Suspect it will be more of the same ole but worth a look Why everyone seems to pinpoint Spains woes starting with the credit crunch I have no idea. Spain was already failing re.property, they just built too many. A lot of Estate agents on the costas were closing down from about 2006!
Exactly – the problem isn’t the crash, it was creation of the bubble in the first place. To some extent what we’re seeing now is the best thing about the euro – without it the government would simply devalue and keep the scam going. Instead they are being forced to diversify into other sectors. At some point I’m hoping that it will dawn on them that Spain has to liberalise its economy and create genuine competition, so people are rewarded (rather than be punished) for starting up companies and doing business. The alternative is for Spain to leave the euro.
Yes we’re already seeing signs of people getting on and starting up businesses ( for example read http://monocle.com/magazine/issues/59/starting-again/ ) and the export sector is rising admirably to the challenge. Hopefully too, the investment planned by the auto companies will not only create jobs, but encourage other multi-nationals to Spain. It’s claimed here that 73,000 jobs are to be create by the car industry http://www.theolivepress.es/spain-news/2012/12/04/boost-for-spanish-car-industry/ but we’ll believe it when we see it. But yes, if the govt keeps raising taxes then they could end up snuffing the recovery out. Which is probably why they are resisting the bailout option – no point taking that and then see the economy get hit further by further tax increases demanded by the Troika. Spain leave the Euro? It’s still an option, but I suspect now they’ll remain in it, despite the fact they could recover a lot faster outside. I used to be 65% of the opinion that Spain would leave the Euro soon, but I’m now around 35% 😉