Spain's Economy: Not Yet The New Germany
This article compares Spain to
yesteryear's Germany (that is, Germany approximately a decade ago), many saying
that it is in the same position Germany was in at the start of its miraculous
reforms. It has been stated that the head of Spain's government, Mariano Rajoy,
plans to do the same for his country.
Rajoy is determined to get out of
the recession. Labor costs are lower now, but that is only because productivity
is so high. Apparenty the number of self-employed workers is rising, even as
unemployment is increasing. A supporter of the action says that Spain is doing
many of the same things Germany was doing years ago, but it is under tougher
global conditions and a shorter time span. He projected that it could take two
to four years.
However, there are some very
apparent differences between Spain’s situation and Germany’s. Among others, Germany’s
education and training system is much more “job friendly,” and the recovery was
pushed along by tax cuts in Germany, but Spain has raised taxes.
Also, GDP growth has been
constricted in Spain. The government claims growth will rejuvenate later this
year or in 2014, but the recovery is off to a rocky beginning and many things
can influence it, including changes in the euro. Spain still has leaps and bounds
to go, but will they be able to do it? Is the government going about this the
right way with its policies? In my opinion, this is going to take much longer
than 2-4 years. As asked in the article, “...if Spain does grow again, will that be enough to create jobs and restore
confidence?”
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