Posts Tagged ‘Zapatero’

Step change in Spain

22/11/2011, 04:06:37 PM

by David Mathieson

Labour Uncut? Maybe, but our sister party in Spain, the PSOE has just been sliced, diced and stuck through the democratic mincer. The general election on Sunday put an end to the centre left government in Madrid. It gave the conservative Popular party an overall majority, a rare event in a country used to being governed by coalitions of one sort or another.

These results come on top of some disastrous regional election results for the PSOE earlier this year when voters handed the PP power in almost all of Spain’s powerful autonomous regions. 2011 is without doubt the PSOE’s annus horribilis and will rank amongst the troughs for a party which has had more than its share of bleak moments since it was founded well over a century ago.

For Spaniards and the Euro zone the key question is what happens next? But first a quick post mortem. The numbers were always against a PSOE victory. A rocketing deficit, near doubling of the national debt since the onset of the current crisis, five million unemployed, and eight years in power left the socialist government of Jose Luis Rodriguez Zapatero without much in the way of a narrative or alibi. And Zapatero played a poor hand poorly. Until early 2010 he appeared to be in a state of denial about the extent of the problems, insisting that the Spanish economy was fundamentally sound and “playing in the Champeon’s League”. (more…)

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Spain faces up to unpleasant economic realities, says David Mathieson

25/07/2010, 11:20:54 PM

The celebratory soccer binge over, Spaniards are once again having to face up to some unpleasant economic realities and along with the rest of Europe Spain has just published the results of a stress test on its banking system.   A report on financial services would not normally be the stuff of conversation in the bars of Madrid but most people are aware that the consequences could be serious.   Apprehension has again replaced euphoria.  For Prime Minister Zapatero the findings will have far reaching political consequences: confidence in his socialist (PSOE) Government is at a record low and the revealed weaknesses in parts of the Spanish financial system will not improve the national mood.  So far, Spain has avoided a Greek style meltdown but renewed trust in the Spanish banking system is essential if Madrid is not to become the new Athens.

Up to now debate on the crisis in Spain has focussed on the state of the public finances and the growing fiscal deficit – the difference between the Government’s income and spending – which is now around 11.5% of annual income.   Over the last couple of years unemployment has soared to 20% – the fastest increase in Europe – and nearly two million people have stopped contributing to the social security system.  Consumption and investment have slowed (trade between the UK and Spain, for example, fell by more than 30% last year) and Government revenues have collapsed. 


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