According to The Economist’s Buttonwood, “desperate times require desperate measures”. I am sure this is right, times in Spain are certainly getting desperate and many of the measures being implemented in Brussels, far from being radical look much more like continually closing the door after the horse has bolted. The issue Buttonwood draws our attention to in the blog post accompanying this statement is that of migration trends within the euro area and the impact these have on trend GDP growth and structural budget deficits in the various member countries. This is an important issue indeed, since such movements seem to be an unforeseen and largely unmeasured by-product of the current … [Read more...] about Do EU migration trends put Spain’s health and pensions system at risk?
eu crisis
The great Portuguese hollowing out
As Portuguese President Aníbal Cavaco Silva once put it, "A country without children is a nation without a future." He was, of course, referring to his country’s ultra-low birth rate, which is just over 1.3 TFR and has been below replacement level (2.1 TFR) since the early 1980s. In 2012 only just over 90,000 children were born in the country, the lowest number in more than a century – you need to go back to the 19th century to find numbers like those we have been seeing since the crisis really took hold. But added to this longstanding, yet unaddressed, problem there is now another just as dangerous one. High unemployment levels and the lack of job opportunities are leading an increasing … [Read more...] about The great Portuguese hollowing out
2013: Another rough ride for Spain
Last year presented probably the toughest baptism of fire for any Spanish prime minister since the transition to democracy, but Mariano Rajoy knows that this year will be just as challenging. The big problems facing his government in the coming months are, for the most part, those that dominated 2012: the markets and a pending bailout; rising unemployment; lack of growth; social unrest; and Catalonia’s push for independence. The bailout presents perhaps the most vexing problem for Rajoy, because it demands decisiveness from a notoriously equivocal politician. Although Spain’s borrowing costs have dropped from their alarming levels last summer following Mario Draghi’s assurances … [Read more...] about 2013: Another rough ride for Spain
Rajoy must take reins swiftly to avoid economic chaos
Mariano Rajoy’s resounding election win has redrawn Spain’s political map and put his Popular Party (PP) firmly in control of the country after seven-and-a-half years of Socialist government. He could hardly face a more difficult task on being voted prime minister. In the days leading up to the election, Spain’s economy was being battered by the markets, with its bond prices close to those of beleaguered Italy. Italy hopes it has just overcome its own political upheaval; Spain’s situation is less clear-cut. Spanish law dictates a lengthy hiatus between a prime minister’s election win and his instatement. José Luis Rodríguez Zapatero’s successor as prime minister was not due to be sworn … [Read more...] about Rajoy must take reins swiftly to avoid economic chaos
How history will judge Zapatero
Jordi Sevilla, a former minister in the government of José Luis Rodríguez Zapatero, recalls how his then boss once told him about a massage he had enjoyed a few days after becoming prime minister. “The masseur was amazed at how little tension he had,” Sevilla said. “This guy had spent a week in La Moncloa (the prime minister’s residence) and that’s enough to leave anyone completely spent!” The anecdote, recounted to writer José García Abad, reflects a couple of popular, not entirely accurate, perceptions about Zapatero: that he is a detached, even cold politician, whose meteoric career has been driven purely by calculation; also that he is a featherweight who doesn’t understand the … [Read more...] about How history will judge Zapatero