FOCUS ON FINANCE
THE EURO ZONE
January 13th to 19th 2017 ed., p.16
De Guindos, by the way, is also very upbeat about the Spanish government’s
ability to raise the extra five billion euros or so needed to keep the accountants
in Brussels happy: he says it will mainly be raised by blocking corporate tax loopholes
that were put in place to enable businesses to recover from the recession. For its
part, the EU remains justifiably sceptical of Spain’s ability to make the grade in
this respect: every single year it has been in office, Rajoy’s Popular Party has
failed to meet Brussels’ deficit-
Labour minister Fátima Báñez has also being spreading a positive
new year message, declaring last week that 2017 will be a “year of hope and of confidence”.
She wields the statistic that, of more than 3.5 million jobs lost in Spain during
the recession, 1.7 have been recovered. Any kind of reparation of the enormous economic
damage represented by that figure is better than nothing; the problem is, though,
that not enough of those new 1.7 jobs are permanent, stable positions. Permanence
and stability are currently in short supply in the Spanish labour market (as I wrote
here last week, as well) -
ver the optimist, Spain’s economy and industry minister has recently been
hinting that the country’s economic growth might exceed the predicted 3.2% for last year. That figure, it should be remembered, was already pretty positive: it’s about twice the eurozone average and applied to a year in which Spaniards spent ten months without a properly functioning government. Yet Luis de Guindos told radio station Cadena Ser on January 1st that “the estimate we’re handling is that growth may have been higher in 2016 than in 2015”. Growth in 2015 was 3.2% as well, but then 2015 was relatively stable.
If it seems surprising that Spain might post a similar -
Now the politicians are back, this year’s growth is actually expected to be less than 2016’s. The official prediction is for GDP expansion of 2.5% in 2017: this downgraded estimate reflects the risks posed by Brexit, a potential decrease in consumer spending and the fact that Spain is supposed to prioritise meeting EU budgetary goals to avoid sanctions from Brussels. The latter will involve a politically toxic combination of tax hikes and spending cuts that are currently being cooked up behind the closed doors of government.
M a r k N a y l e r