I'm from Spain and this recession is really horrible :(:(:(. The problem here is the euro.
Spain and other South Europe contries simply cannot belong in the Eurozone. We have lower industrial productivity than Germany and North Europe, we cannot share the same monetary policy.
Take a look at the Spain's huge trade deficit and the German huge trade surplus. Spain needs a devaluation of its currency to correct this, but this is impossible with the euro, we cannot play the devaluation card anymore, and the correction is via salaries and unemployment.
And its not only the devaluation problem. In the past years, Spain needed high interest rates to avoid its construction boom, and Germany needed low interest rates to stop consumers from saving and get them to spend. Obviously Germany "won" and the euro interest rates were low (its logical to hurt 45 million people, to help 85 million people and not the opposite). If both economies weren't tied to the same monetary policy, they could both have done this easily and both economies would have been in much better shape to enter this recession (specially Spain).
Another bad thing is that the euro has raised consumer goods prices like food a lot (leveling them with the higher north european prices), but not the salaries (the salaries belongs productivity).
The only good thing is that the recession (and Brussels) is going to force our government (an extremely bad government, Zapatero is simply retarded) to do what must be done, a liberalization process in our economy (to improve our productivity). But i think it wont be enough because Zapatero is ultra-left, and our ultra-left syndical leaders still have a lot of power.
We need a Margaret Thatcher... :(:(:(
(Sorry for my poor english, but my english teacher says is good for me to participate in english forums, and i like it ;))
Spain and other South Europe contries simply cannot belong in the Eurozone. We have lower industrial productivity than Germany and North Europe, we cannot share the same monetary policy.
Take a look at the Spain's huge trade deficit and the German huge trade surplus. Spain needs a devaluation of its currency to correct this, but this is impossible with the euro, we cannot play the devaluation card anymore, and the correction is via salaries and unemployment.
And its not only the devaluation problem. In the past years, Spain needed high interest rates to avoid its construction boom, and Germany needed low interest rates to stop consumers from saving and get them to spend. Obviously Germany "won" and the euro interest rates were low (its logical to hurt 45 million people, to help 85 million people and not the opposite). If both economies weren't tied to the same monetary policy, they could both have done this easily and both economies would have been in much better shape to enter this recession (specially Spain).
Another bad thing is that the euro has raised consumer goods prices like food a lot (leveling them with the higher north european prices), but not the salaries (the salaries belongs productivity).
The only good thing is that the recession (and Brussels) is going to force our government (an extremely bad government, Zapatero is simply retarded) to do what must be done, a liberalization process in our economy (to improve our productivity). But i think it wont be enough because Zapatero is ultra-left, and our ultra-left syndical leaders still have a lot of power.
We need a Margaret Thatcher... :(:(:(
(Sorry for my poor english, but my english teacher says is good for me to participate in english forums, and i like it ;))
Comment