision it will be very difficult to go out of this crisis. However, we can be sure of on e thing. A PP government would have been ever worse. One only needs to have a look at their time in power to see that all the did was to increase the size of the construction in the economy of Spain, which in part is what brought us to the crisis. Also, has anyone heard any idea put forward by that party to solve the situation? They are simply waiting, confident they will just get to power.

Recommend (5)PermalinkReport abuseSosumar wrote: Nov 27th 2009 1:31 GMT

Madri-ley: "Perhaps is true in some SME in the South of Spain, where subsidies and low effort are the norm"...???!!!??? La siesta is a false topic y esto no? Ya esta bien, hombreeeeeee, de leer tonterias de la gente

Recommend (1)PermalinkReport abuseerrare_humanum_est wrote: Nov 27th 2009 1:32 GMT

As a European Citizen living in Spain I am completely horrified by the Spanish Politics. Flaws in proposed laws are defended with "well you didn't do anything". Numbers are twisted and turned in a whatever way they want. The eternal optimism of ZP makes him blind for reality, and once he understands what the reality is, it is too late to act and the only way to solve it is with short term over-expensive patches.Small adjustments leave over 1milion unemployed outside official state numbers, something that is included in the European Statistics. Plan E was a huge cash expenses on uncontrolled and nonsense projects to keep some unemployed people off the unemployment lists (streets were simply redone).As long as ZP insists in ruling the country and pass through laws and budgets without agreeing with the largest opposition party PP (he actually buys his votes from smaller nationalist parties) Spain is

lost!!

Recommend (1)PermalinkReport abuseNora Glenn wrote: Nov 27th 2009 1:47 GMT

Nora

Ex-Pat gets it wrong when he says that José María Aznar 'was set to win the 2004 elections with a landslide.' It was Mariano Rajoy who was expected to win but lost because of honest (?) José María Aznar's handling of the aftermath of the bombings just before the elections. At times it felt like we were back in Franco's time with the public TV channels broadcasting football matches to try and distract people from the slowly emerging truth, i.e. it wasn't ETA. Aznar tried to manipulate the editors of the major newspapers into believing that the authors were ETA and sent out instructions to the embassies abroad to divulge that information - HONEST José María Aznar? Please....!Just in case you've forgotten, the 2003 War on Iraq was not sanctioned by the UN - remember the millions of people who took to the streets in Madrid (also in other places around the world) to protest about this injustice, I don't think this was the case during George H. Bush or Felipe Gonzalez's tenure.As for Zapatero 'negotiating' with ETA, whether we like it or not, governments must 'talk' with terrorists, the lines of communication should always be kept open and never break down. This is something ALL governments have done (including Aznar's). The PP could follow the example of the British Conservative party to whom the Labour Government of the time were eternally grateful to for their dignified silence during talks with the IRA, talks which eventually led to the Good Friday agreement, Peace Process, etc.

Recommend (3)PermalinkReport abusepaulis wrote: Nov 27th 2009 1:54 GMT

It seems that everyone who's criticising the Economist has a Nobel prize in Economics, isn't it?

RecommendPermalinkReport abusegenerated3237721 wrote: Nov 27th 2009 1:57 GMT

I'd like to point out a feature of the spanish culture, as an extension of the mediterranean culture;

When things go wrong and tempers run high, instead of fixing the problem, we start fighting each other. Everybody goes around seething with anger looking for somebody to blame for everything. Then the whole country becomes a theatrical set.

Recommend (1)PermalinkReport abuseCarlos Collaco wrote: Nov 27th 2009 2:07 GMT

Labelling Spain as the new sick man of Europe may be right given the underperformance of the

country's economy.A few more countries, however, would also fit the description as Europe deals with the consequences of the ravages of a major economic downturn set off by the excesses of capitalism allowed to run wild.Finding a healthy path to sustainable growth is the biggest challenge facing Spain and again many more countries around it and farther away.Even if there had been no collapse of markets worldwide, Spain would still have gone through the burst of the construction bubble left to inflate unchecked beyond any reasonable law of supply and demand.

Countries move on for they must but a return to the boom years of the recent past is unlikely not least because they were, to an extent, a fictionalised reality.

RecommendPermalinkReport abuseEx-Pat wrote: Nov 27th 2009 2:08 GMT

Nora Glenn.

Yes, of course it was Mariano Rajoy but nobody knew anything about him. It was the government of Aznar that was being judged.

Zapatero didn't negotiate with ETA as a representative of the government. He was in opposition.

You say that the author of the 11M was not ETA. The trial did not conclude even what explosive was used and certainly not who was responsible. Aznar and his people only suggested that ETA should not be excluded from the investigation. They did not manipulate the press or anyone else. In fact, all the manipulation came from the PSOE.

To this day, 5 and a half years later, justice has concluded absolutely nothing about the intellectual author and the supposed executors of the attack are all dead, supposedly having committed suicide.

Recommend (2)PermalinkReport abusegenerated2842264 wrote: Nov 27th 2009 2:11 GMT

Spain is pathetic.

Tourism is a big business in this country, however only a few percent (less than 3%) of the population can effectively speak english. Now they want to start more R&D when they have the highest school drop-out in Europe and not one single university is on the top 100 global university list.

Recommend (3)PermalinkReport abuseSharpshoot wrote: Nov 27th 2009 2:22 GMT

Ex-Pat, there's nothing more pathetic than self delusion. And to all Nobel prizes winners supporting "The Economist" , paulis, this one is on you, why didn't you foresee the crisis and correct the failing

system before it went dead? All you people do is label Spain and the spaniards, while waiting for the summer holidays just to come here, drink till puke and try to get laid whilst you're on cocaine up your brows.Oops, I was labeling brits on holidays in Spain... Sorry... :D

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61-80 of 87MY_OPINION wrote: Nov 27th 2009 2:40 GMT

I agree with you, Mr GatoNegro. All the comments here are from Spanish neocon people, all!! These kind of people are extremately radical. PP is the worst left-party in Europe, without projets for spanish people and with the worst education. The leader, Mr Rajoy, has a very low popularity, important party-problems about his leardership and credibility.

1- The Spanish Pension System and Social Security is a strong one with a surplus of 13.000 million and 60.000 millon extra found to avoid bad situations. The Partido Popular (PP, People's party) wants to cut the social rights away, but it will provoke social chaos and strikes like in the past. Spanish people doesn´t love them.

2- PP and Mr Aznar´s goverment is the responsable of "papeles para todos" (otherwise known as uncontrolled immigration) for two times. They approved the regulation to thousands of people in illegal situation for two times. There was a weak person control of borders and there entered again a lot of people in irregular situation.

The new prime minister, Mr Zapatero had to put order. Zapatero decided to control the borders and to regularize the situation of the persons in irregular situation that they were working. This it is true. But these neocon people don´t remember their decitions.

3- The Spainsh finantial system is one of best systems around the world

Recommend (4)PermalinkReport abuseNora Glenn wrote: Nov 27th 2009 2:44 GMT

Ex-Pat, are you really living in Spain? Of course Aznar tried to manipulate the media. The editors of the major newspapers brought out an early edition declaring that ETA were the authors, acting on the information conveyed by Aznar in his personal phone calls - they may not have liked him much but they believed that he would not lie on a matter of such gravity, ¡ilusos! The people refused to be manipulated as they had been in Franco's times and demanded to know the truth fearing that the true nature of the bombings would be covered up until the elections were over. If you call this PSOE manipulation, you've got the wrong end of the stick , people power is more like it. Another example, Telemadrid, run by PP's Esperanza Aguirre, showed a film about the murder of Fernando Buesa at the hands of Eta, subliminal suggestion?BTW, Zapatero has been criticised (more like torn to pieces!) for attempting to talk with ETA while he was in government, not in opposition. Remember the ceasefire? PP criticised him on a daily basis and just never let the government get on with it. As an Englishman, you must admit that the Conservatives behaved in a much more admirable and statesmanlike way during the Irish Peace process, but of course, they were hoping for the common good, not like their Spanish counterparts.

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MY_OPINION wrote: Nov 27th 2009 2:58 GMT

PP´s politicians use whatever they consider to get the POWER. The use the economic situation and the kidnappings of the pirates without responsability. The don´t have global view. The main example is the manipulation on the authorship of the attempts of the year 2004. The PP wanted to make us believe that the authorship belonged to ETA instead of the islamist ones to win the elections with absolute majority. This one is the way of acting of this party even in the actuality. Patetic.

These critical messages are an example of how these neocons follow the PP´s script.

I´d like PP to be as Merkel´s or Sarkozy´s parties. But, at the moment, is imposible.

Recommend (4)PermalinkReport abuseEx-Pat wrote: Nov 27th 2009 3:13 GMT

Nora Glenn

Tell me about Iñaki Gabilondo's comments about information from 3 reliable sources about suicide bombers with their bodies shaved and wearing three pairs of underpants? I guess you don't consider this to be manipulation as it came from supporters of the PSOE.

Recommend (2)PermalinkReport abuseMY_OPINION wrote: Nov 27th 2009 3:28 GMT

The economic indicators are improving and the alternative of the PP is not wanted by the citizens.

They (PP) are very nervous because of that and the political corruption in the PP controlled regional Government of Valencia and sectors in Madrid and Majorca.

http://www.thereader.es/en/spain-news-stories/832-more-revelations-in-ca...

The Court will publicate 30.000 pages about this "caso Gürtel". The credibility of the PP is going to fall down strongly

Recommend (4)PermalinkReport abuseEx-Pat wrote: Nov 27th 2009 3:32 GMT

Nora Glenn"The people refused to be manipulated as they had been in Franco's times and demanded to know the truth fearing that the true nature of the bombings would be covered up until the elections were over."

We still don't know the truth 5 and a half years later. Evidence like the mochila de Vallecas was produced in record time from an unknown source to convince the voters that it was an an attack of Islamic origin. Al Qaeda denied it and they are normally proud of their activities. The theory that it was Al Qaeda inspired and executed by a few Moroccan small time criminals is nothing more than

targeted conjecture.

Recommend (2)PermalinkReport abuse^JAHN^ wrote: Nov 27th 2009 3:44 GMT

What's the diagnosis? This makes me laugh... it may be worse, get chronic. Oh, what a calamity!

RecommendPermalinkReport abuseEx-Pat wrote: Nov 27th 2009 3:45 GMT

I don't propose to make any more comments on this article but before leaving, I have to say that the suggestion that the highly sophisticated Madrid Train Terrorist Attack on the 11th of March 2004 was planned, financed and executed by a handful of Moroccan small time crooks and drug dealers is too ridiculous to be serious.

As regard the "Caso Gürtel", I'm sure that there is some basis behind the accusations but exactly who is involved and to what extent remains to be tried in the courts. I suspect there is much less to this than the PSOE would like us to believe.

Recommend (2)PermalinkReport abusegenerated3272214 wrote: Nov 27th 2009 4:15 GMT

The Spanish government's handling of the present crisis is shocking. The majority of Spaniards are completely unaware of the damage he is doing to this country. I remember clearly Aznar telling Zapatero that 'he was handing over the country and it's finances in good order and with clean hands (excuse me if this is not word perfect)', now several years and another election further on the country is in tatters. No provision was made during the boom years for leaner times and instead a stream of constant lies and convoluted contradicting explanations lay the blame at everyone else's door apart from his own.

The opposition party should be using this to their advantage but unfortunately in party fighting and a general consensus that the opposition lacks a charismatic leader with a viable mandate dilute any real hope that a change of government would lead this country in a better direction.

Every time I switch on the news Zapatero seems to be handing out more money to other countries in 'need' or for other social causes. My town has over 50% unemployment in the under 35 age bracket. Money promised to individuals and small & medium business to help them through this crisis is advertised at virtually press conference, but next to impossible to actually access. The uninformed sing his praises and see him as a champion of the people. The more informed wish that the opposition would reorganise itself into a viable government proposition before the next election.

Recommend (1)PermalinkReport abusesanmartinian wrote: Nov 27th 2009 4:50 GMT

Two unrelated comments:1-The Economist now declares Spain the "sick man of Europe".I, neither a Spaniard nor living in the country but knowing it better than many and loving their peoples as much as they do, am not particularly worried.Before Spain, The Economist has declared Germany, Italy, Portugal and so on "the sick man of Europe" and look at them now. Despite the hard times not doing too badly, are they?Funnily enough, Britain has never been labelled "the sick man of Europe" and look at Britain now. Not doing too well, is she?Probably it was even worse in October 2008 according to whosoever important in the banking authorities declaring that the two of the largest British banks were as close to collapse as Lehman Bros.I have often repeated: Spain is going through a bad period. So are we all. Spaniards have shown over and over again they have the ingenuity, stamina and perseverance to pull through. They have been through much worse and only a year ago The Economist was still labelling Spain as "the" success story.You'll be there again.2- I've noticed many of the comments to this article are written by Britons living in Spain and they argue among them about Spanish matters even more than Spaniards themselves. Could this be a signal that Britons are far less Euro-sceptic than tabloids, politicians and many of the serious press try to make us Continentals believe? Would it be too much of a "loony conspiracy theory" (not my words: those of Adam Roberts, News Editor moderating an Economist debate on a different matter)to imagine powerful financial interests trying to show Britain and continental countries that English public opinion is against deepening European institutions?The thriller of who "done it" in the present crash and aftermath is far from over.I'm sure Spain will have recovered by then. I wish I could say the same for all other countries.

Recommend (7)PermalinkReport abuseAllan Fisher wrote: Nov 27th 2009 5:02 GMT

It may be convenient to blame Zapatero, not that he is blameless, and pretend that PP could do better. It might, but not enough. Basic problems such as overbuilding and local corruption have been bipartisan. Spain has been a society of faith, and many here have believed in miracles -- economic ones. But uncompetitive salaries, wages, and prices cannot be maintained by divine intervention. The solution is on earth, and seven lean years await us.

Recommend (3)PermalinkReport abusejoangrau wrote: Nov 27th 2009 5:11 GMT

Tough times ahead for Spain. There is an aparently congenetical incompetence of the Goverment from one side unable to undestand the subtless of the economy, from other side the political imposibility to apply some sort of Keynessian policies as to promote the Mediterranean ecomomic highway, (alreay recomended en the fifthies from the WB and IMF) just because put Madrid in the center of nowhere. (Sorry for BA)If you try to go by train from Barcelona to Perpinyà both two catalan cities you must change the train because we have to diferent size of trucks. How to reach Marseille or Genoa in a plan to acumulative synergies?But the Zapatero's Kenyssian plan is to fulfill the holes en spanish towns.Even as our Catalan goverment is no more skilled that the spanish goverment are, our people I guess could handle with the crisis much better if for our geografical placement at least.

And, I promise, we are working hard no to be a burden for Spain asap

Recommend (2)PermalinkReport abuseMadrilenya wrote: Nov 27th 2009 6:14 GMT

Congrats for this article. It describes Spanish situation quite accurately. However, I would like to point out some aspects that have not been considered.1) Spain is a young democracy. Let us not forget that despite that Franco eventually passed away 1975, there is still a lot of sociologic franquism in our society. Some still miss that "peaceful period". Most people do not see themselves as citizens but as serves.2) Free thinking has been repressed for so long, that it is more convenient to just go with the flow.3) We expect the State to take care of us, rather than being proactive and taking our own future in our hands.4) Meritocracy does not exist in Spain. Very often we have companies rule by "sons of...". Mostly sons of Franco friendly families. Being excellent is not an option, since we are surrounded by mediocricy.5) This is the first generation that had the possibility to get proper and high education.6) Where is the oposition? Fighting against each other. I don't blame them, Rajoy is even worse than Zapatero.7) Is the oposition really willing to carry out the necesary reforms? During their time in goverment, they just made sure that former public companies went to their friends and increased the bubble.8) Why is the Popular Party more concerned on Church related issues (abortion, gay marriage) than about the Economy.9) Where is the PP's value proposition?

And to all the "ashamed" Spaniards, let me tell you something. Instead of complaining, do something about it. Do not wait until the next electiions. And actually, I feel proud of my country regardless of the Goverment.

Again, I consider this article a "As-Is Assessment". I would have loved some recommendations.

Recommend (2)PermalinkReport abusegenerated1974780 wrote: Nov 27th 2009 6:18 GMT

Wasn't it The Economist who talked in 2005 or 2006 about "The New Spain"? Wasn't it in that report that they mentioned all possible good words that one can find in a dictionary about Zapatero's Administration? So why didn't The Economist hardly critisice the "economy of bricks and mortars" at that time? How easy to talk well when there is GDP growth and to talk bad when there's downturn.

Recommend (5)PermalinkReport abuseian k wrote: Nov 27th 2009 7:01 GMT

Change will be slow in Spain, despite the appalling situation it is in right now. Why? Well, the question should actually be "Why not?" Why should Spain change when it has everything, ... sun, seas, surf, sand, soccer, and ... Zapatero. Politicians aside, Spain is really The Lucky Country. I have lived here almost three years, and I love it! It has everything!! The people I know are hard working, full of energy, great sense of humor, willing to share.... full of virtues. Sure, they like their 3 hour

lunch breaks and generous government hand outs (especially if you are unemployed), all of which only adds to the luck of this nation's people.

However, the reason change will be slow in this country is because of an amazing boina mentality! And this is deeply rooted. Strong are the divisions between the nation's people (or at least the politicians of these people): Cataluña, Pais Vasco, Galicia, Andalucia,.... each wanting, to various degrees, to keep their autonomy and individuality. How many times I have heard "I feel more Basque/ Catalan than Spanish"! On the one hand, I respect this attitude, because keeping your own language and culture is an integral part of being a person, keeping your identity. However, when this attitude spills over into short-sighted views of the economy, national development, globalization, etc, Spain is divided, and will remain divided "hasta que cada uno quite la boina" (until each one removes his boina). But while the glorious sun still shines in Spain, while she is set on winning the World Cup, and while the master of marketing and image management Zapatero still remains, nothing significant will change in Spain. She is has everything... for now.

Recommend (1)PermalinkReport abuseYouknewitall wrote: Nov 27th 2009 7:19 GMT

Honestly, how easy is to bring up to the table the solutions when the problems are already sorted out.

Well, I strongly recommend all the Spaniards posting comments here to go back to job instead of wasting their time reading this sort of articles and giving useless and undemanded advise here.

Este tipo de artículos sólo critican a España para hacer más difícil la recuperación. Los mismos que ya la criticaban cuando era la "perla" de Europa por el mero hecho e intención de dañar intereses españoles.

Puede haber un fondo de verdad, pero por favor, no demos soluciones absurdas a la crisis como si todos supieramos la solución a un problema tan complejo y queramos dar a entender que los que gobiernan son los que se equivocan.

RecommendPermalinkReport abusedariointernet.com wrote: Nov 27th 2009 7:54 GMT

I want to thank your magazine for critisizing the Spanish Government. You nailed it when you pointed out that the governments measures are a bunch of "good intentions". True, in Spain, policies are made for theatrical purposes only. One example is the "Smoking Ban" law. In California, where I used to live, the law would force the establishments to have two zones, one open air for smokers and another one for non-smokers. If they couldn't provide that, smoking would not be allowed. In Spain, all the law says is that the Bar has to choose wether it wants to be Smoker friendly or be a non smoking bar. Well, guess what , all the bar's just put a sign out saying "This is a smoking friendly Establishment"!!! So many examples just like these. In Spain, most of us can never qualify for any goverment program because they are designed out of fantasy and do not match real life. So in real life nobody qualifies. For example, in order to qualify for help buying a home in Madrid their rule says that the square meter price should be less than something -cant remember exactly- like Euro 1400 m2 when in real life in center madrid the m2 price of an apartment is Euro 4200. Cheap firing of employees is not the solution to Spain's economy problem. You have to realize that the less productive employees are government workers. Private company workers in Spain are poorly paid slaves!!! The Economist should have a wider set of suggestions and stay away from this single

solution concept.

http://updatesdario.blogspot.com/search/label/vivienda

RecommendPermalinkReport abusemorchid wrote: Nov 27th 2009 8:06 GMT

it's easy to blame zapatero now , when the current spanish crises was created by a so called " josé maria aznar"zapetero and his governement have many problems ... but don't forget also aznar and his (faux liberal) policy of prosperity .

4 years before before i was in madrid i've seen a lot of building projects and constructors build before selling ! now is desert

ps: im not spanish im moroccan , i travell so times to spain and i find beautiful country so hopes that things will change in the near future

RecommendPermalinkReport abusejunkyardmusic wrote: Nov 27th 2009 8:16 GMT

I am astounded by the bulk of the commentaries being left here. Most people are adding nothing to the debate except the usual whining about the poor state of affairs in Spain, the ineptitude of Zapatero and what a heavy load all immigrants have now turned out to be -no mention at all two or three years ago when everything was rosy and Ecuatorians served us nationals our well deserved cañas in a trendy outfit. Read again boneheads!! The Economist states that Spain got drunk on bricks and mortar, which it was also doing under the rule of PP. The current Work laws are basically the same that Mr Aznar enforced. Education is the same disaster as it was under PP´s government. So, we can rightly say that ZP has been an inept leader, but it is idiotic to come now and pretend these woes are solely the socialist´s fault. Btw, PP have still to make out a program detailing what their plan is apart of being the holier than thou party: whether you like it or not, PP don´t outline any politics, just sit down with a poker face and tell to whoever wants to listen that they´ve got the royal flush. Very high politics indeed!!

RecommendPermalinkReport abusegenerated1334333 wrote: Nov 27th 2009 8:55 GMT

Most of the contributions are left vs. right, regions vs. center, Spaniards vs. immigrants and, while reflecting current Spanish preoccupations, do not add much to the analysis of what needs to be done.

I agree with the criticism heaped upon The Economist for past attitudes praising an economic model too dependent on a single sector, but to their discharge I'd say they have always warned of the lack of competitiveness made worse by the monetary union.

I do not agree with those who say that Spain has in the past walked away from similar situations and it will do likewise now: in the past it walked away thanks to devaluation which today it is not an

alternative.

The problem of Spain, as has already being pointed out in another comment, is how to create the millions of jobs necessary for all those unemployed (Spanish + immigrants). This is not a matter of left or right, nor of Madrid vs. Barcelona. I am Spanish but live and work in another EU country, I work for a multinational company with factories in Spain and the fact is that Spanish costs are way too high even when compared with our German factories. We, if anything, will be downsizing there.

So, where will the jobs come from?, the more I think about it the more I find that the only solution is: bricks & mortar

Gomero

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Spain's economic troubles

Unsustainable

The government may still be too optimistic over the country’s prospects

See article

Nov 26th 2009 | MADRID

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81-87 of 87benidormbusinessman wrote: Nov 27th 2009 9:10 GMT

The situation in Spain is FAR MORE complex, than your otherwise excellent article states. Towns, and provincial governments are sky-high in debts, to mainly local, or national banks. Since the income of all towns is heavily related to sales of properties, and the opening of new commercial or industrial units is must be clear to anyone, that nearly all spanish towns are in dire financial trouble. Many towns in Valencia-Alicante area have announced increases for property-tax, for the 2010 above 30%. But even that is nowhere near enough to balance the books. The only way, to 'balance' the books is simple: don't pay any bills. But that way out, is coming to end. Many suppliers have already started to ask cash up front to townhalls. The next things to happen, will be delayed salary-payments, a stop in investments, and eventually, lay-offs, by the tens of thousands, allover the country. The announcement of the government that all VAT will be increased in 2010, for sure is also going to affect the Economy. Add to that, that more and more unemployed will be running out of income-support (unemploymentsubsidies, you get for maximum 2 years) and the problems are far more serious, than stated. The spanish National Bank has obliged all financial institutes to increase their provision for unsold properties, in Q4 this year, which will wipe out any chance for financial support from them, for possible governmental plans. The only solution for Spain, is, tens of billions support`per year, for decades to reconstructure almost everything, or, and not impossible, within 2 to 5 years, Spain leaving the euro, getting back to the peseta, devaluate heavily, and let the currency float ...

RecommendPermalinkReport abuseluisccmm wrote: Nov 27th 2009 9:12 GMT

I have read many things in my life about economy, but now I think that about Spain, the Economist is being too pesimistic and unrealistic. The first thing, is the property market.They say, that Spain must try to put in order its house, and i guess the mean the columns of the economy. So now I leave one question? Does anybody has doubts that when this crisis will desapear everything will be back again... and I mean... everything... the bankers in the UK will come again to

their crazy financial profesional leaves and althought we will not let them do everything they will.In Spain, the property sector, will not be death. There will be a large number of spanish citizens that choose as a way of life to have their own property, something thas doesn´t happens in other northern cultures. In Spain people is very sensible for properties, and so on they prefer having their own property than rent it.and apart from that, do you think the british will prefer to Moroco or Tunizia. There will be thousands of Europeans willing to pay money to live in the Coast....

Regarding, to the reforms in the labour market. It could be better, in some way, but it ´s frommy point of view more important, to change the education system and improve it, and also to encourage spanish young people to set up a business and give more and more benefits to do that...That´s my point of view.

RecommendPermalinkReport abusegenerated2218913 wrote: Nov 27th 2009 9:14 GMT

Spain-a country where nothing makes sense...i've been living in madrid for the last 5yrs & i still can't figure out how things work here.*unemployment approaching 20%*a housing bubble that refuses to pop*super low salaries*a highly unproductive workforce*low purchasing power for consumers*a very conformist society-seem content with status quo*a government that is oblivious to its problems*rampant tax evasion*millions of unsold new flats*millions of second hand flats that no one will buy*a false belief that housing prices never fall*banks hiding billions in non performing loans & mortgagessomeone tell me when things give!

Recommend (2)PermalinkReport abuseParmenides wrote: Nov 27th 2009 9:15 GMT

Hi sanmartinian

Hope you are doing well.

Those, like your good self, who look at Spain from the distance have a better perspective of things than those like myself who, perhaps, can't see the forest for the trees. I only hope you are right. I am afraid you are wrong. This is going to get much worse before it gets better.

RecommendPermalinkReport abuseexLondoner wrote: Nov 27th 2009 10:35 GMT

Hola!It's so nice to have it said by someone other than the spaniards... I have lived in the UK for 10 years, and the lack of productivity that I've seen in Spain in the last 18 months can't be paired with anything else. Moreover, the bossy middle manager feel they're godsend. So, how can a country be productive? Just need to see the stats of the OCDE where Spain is at the bottom. Now it's time to think about restructuring the labour market, invest in productive industry (not bricks) and hope that the rest of Europe recovers quick enough so that they come back to Spain seeking the sun. That should help us going. Otherwise, with the level of entrepreneurism of the average spaniard, this country is going to remain a laggard for the foreseeable.And have to be said, I'm Spanish.

RecommendPermalinkReport abusegenerated3118141 wrote: Nov 27th 2009 11:47 GMT

Several readers have commented on the relative lack of civil disorder given the country has around 20% unemployment. Well, my answer would be 'wait and see'. At present a large part of Spain seems to be in a kind of collective wishful thinking mode. The government is telling the people that things are getting better when they plainly aren't. The deceleration in the deterioration of GDP is only happening because central and local governments are ploughing in billions of Euros in Plan E, car subsidies and other unsustainable short-lived project works. Bread for today and hunger for tomorrow as the Spaniards say. Also bear in mind that severance packages are very generous indeed- up to 45 days of salary for every year worked plus entitlement to 2 years of a contributions based unemployment benefit. So in fact most Spaniards still have income and savings even if they're not working. In addition, Euribor is at an all time low so right now millions with mortgages have seen their payments slashed. Finally, the government has nearly all the popular press behind it, e.g the PRISA group, not to mention the state and local TV channels who of course are all living off subsidies, so no surprise there. But this is a nightmare scenario because the millions of new unemployed will soon begin to run out of funds, interest rates may well begin ro rise again next summer and the public defecit is growing so alarmingly that all these stimulus packages will have to be stopped. This in turn means even more unemployed in a never ending viscious circle.

I think it's only a question of time before Spain becomes an international problem for the ECB, IMF or whatever. The country's going to need a huge bail-out which it will get, but with conditions. Then the fun will really start because the government, whoever it may be, is going to have to make sweeping reforms to its economic and social systems. Maybe 'necessity will be the mother of invention'. I hope so.

RecommendPermalinkReport abusejunkyardmusic wrote: Nov 27th 2009 11:55 GMT

ex-londoner:

so you´re spanish... good for you, now I think that´s about anybody who cared to post on this thread.

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