Spain’s economy

Not yet the new Germany

An economic story that is good in parts

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Readers' comments



South American

A point at which Spain stands better than France, Italy and Greece, is the modernization of the left. Rubalcaba of the PSOE makes a strong opposition and try loosening the "austerity" (better the German name "Sparpolitik" = "saving policy" sounds less terrible then austerity), but the demands of the Left in Spain are modern: preservation of the social state and also a business-friendly policy. This must be surprising because the anti-capitalist left was equally at home in Spain as well as in Greece, Italy and France… One of the reasons for this change is the close relationship between Spain and Latin America. The Spaniards discuss more intense developments in Venezuela, Cuba, Bolivia and Argentina (rather "old-left policies"). The contrast to the developments in Brazil, Chile, Peru, Mexico, is the Spaniards much more aware. In short, Spain is mainly an open country that stands for free trade and not for the vain attempt to save the social state with protectionism, etc. The discussion of the Left in France, Italy and Greece is much more provincial. Ultimately, it comes out that capitalism/ globalization in general and the Germans in particular are to blame for everything. .... Because of the relationship with Latin America, Spain has great potential. Immigrants from Latin America with a variety of skills help companies in Spain. Spain has the euro, the country is interesting for investors from both Europe and Latin America. Besides English and Chinese, Spanish is one of the three world languages that will have relevance in the coming decades. Investors can give the advice: "Go Spain".


Generalization is dangerous and comparisons unfair. Circumstances in each and every one of the 27 member states of the EU are so distint that evaluating at a simple glance is the worst way of reaching conclusions. Germany isn't as well as it is said to be today nor is Spain so bad as they want the world to think. If there is one issue that is really bad, it's the lack of ethics of politicians here and almost everywhere else, that lack of professionality and ethics that is permitting corruption and influence trafficking to make the rich richer and the poor poorer. We are on the verge of a social revolt due to this single circumstance.

South American in reply to F R O Y

In France and Austria, a division of labor for your type of Keynesian argumentation
has been found: the public servants consume what the workers produce in the private sector. This explains that the salaries of public employees in Austria in the last 20 years has risen by 15% more than the salaries of workers in the private sector. The workers in the private sector can not have arbitrary salary increases because of the the price to performance ratio for goods purchases in the world market. For this reason, the public servants " sacrifice themselves" to consume the products of the private sector in order to stimulate the economy. A beautiful world of the old left.


The Economist writes: "And the number of self-employed workers is starting to rise even as unemployment increases", but it should have written instead "And the number of self-employed workers is starting to rise BECAUSE unemployment increases".

As people lose their jobs and fail to find new new ones, many have no recourse but to manage by themselves however they can. Not exactly funding innovative start-ups or multinational corporations. More like subsistence odd-jobs.

Things are going bad and can only go worse as the Spanish government insists in applying "reforms", which are nothing but the usual neoliberal recipes that kill the patient to cure the disease, but which this magazine so earnestly promotes. If you systematically reduce salaries and make it cheaper to fire workers, there will be less available income to keep consumption going, companies producing and tax collected. To expect otherwise is just the absurdity infamously known as voodoo economics.

nadamasqueso in reply to F R O Y

You are aware,I presume,that a lot of the autonomos are employees who have been told,basically,"make yourself self-employed if you want to keep your job" it costs less to employ you.But you are not "self" employed


In January 2012, critics of Spain's current government cried in outrage when it said that public-sector deficit had exceeded 8% of GDP in 2011. They were wrong. The final figure actually was 9%.

In March 2012, the same critics aired their despair at the government decision to raise the yearly public-sector deficit target from 4.4% to 5,8% of GDP. It was eventually agreed not at 5.8%, but actually at 6.3%.

In August 2012, the same critics then said a rescue of Spain was not a question of "if" but "when". Today's discussion forums on the topic are as empty as one of those rolling tumbleweed scenes of old Western movies.

In October 2012, the main credit-rating agencies were very publicly preparing the ground to withhold investment-grade ratings to Spain's debt. In the event, they didn't (thus proving wiser than when they kept Enron and AIG's AAA ratings all the way to their doom).

And here we are, in March 2013, reading a debate as to whether Spain is or isn't the next Germany...

nadamasqueso in reply to South American

The PSOE could not be more unmodernized-half or more of the party want Rubalcaba out can't but being Spain cannot decide on who should replace him;Chacon for!!!! Any election or campaign speech by Rubalcaba warns of the "dangers of the right" ie the PP are Franco.He is part of the problem not the solution

Ter Wecsel

Africa is the fastest growing region in the world. And they always say that it starts south of the Pyrenees. Must go well in Spain therefore

nadamasqueso in reply to Pointout

What exactly are you pointing out?
1,9% IS more than 8%
2,6.3% is higher than 4.4%
·,However you put it Spain as already been bailed out,partly if not fully.Even Aznar said it several years ago.


I think it takes more than just changing labor laws and cutting spending. To me, the fundamental variable is a country's culture. Is it a culture that continually demands ingenuity and hard work? Or one that places more value on family together time? One choice is not better than the other. But they are choices that people make collectively -- with different economic consequences.
Taiwan, for example, has a culture that practically demands studying hard and working hard. With 23 million on a tiny, resource-poor island, Its GDP per capita (PPP) is nevertheless higher than both Germany and Spain. And now, you also see China itself coming fast from behind -- right after throwing off communism (an unfortunate foreign import). But no one confuses the Chinese for living la dolce vita. We toil.
So, countries, choose your poison.



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