Latest official figures released today by the National Institute of Statistics (INE) have confirmed that the Spanish economy stagnated on a quarterly basis between July and September.
However, according to the data released today, Spanish GDP continued to show a growth rate after two years of decline, advancing 0.2% over the third quarter of 2009.
INE said that stagnation in the third quarter is due to a lower contribution from domestic demand in previous quarters.
These figures confirm the estimate made last Friday by the Bank of Spain in its latest economic bulletin.
Continuing concern over Eurozone debt particularly Ireland which is close to default has hit the value of the Euro this week. It is very difficult to see how these debt burden countries, both public and private within the EZ can get their economies moving towards significant growth levels.
The employment and growth created by the property boom in Spain has gone, probably for at least a decade. If stagnation is not to continue new forms of economic activity that creates employment need to be found.
Where will future growth materialise? That is the principal question for Spain.
Zapatero banks on “green economy” to create employment
The Spanish Prime Minister José Luis Rodríguez Zapatero, said today that the renewable energy sector, transport, sustainable building and eco-industry in Spain have the potential to create a million jobs in the next ten years.
Zapatero presented the figure at a round table forum he chaired on the theme of “Green Growth”, as part of the business summit held in Seoul before the main G-20 summit.
At this meeting, to which the presidents of Repsol, Iberdrola and Acciona were also invited, Zapatero underlined the importance of the dialogue the Government has set in motion by with companies to reach an agreement on energy policy for next decade, which will create a sustainable model “with the minimum cost to consumers”.
Zapatero’s clear message at the summit is that “green economy represents a huge future potential for generating employment, making technological advances and increasing competitiveness.”
Spain’s objective is to ensure that by 2020 at least 20% of energy comes from renewable sources, reduce energy intensity by 20% and lower CO2 emissions by 10% from current levels.
30% of electricity in Spain now comes from clean sources and Zapatero pointed out that, thanks to the weather conditions the day before yesterday, the country broke a record and almost 70% of energy production coming from clean sources, 40% from wind power.
He described “green” industry as a “solid” sector, that currently generates 200,000 jobs and that focuses on technological development, underlining the importance of reducing emissions through energy efficiency. The fight against climate change, he added, requires “determination, perseverance, awareness and resources”, but “the costs of inaction far outweigh those of action.”
Recognising that only a major technological leap in the energy sector will make it possible to reduce emissions, he stressed the “great business opportunities” out there for investment capitalists and the potential of the leading “green” companies.
Zapatero did, however, also stress the importance of increasing the public’s awareness, at the same time as taking legislative action on a nationwide basis and promoting private initiatives
Zapatero is valiantly clutching at straws. The green economy will create some employment and Spain is ideally suited to take advantage with so much wind and sunshine. However it’s unlikely to create the jobs or GDP lost with the collapse of construction and property. Manufacturing of alternative energy systems is currently dominated by the Dutch and Danes who have been active in this sector for years. However I agree it’s a least one positive move forward.
Here is a good article on the current state of Ireland which I believe can equally be applied to Spain and Portugal.
Not yet brianc, hold your breath until next year. Ireland needs a serious bail out and Portugal almost certainly will follow. The EU bailout fund will soon dry up if Spain also requests funding. These countries will not experience any meaningful growth and will need to be propped up for some time to come. Then there is the mess of Greece.
There is a flight of capital going on this morning from the Ibex down 1.5%, rows in the EU over budget increases and disagreement at G20. Stability is not a done deal.
With the IBEX I believe the stagnant Q3 Spanish growth figures published this week are a significant factor. People are beginning to realise that it will be a long hard slog out of this recession in Spain.
Seems like the bond markets are calming a bit after the reassuring words out of Seoul this morning. Question is, will the reassuring words turn into concrete action?
Markets have rallied for now after soothing statements from G20. However that changes nothing. Investors are rightly concerned with EZ debt levels and this factor will return again and again to haunt markets until the boil is lanced by either wholesale bail outs or default. Uncertainty fuels the bears.
The Spanish economy will be very slow to recover unless and until growth can be found from new markets. The property market will stay depressed until recovery is firmly in place both in domestic terms and within other EU states. These two factors are intrinsically linked.
There are currently so many financial obstacles in the way of recovery, I would not be surprised to see further recessionary periods and even a great depression in the coming months/years. The world is on an economic knife edge right now and it could fall either way.
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