Editor’s note: This article was first published in January 2013, as an opinion piece written on 3 January 2013 about Spain’s economic crisis. The government forecasts for 2013, the risk of 6 million unemployed, the US fiscal cliff talks and the IBEX 35 fall from 8,700 to 5,900 points in 2012 all refer to that moment.
It looks as if the die is already cast for 2013 in Europe, and in Spain in particular, where the government is asking people for one last effort over the next three quarters. We will supposedly see an improvement in the fourth quarter of 2013. In fact, Economy Minister Luis de Guindos is optimistic and says Spain will be creating jobs by the end of the year.
If we look at the situation, there are some positive figures. Not that they make us think the economy is improving; it’s simply getting worse at a slower pace. In other words, we have turned the less negative figures into positive ones. For example, one good figure is that jobs are now being destroyed more slowly. But are we creating jobs? No, but more people lost their jobs last year than this year. And will we reach 6 million unemployed? Probably, but not all at once; little by little, month by month. So where’s the good news? The good news is that the crisis is slowing down. And what does that mean? That the crisis is ending? Not at all! But since people have got used to it, they’ll notice it less.
The United States has started to sort out its “fiscal cliff”, and in Europe the markets jumped for joy. Yesterday someone asked me why the stock market was rising so strongly, and for a moment I wanted to think it was down to the day itself. On the first trading day of 2012 the markets also shot up, but once Christmas was over, over the course of the year we went from 8,700 points to 5,900. That doesn’t mean the same has to happen again, if only because markets can’t fall forever.
Still, I hope that joy isn’t due to an agreement on the American fiscal cliff, because we will have to deal with our own fiscal or economic abyss, cliff and ravine.
The eurozone will keep contracting, as The New York Times reported, although at a slower pace.
As for the expectations of job creation, I honestly don’t know how anyone can say we will create jobs this year. You only have to turn on the TV to hear about 300 people affected by a collective layoff (an ERE, in Spain) here, another 200 there, 5,000 bank employees over here and another 2,000 over there, and insolvency proceedings from north to south and east to west across Spain. Logic says jobs won’t be created; they will keep being destroyed (more slowly, let’s hope).
But at least they’re looking after our wallets, since we started the year with price rises in electricity, telephone services and transport. Given the already sharp loss of purchasing power, these increases, like the other VAT and tax rises, don’t help at all. But… apparently they are necessary.
Can we get out of the crisis without the construction sector?
That’s the real problem: we have to fill the hole in GDP left by construction, and Spain doesn’t exactly shine for revenue from technology companies the size of Apple or Google. And for some reason, we’re not interested in renewables either.
The only good prospect I see is the international expansion of our big companies, which are making room for themselves all over the world and will be perfectly positioned when the crisis ends. That’s good news for listed companies and very bad news for Spaniards, because the business is mostly outside Spain.
Why am I criticizing this?
I know the barrage of negative economic news and figures does nothing for people. Citizens need some positivity and hope, and that’s what the TV psychics offer at 3 in the morning.
I sincerely believe it is far more harmful to deceive people and ask them to hope the situation will improve soon, to make an effort this year, to turn to charity to feed their children, and that by the end of the year things will get better. That won’t happen, and this year will be a very heated one on the streets, with demonstrations practically every day.
People need to recognize the problem and face it head on. Once you know we are not all going to get out of the crisis together (as a whole), it’s a matter of finding a way out on your own. Starting a business won’t be easy, since the promised support for entrepreneurs isn’t materializing either, but at least it isn’t impossible, and anyone has a chance of starting a small business to get by.
“The price of doing nothing will be higher than what we might pay for not taking risks.”
P.S. I’ve never liked talking about politics, but I see what I see and I don’t like it. I don’t know who on earth they’re governing for. Personally, they’re not benefiting me as an entrepreneur or as a retail investor. They’re not benefiting pensioners, civil servants, workers, the sick or people with disabilities. Unemployment isn’t improving, there’s no real way out of the crisis in sight in the short term, and on top of that we can see all public revenue ending up in the same place.
I’d be outraged if I weren’t so furious. And the curious thing is that while the bad figures keep coming, only at a slower pace, I’m getting more and more worried, and at a faster pace.
Featured image: Javier Perez Montes, CC BY-SA 4.0, via Wikimedia Commons.
