Thursday, August 6, 2015
Spain Breaks Out Of Its Economic Grave...growing faster then US. Greek socialism still failing.
08/05/2015 06:52 PM ET
Recoveries: Spain has clawed its way out of its economic morass and now has the highest growth in Europe and much lower unemployment. Yes, there are ways out of bad predicaments, as this resilient country has shown.
Just four years ago, Spain looked like a basket case. Europe's fifth-largest economy, the ignominious "S" in Europe's economically wretched PIIGS — Portugal, Ireland, Italy, Greece and Spain — was growing at negative 0.6% (though that was better than 2009's -3.6%) and faced a jobless rate of 21%.
Today, Spain's economy has roared to life, with 3.1% growth forecast this year and talk that the International Monetary Fund could raise that to 3.3%. Its growth rate is double the eurozone average, and the country is now viewed as the European Union's shining economic star.
The best part is that the improvement is no phony marquee number based on public spending, but evidence of real economic activity bubbling up from the private sector.
Unemployment in July fell for the sixth straight month by 74,028 to 4 million, the lowest since July 1998 and nearly three times the year-earlier level, according to Tuesday's Employment and Social Security Ministry report. Yes, some of it can be chalked up to vacation hiring and good weather, but not all, not numbers that size.
The comeback is led by conservative Prime Minister Mariano Rajoy. Elected in 2011, he vowed to cut spending, loosen labor laws, lower corporate taxes and bite the bullet of austerity for a European Union bailout.
Rajoy had to cut pensions and freeze salaries of civil servants, which caused riots and prompted calls from the left for his resignation. He also focused on raising exports, key to Germany's economic strength.
But other than going along with a higher VAT tax, Rajoy hasn't wavered much at all. And in his quiet Galician way, he now takes credit: "Seeing what is happening to others right now, one has to say it was worth it."
Spain still has work to do but has clearly turned the corner, setting a hopeful example for the basket cases of today such as Greece and Puerto Rico.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment