Editor’s note: This article was first published in October 2010, during Spain’s debt crisis. The VAT rise, pension cuts, public-sector hiring freeze, comparisons with Greece and the mention of “two years to the election” all reflect that moment; the general election was in fact brought forward to November 2011.
Many people agree that this country needs confidence. As long as investors and business owners have no confidence in the country’s economic recovery, there will be no improvement. I know that, and so does anyone who works in finance. And yet, just when you think you have heard everything that could possibly be said to undermine investor confidence, the unthinkable happens, and it happens in the most natural way.
You simply sit down to lunch after a tough negotiating meeting where the subject was the Spanish economy and the slim prospects of any short-term recovery, and in a minute of silence… you hear: “To get out of the current economic situation, people in Spain have to work more and earn less.” That is when you say what people usually shout in the bullring: “Olé, olé and olé.”
When words like that come from some of our leaders, and the other half of the leadership agrees with them, it is no wonder things are the way they are. SLAVERY was abolished in 90% of countries, and that is what is being proposed in this country.
Other, more “sensible” advice explains that the future of this nation lies in better university training. That makes more sense, except that we have the highest percentage of unemployed graduates.
We are groping in the dark with the measures being taken, and that is why our governments change their minds every Monday at 9 a.m.
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How can anyone have confidence in a country that supports the degradation of working conditions, not to mention the pension cuts? We are talking about a country where passing the public examinations to become a civil servant is now literally a dream, because at the moment official bodies are not even replacing staff on sick leave.
The worst customer a company can have at the moment is a town council, since councils have been responsible for a large share of business closures because of the massive debt they have saddled companies with.
Lower wages and higher taxes
This temporary measure, which may last up to 4 years (because this country is not going to recover any sooner), is ideal for exhausting the patience of the average citizen. For the first time in history, a taxpayer who is currently unemployed and receiving no benefits of any kind counts as a tax evader if he does not file his income tax return and the debt exceeds 100 euros. If paying the tax office means you cannot feed your child, so be it, but you have to pay if you at least want the child to have a roof over its head.
Raising VAT is a bad way to encourage consumption: another completely misguided measure. When I was a student, if I remember correctly, these were exactly the kind of measures you should never take to rescue a country’s economy.
Either the guidelines for economic rescue have changed a lot, or the situation is worse than we thought. Meanwhile, we all know that small businesses are on the verge of closing. And what does the state do? It sends them inspections every week in an attempt to raise funds, without noticing the lethal dose it is giving the small business owner.
Perhaps what they have in mind, and it would be a very coherent line of reasoning, is to reach the point where in two years we can compete with China and India on labour costs. That way the big factories would move to Spain and, why not, you could get a 70-hour working week for 420 euros. It is already happening, so I am not losing my marbles. Where are the inspections in those factories?
But all this is just padding. What really matters is that it does not all stay at home: our leaders take it abroad, selling pessimism about Spain. Yes, our own leaders. While our prime minister asks for confidence in our country, our opposition sells economic chaos, so foreign investment has just ground to a halt until people see what happens in the elections.
The elections are 2 years away, and in two years Spain could fall into an irreversible coma, so I sincerely believe nobody should play games like that with a nation.
And one more thing: this is no longer about left or right, about the PP or the PSOE. It is true that our prime minister, Zapatero, is really crowning himself with the measures he has taken, but the main opposition leader, Mariano Rajoy, is not doing anything to help either. Let’s be frank: he does not want Spain to solve the problem, because if it did, he would lose his chance of winning the elections.
Be that as it may, outside Spain we are already being compared with Greece, because we have taken the same measures that were taken there and, what is worse, the same measures that were taken in the Crash of 1929. You do not have to be a genius to know that every country that takes this kind of measure ends up in intensive care, but… confidence, folks, confidence.
Featured image: Roberto García from Spain, CC BY 2.0, via Wikimedia Commons.
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