Spain not Know How to Solve Your Economic Crisis

Spain does not know how to solve its economic crisis April 17, 2009 How will the Spanish economy out of the current crisis? Is the question that many of us do. But seriously, is this, the question formulated in the Spanish government. And this is not a personal opinion, as the Deputy Prime Minister Maria Teresa Fernandez de la Vega, acknowledged in an interview with "Europa Press?:" We believe we are on the right track, but nobody knows when, or get out of the crisis?. A few days ago, the Spanish government decided to renew his cabinet in an attempt to find a way out of the deep crisis that is facing the economy. So far, everything has been tried to mitigate the effects of the crisis has not achieved the expected success. Nor should expect changes in the cabinet are the solution to the economic crisis. No doubt that according to what is observed, Spain may not leave the current crisis by itself. The Spanish economy will have to draw from this situation the rest of the countries.

This means that it will overcome the crisis when the rest of the European economies (and the U.S. also, of course), begin to recover and create a "spillover effect? positive about the Spanish economy.

They are not, at this time, structural reforms under discussion to be performed in the Spanish economy to strengthen it and keep it so vulnerable to adverse situations like the present. What is at issue in Spain today is how to generate short-term impacts as soon as possible to recover the country's economic growth. The measures taken to stimulate the economy, appear to have any effect. Such is the deterioration of the Spanish economy for the first time, the same recorded in the March annual deflation rate of 0.1% (symptoms, among other things, that domestic demand is at its best) . While many Spanish families have welcomed the fall in prices in the economy that allowed a hit relief to their pockets, the persistence of deflationary context can significantly affect debtors be increased to pay its obligations in real terms jeopardizing their ability to pay. Produce a general increase in defaults, this will represent a further blow to the economy. How long can last recession in Spain? In relation to this issue, the Bank of Spain does not appear overly optimistic.

The latest Bank of Spain forecasts point to a contraction of GDP of 3% this year and 1% in 2010. The IMF is pessimistic about the outlook for the global economy as it believes that it would contract this year, between 0.5% and 1%, while the economic recovery would occur in 2010 if governments increase its interventions in the economy. Against this negative external environment, there are good prospects of recovery for the economy of Spain. With the recession installed in the Spanish economy, the labor market suffers from a particular way the crisis. The deterioration in the labor market is such that unemployment would have reached 17% of the EAP during the first quarter, according to information obtained from the last Bulletin Advance Afi-AGETT Labor Market. Regarding economic activity, it was learned yesterday that industrial production in Spain registered a 1.7% monthly contraction in February and 22% in annual terms (the largest contraction in industrial production in the economies of the eurozone) . Faced with a plummeting economy, logical reasoning is that the government of Jose Luis Rodriguez Zapatero should take extra efforts and launch new economic stimulus package.

But this is beyond the reach of the government of Zapatero. In an interview granted to the American newspaper, "The Wall Street Journal?, The general director of the Research Department of the Bank of Spain, José Luis Malo de Molina said yesterday that Spain has no more room to launch new economic stimulus measures . To make matters worse, Malo de Molina believes that if I did, they would have little effect on the economy. For this year, Spain's fiscal deficit could reach 10% of its GDP, making the fiscal front a new problem to be solved urgently. There is no doubt that the Spanish economy is in a vicious circle from which it is very hard to leave. With a government with few weapons to pull the economy out of crisis and a crisis that feeds on itself, how can you find a solution to this situation? For now, the answer is to seek the support and commitment of all sectors of the economy and get the government and opposition sit to talk to agree on ideas. Probably Spain needs a new social order to overcome the crisis.