tag:blogger.com,1999:blog-6399730406480392183.post1971932731107907566..comments2024-03-27T11:18:34.222-03:00Comments on Viable Opposition: Spain - Next on the Eurozone Debt Hit List?A Political Junkiehttp://www.blogger.com/profile/03342345936277964422noreply@blogger.comBlogger8125tag:blogger.com,1999:blog-6399730406480392183.post-40145499119081055612011-08-04T00:15:26.402-03:002011-08-04T00:15:26.402-03:00Spain has always had high unemployment. All the re...Spain has always had high unemployment. All the red tape and high costs to legally required employ somebody and once they're hired they are very expensive to fire even if business conditions deteriorate. So most people are employed on short term term contracts and when the economy started to slow these contracts were simply not renewed. This is why unemployment exploded in Spain, even though Spain's economy actually shrank less in GDP terms the first year of the crisis than other European countries. But while this may have saved many businesses from going bankrupt, it made it much more difficult for the country to recover because so many unemployed people spend a lot less money. The other problem is that Spain's property and building sector was became twice as big as normal during the boom years. When this stupid property and building boom imploded it left the countries domestic banks with massive amounts of bad loans. They are now unable to lend to good businesses and so domestic businesses are unable to get the credit they need to expand. Spain's international companies are not affected by this problem but of course domestic businesses make up the great majority of the economy.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6399730406480392183.post-14670128534019522412011-07-17T01:23:27.219-03:002011-07-17T01:23:27.219-03:00Well, the real issue in the case of Spain is the 1...Well, the real issue in the case of Spain is the 180% of GDP private debt ratio... how did a minnow like Spain get all these international companies all of a sudden?... easy, borrow cheaply from german grannies and invest it in (mostly) latin american privatizations... only now all that debt has to be paid at high rates and the only way will be for these companies to sell all these assets at distressed prices or go bust... but probably both...Marcelo Funes-Gallanzihttps://www.blogger.com/profile/16159095303880765527noreply@blogger.comtag:blogger.com,1999:blog-6399730406480392183.post-86629588841082156742011-07-16T23:10:05.745-03:002011-07-16T23:10:05.745-03:00"I'd say that the relationship between lo..."I'd say that the relationship between low corporate taxes and low unemployment is tenuous at best."<br />This is surely the case. Corporations, without exception, pay no where near the amount of tax they should. Its not surprising given how easy it is to buy politicians and how easier it is to convince a large part of the masses that the poor rich elites must be spared from paying their fair share.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6399730406480392183.post-85863538679547872992011-07-16T20:44:58.829-03:002011-07-16T20:44:58.829-03:00"I'd say that the relationship between lo..."I'd say that the relationship between low corporate taxes and low unemployment is tenuous at best."<br /><br />As per other commentators on here, I would disagree with that. There are too many other factors at play in Spain, mostly especially the overly bureaucratic and expensive business incorporation regulations and the inflexible employment rules. These were bad before but under ZP's socialists they're now a complete f**ing nightmare - which is why so many operate in the black economy.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6399730406480392183.post-78805112435084362522011-07-16T09:27:46.157-03:002011-07-16T09:27:46.157-03:00I agree with the previous comments, but there are ...I agree with the previous comments, but there are some factors that escape from them. The first one and very important the fact is that the unemployment in Spain is not so serious as in other countries for two reasons, the help of the family and the submerged economy. For it although as per statistics the unemployment is more of the double that any other developed economy his effects are not so serious, for example Andalusia is an underdeveloped region with high unemployment index from the beginning of the democracy and her bars and restaurants are full and the SUV abound. How it is possible it is an mystery , even for me.<br /> With regard to the bureaucracy of the XIXth century, awful education and the entire absence of ethics of the whole society I am also absolutely in agreement, although also it happens in other countries like Italy, for example, but the Spanish economy depends largely on the rest of Europe and, as it happened in the 60s, the development of France. Germany and other countries will pull the Spanish economy up, by means of tourism and exports to these increasing markets.<br /> Finally it is not necessary to forget that in the last decades some multinationals and Spanish banks have obtained a spectacular development, BBVA, Banco Santander, Telefónica, Repsol, etc, with most of his business out of Spain and that any commercial chains as El Corte Ingles are the first ones in importance of Europe and the third ones of the world.<br /> In short Spain and the Spanish economy will go out of these problems surely, but late with regard to France and Germany and it will keep on being one of the surest countries of the world for holidays or to live. Unfortunately in Spain everything is done by very much delay, as he says an Irish saying, "reinforcements of Spain late or never".cchttps://www.blogger.com/profile/02681912008489504832noreply@blogger.comtag:blogger.com,1999:blog-6399730406480392183.post-3627871986755272642011-07-15T10:15:27.541-03:002011-07-15T10:15:27.541-03:00Real unemployment in Spain is actually 28%. Accord...Real unemployment in Spain is actually 28%. According to the deceptive Spanish government, always more concerned with appearances than any empirical reality (I know, aren't they all etc ?)you are not unemployed unless you have already worked for a continuous period of 12 months, hence the schools and universities churn out hundreds of thousands of young people every year who are most definitely unemployed as they do not engage in any economic activity, yet are not included in the lying government statistics. My 28% comes from Hacienda's ( Spain's tax and revenue department )own statistics, somewhat more accurate.I also have had the exact same experience here in Spain as the previous commentator. Spain has a totally anti business environment, replete with a 19th century antiquated bureaucratic mindset, (giving a computer to a monkey will not make it more efficient),and the developed world's worst education system. Lowering corporation tax most certainly works when applied in conjunction with all the other relevant determiners including the level, or lack of, the 'work ethic' amongst the populace at large, political and personal corruption, social cohesion etc. Think Germany,Greece and Korea respectively and you clearly see the relevance.Then think of the Basque Country and Catalonia, the inability of Spaniards to put their Civil War behind them (that and not current realities determine how the majority vote) You cannot just use numerical data to analyse the economic potential of a country, and even less when said data is not exactly very precise.Don't forget the demographics either, along with Italy Spain has the world's most ageing population with all that entails ! Unchanged structurally Spain is as safe a bet as the Titanic at tea time !Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6399730406480392183.post-21432803768858708512011-07-14T13:28:34.421-03:002011-07-14T13:28:34.421-03:00I don't think there can be any link between lo...I don't think there can be any link between low tax and unemployment in Spain. Starting a new business is expensive and endlessly bureaucratic. Also, once you have employed someone it is impossible to fire them. I live in Spain and although I often have little ideas that I'd normally be prepared to hazard say £20k on - I know that I could easily spend that just on complying with the red tape, and god forbid, if I then wanted to close it down it would cost me another £20k. And I'd probably be chased for taxes on my losses for years.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6399730406480392183.post-85924987954644893792011-07-13T13:50:06.530-03:002011-07-13T13:50:06.530-03:00Are we seeing the death of the Euro?Are we seeing the death of the Euro?Anonymousnoreply@blogger.com