Wry & Dry

The pain in Spain

When one thinks of European countries with a bit of a crisis, the usual suspects come to mind: Greece and Italy.  France's suffocating bureaucracy and labor laws are also not far behind.

But W&D wishes readers to consider Spain, that delightful but divided country in the bottom left hand corner of Europe.

Spain has been without a government for over eight months.  Good grief!

Well, actually, maybe that's okay.  Unemployment is now down to 20%, from 27% three years ago.  

Spain

The harsh days of high unemployment are not yet over for Spain.

And the economy is now growing at over 3% p.a, after contracting by about 9% between 2009 and 2013.  

But there is a long way to go: the budget deficit is about 4% of GDP and government debt is about 100% of GDP.

Tourism is booming, with terrorism in Turkey, Tunisia and Egypt surrendering holiday-makers to Spain.

Credit for hauling Spain out of recession and repairing the banking system must go to the conservative and austere government of Mariano Rajoy.  But with much of the heavy lifting done, the Spaniard may be looking for a different approach.  Last December's election created a deadlock, which negotiations have failed to resolve.

The Spanish parliament is now an image of Italian-style parliamentary fragmentation, but without the Italians to manage it.

Wednesday's rejection of negotiations with the acting Prime Minister (Rajoy) by the main opposition party, the Socialists, will probably force the third national election in eight months.  The trouble was that Rajoy is hated by the Socialists and Rajoy hates the leader of the Socialists, Mr Sanchez. 

The only issue upon which the two leaders seem to agree is keeping Spain together.  Separatist politicians in Catalonia are still demanding independence, but now more noisily. 

Ciudadanos, Spain’s fourth-largest party, is a possible lifeline for the interim government, if only to pass the budget.

W&D hopes that some sense will come to the parties.  So that he can have a siesta.