Presentation on theme: "Spain 2010: The New European Problem? Ramon Tremosa-i-Balcells. Catalan MEP, ALDE Group Spain 2010: The Next European Problem? Ramon Tremosa-i-Balcells."— Presentation transcript:
Spain 2010: The New European Problem? Ramon Tremosa-i-Balcells. Catalan MEP, ALDE Group Spain 2010: The Next European Problem? Ramon Tremosa-i-Balcells. Catalan MEP, ALDE Group Ciudad Real airport: built in the middle of the Spanish “meseta” (in the middle of no where), has generated an enormous loss which has originated the intervention of Caja Castilla La Mancha by the Central Bank of Spain (€ 6.000 millions). This airport is the only Spanish airport with high speed train (AVE)… it is one of the best examples of the Spanish real state bubble.
Spanish real state crash: 2006-2009, 50% fall !!
Spanish retail sale crash: 2007-2009, 10% fall !!
Spanish industrial crash: 2007-2009, 35% fall !!
Spanish labour market crash: 2007-2009, from 8% to 19% unemployment rate !! Youth unemployment rate: 35% !!
Spanish increases in productivity = 0%, 1996-2006!! “We don’t need any reform in labour market” (president José Luís Rodriguez Zapatero; 2004-2008) “The crisis will be much more longer in Spain because Spanish government is not doing reforms” (Joaquín Almunia, Spanish & socialist commissioner European Parliament, 2009.09.15)
Forecast European Commission: 2010 = 20%, 2011 = 21% unemployment Spanish labour market, two social classes: young productive labour force with flexible contracts, old non-motivated labour force with inflexible contracts.
Golden parachute Spain banks, 2010: the mother of all carry trades Carry trade = banks take cheap loans at the ECB at 1%interest, without limit of quantity, and buy Spanish public debt at 3.5%-4% interest
Golden parachute Spain banks, 2010: the mother of all carry trades The ECB will finish extraordinary liquidity measures in 2010, in March
Spain 2008: the first current account deficit and trade deficit, in GDP %, of the developed world
Spain 2008: the second largest current account deficit in the world, after the US deficit in volume
Spain 2009: dramatically reduction of imports, which reflects the fall of consumption
Spain 2002-2009: private debt with the rest of the world (mainly banks) x 2
Since the socialist government (2004), external debt grows faster than the GDP