20 ago 2013

Spain celebrates the end of the crisis - finally!

Spanish citizens begin once again to have energy
From barmen to bankers, from Madrid to Majorca, one cannot help but having noticed the lack of the usual upbeat optimism and cheer amongst the Spanish people in recent years. Except for success on the football field (we are very proud of winning 2 European Cups and 1 World Cup!) and our endless glorious sunshine, we have not had much to cheer about.

But after years of economic crisis, I have recently observed a change around, a new wave of refreshing optimism passing over Spain. There is a buzz and excitement in the air as the people sense a brighter future is just around the corner. 

Spanish citizens are actively looking for jobs
Just yesterday, I got into a taxi and when I asked the driver the typical "Qué tal?" his response was "Pues bien, realmente bien," a striking contrast to the usual rants about traffic, politics, lack of clients and the like. He went on to tell me that he had received more tips in the last month than in the previous year, that waiting times at taxi ranks were down and that every other person he picked up was on their way to or coming back from an interview.

The same upbeat feeling was shared by the owner of tapas bar I frequent for my morning "ración de tortilla". He said August is usually dead and it is barely worth him opening, but this summer he has had to take two new waiters and a part time cook to cover staff holidays. He expects to keep at least one of the waiters from September.

These impressions are backed up by economic figures, namely falling unemployment and lower risk premium on Spanish debt. Let's investigate more.

Falling Unemployment

Do you know that 300,000 Spaniards
returned to work in the last five months?
According to the Spanish Ministry of Employment, Spain's unemployment rate has now been falling for 5 consecutive months. The jobless rate is now 350,000 less than what it was in February 2013. And the new jobs have not been confined to specific sectors with growth being reported in construction, agriculture, manufacturing and services.

It would appear that controversial labour market reforms pursued by President Mariano Rajoy's Partido Popular (Populist Party) are making it easier and less expensive for companies to hire workers and beginning to bear fruits.

But can we finally say "adiós" to the worst financial crisis to have ever hit Spain? Government opponents are not convinced claiming that the decrease in employment could be due to seasonal trends as Spain enters the busy summer tourism period. What everybody does agree on is that unemployment is still too high, way too high and much more needs to be done.

Falling Risk Premium    

The business community regains its trust in Spain
One thing less debatable is that the massively unpopular austerity measures (tax hikes and reductions in public spending) are giving Spain credibility in the financial markets. Talk of Spain leaving (or being kicked out of) the Euro is a thing of the past as the risk premium on Spanish debt has fallen from 600 points in July 2012 to a more manageable 250 points (August 2013). This is great news for the country and Spaniards as it means the Government pays less interest on the money it borrows and in turn has created a feeling of stability and security amongst the business community.

The Future               

Perhaps it is too early to be claiming victory right now, but certainly the green shoots of a promising and sustained recovery are clear to see. The spring in our step is back and we certainly hope that Spain, dynamic and tenacious as ever, is about to put this recession behind it once and for all.

España, te quiero.  

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