Only two or three nations are in a bind as bad as Spain’s. Greece is first among these. It has no parts of its economic engine that can pull it out of years of high unemployment, poor tax-collection methods, public graft and government overspending. Any hope that stimulus can be used to boost the economy has been lost as larger members of the European Union, the International Monetary Fund and European Central Bank have refused it.
Spain’s employment base is dominated by the tourism, auto manufacturing, pharmaceutical and oil and gas sectors. Tourism should remain strong, if it can keep its public transportation workers on the job. Auto manufacturing in Europe has become a terrible industry. The pharmaceutical sector is an unusually competitive one, which relies heavily on R&D capacity. It is not clear whether Spain’s drug companies have been plagued by the revenue problems that have overwhelmed much of the other economic sectors.
Rounding out the jobs trouble in Spain is the cratering of the real estate market, similar to others around the world, which has deeply wounded the construction and financial sectors. Spain does not have a central bank, nor can the federal government offer support to help these industries recover.
It is easy for Spain’s neighbors and the United States to shrug their shoulders and say that Spain’s problems can persist because it is a relatively small economy that gets to pay for its excesses year after year. Inside Spain, workers have no reason to hope that, without outside assistance, things will ever get better.
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