There is a fair bit of people who considers the euro to have been planned to cause a crisis to driver deeper integration in the Euro zone.
Spain is grim BUT it's important to understand how big the black economy is here. A lot of the unemployment numbers are colored by people actually working on the side while putting the dole in their pockets.
Also GDP debt is not that bad and the government seems able to actually push through reforms in comparison to Italy or Greece.
I would prefer to see the percentage of people on the "ajuda" that is the only thing available after you loose the unemployment benefits.
Living here there is one massive obvious issue. The property prices have not dropped as massively as in the states. My theory is that the banks are not selling property as they don't have to mark to market. If they had to write the market value of all that property I figure the whole Spanish banking system would be bankrupt.
Spanish society isn't up in arms precisely because of the black economy, rendering unemployment indicators really ineffective.
I was in Spain in the early 2000s, and there was a huge Real Estate bubble. People came in droves into the country, illegal immigrants made 3000 euro per month (~5000 US$) tax free without any qualifications, and they couldn't come fast enough. Even then, when demand for workers was IMMENSE, official unemployment figures never came under 9%. That's pretty much the bottom over there.
Rajoy already introduced a less protective employment legislation and he will have to lower the barriers to make contracts further.
No doom and gloom. Hardship, yes. The biggest hurdles are already being taken upon in just about 100 days since the socialists left power:
- forcing banks to re-provision on their massive mortgage leverage. Basically, take the hit and admit that housing prices need to FALL big, and they will have to take a big hit.
- reform in sacred areas like education, healthcare and - most importantly - standard contracts.
Yeah, people always quote the unemployment rate but don't seem to get that there are a LOT of people working and collecting "paro" as unemployment insurance is called here. That said, if you are out of work and not working illegally, life is hard.
As for property prices, banks aren't lending either. What I see is that people aren't buying or selling; they are moving into old family homes (la casa del campo) and moving in together or back with their parents.
The real pain is how bad the situation is and how shameless the politicians are.
There are 5,27 million of unemployed in Spain. 3 million of them receive unemployment benefits of some sort which leaves 43% without any sort of benefits. The two million that do not receive anything at the moment could become 2.5 million by the end of the year.
Of the 3 million with unemployment benefits, 53% receive 426 euros (557 USD).
"There are 5,27 million of unemployed in Spain... which leaves 43% without any sort of benefits"
Sure, but how many of those people were unemployed before this mess? I live on the mainland, and honestly there are a lot of people "working", if you know what I mean. No benefits, no real job, but money comes in. The worst part is when they admit to it (or working illegally and collecting benefits) and laugh it off, then follow with "we know its wrong, its just the way we are". THEN they complain about the politicians? Who are... Just like them, but at a bigger scale?
Spain is grim BUT it's important to understand how big the black economy is here. A lot of the unemployment numbers are colored by people actually working on the side while putting the dole in their pockets.
Also GDP debt is not that bad and the government seems able to actually push through reforms in comparison to Italy or Greece.
I would prefer to see the percentage of people on the "ajuda" that is the only thing available after you loose the unemployment benefits.
Living here there is one massive obvious issue. The property prices have not dropped as massively as in the states. My theory is that the banks are not selling property as they don't have to mark to market. If they had to write the market value of all that property I figure the whole Spanish banking system would be bankrupt.