"Spain will be in crisis for another 2 or 3 years"

[SPI News]

Mario Weitz, a consultant for the World Bank and European Commission, believes that the crisis which Spain is experiencing will not pass for at least another 2 years. “Spain won’t exit its crisis for another 2 or 3 years, assuming that to do so there must be a rise in employment and not just growth in the economy, the latter of which will happen first.”

During Weitz’s address at the Finance Forum of the Chambers of Commerce in Bilbao, he also said that the biggest mistake made by Spain’s Prime Minister, Mariano Rajoy, has been to not take sufficient care of the country’s small and medium sized enterprises (SMEs).

“The problem has been that the government have focused their resources on the largest companies whereas the SMEs make up 98% of the country’s businesses.” He complained that the government had not helped the SMEs get access to finance and had allowed too many of them to go bankrupt.

In a meeting with Basque businessmen Weitz advised them that the only way that Spain will exit the crisis will be ensuring growth in exports as for him, it is the only way that growth can be created while an economy is in conditions of austerity. Spanish exports have in fact been performing well, growth in exports was up 8% to April for 2013 and they have provided some of the few positive economic news stories for the country since the start of the crisis.

However, Weitz urged Spanish companies to look further afield for potential markets for their products. China was given as an example, currently exports to China account for 1.6% of Spain’s total while that figure is 25% of Germany’s total and 30% of Chile’s, Peru’s and Brazil’s.

As well as increasing exports Weitz sees more investment in Research and Development and basing the economy on technology, innovation and training as the ways to ensure a recovery of the economy in the long term.

Spain’s exports are one of the keys to its successful recovery according to Mario Weitz

[angie]

A lot of people guestimate things like this but I think it’s extremely hard to say with any certainty, many previous forecasts have been wrong, it could longer, even 10 years but then again in 1 year things might be a lot better, who knows for certain? World events can hinder or help, and whilst one market might improve another might worsen, there are so many markets even within one country 🙄

I think there is less pessimism in the UK and there’s less news regarding Eurozone worries, but then events come out of the blue in Brazil and Turkey for instance just to remind us 🙄

I’d hate to be a forecaster even for the weather in the UK 😕

[Chopera]

I think he’s correct. I suspect there may even be some growth this year, but it’ll take a couple of years before companies have sufficient confidence to recruit people. As Angie says, anything can happen in those 2 years.

[Author]

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