Spain: example of good recovery & in-depth stagnation

Shortsightening vision Yes, is it not a contradiction, its just a political shortsighted view of Spanish economic sustainable development and an example of the risk of designing an economic forecast without observing the whole historic picture of the country. Spain is missing this picture by focusing their policies strategies on the management of crisis instead on the boost of a sustainable development.To get to this conclusion I have chosen some of the most remarkable indicators that highlight the failures on direction of the road financial map of the last years since the financial crisis boom in 2009.

  • Public Debt
  • External Debt
  • External Deficit
  • Investment in I+D
  • Unemployment
  • Young unemployment
  • Public spending GDP

By this chart  Evolution of Spain2009-2014 I´d like to exposure how the failure of basics indicators and lack of harmonization among them, lead to an unsustainable development despite the optimistic short term view of an acceptable recovery with a 2% growth rate. Let´s face the truth, Spain have taken 7 years to get out of the crisis, however the concept of recovery supposes an stage immediate after crisis for a few years, not a persistent process of stagnation.Recovery has been good and successful but now we must move forward and overcome the following persistent imbalances since 2009: 1.- an increase on external debt around 100% on a sustain basis, 2.- consequently an increase on public debt , 3.- maintaining almost the same public spending, as well as 4.- investment on I+D As a result, devastating increasing rates on:

  • Unemployment
  • Young unemployment
  • External deficit

In addition, the consequences of a long period of persistent high rates of unemployment generate cyclical + structural unemployment as the skills of the workers become obsolete and even in a recovery they´ll not match the requirements of a new reorganized labor market.Under this scenario is not appropriate to place the debate on growth rates recovery but on a complete change of economic-financial policies specially when is shown their negative impacts reflected on accurate data.This is not a matter of political economic approaches’ choices but of an incoherent financial perspective also contaminated by an important failure on good governance aspects.

*René Magritte: L´ homme au chapeau melon, 1964

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