The Economist calls for more leadership from Zapatero inorder to overcome ‘inertia’ and ‘paranoia’
The Economist has published three articles criticising the Spanish government for its handling of the recession. Although it points out that Spain is not facing the same problems as Greece, The Economist says that Spain is the best example of the crisis and criticises the reaction of Zapatero’s government.
This is not the first time that The Economist has criticised Spain having already named it as the ‘sick man of Europe’ and doubting the abilities of Zapatero in his role as the president of the EU. Now it accuses the Spanish government of not foreseeing the recession and of reacting afterwards with ‘inertia’ and ‘paranoia’.
The first article entitled ‘The Zapping of Zapatero’ acknowledges that the Spanish economy is four times that of Greece, its debts are less than those of the US and it has not had to use public money to rescue its banking service.
However, it also points out that unemployment in Spain is 19.5%, which is the highest in the Eurozone, and that the budget deficit has shot up to 11.4% as well as the fact that the Spanish economy is still in recession. The Economist accuses Zapatero’s government of making things worse by not foreseeing the economic disaster and when it arrived by reacting with fear, confusion and by launching an austerity plan very abruptly and a ‘empty’ plan of action to reform the labour market only to withdraw it at the first signs of protest.
The second article called ‘Muddle obscures Message’ explains the weak position the government finds itself in and Zapatero’s fear that he might have to face a general strike. The first recommendation by the economist is that ‘you can’t keep the markets and the unions happy at the same time’.
In the third article entitled ‘So hard to bend’ analysts for The Economist believe that Spain is suffering from all the problems of one continent in one country: its consumers have very high debts, mostly in the form of mortgages, like the Irish, its workforce has low productivity like the Portuguese or the Greeks and lack training and education like the Italians. Furthermore it says that the lack of flexibility in the labour market is more exaggerated in Spain and it is here that The Economist places the blame for the high rate of unemployment.
The first article concludes by asking Zapatero for stronger leadership. It calls on the Spanish president not to put off structural decisions any longer and warns Spain that ‘delaying pain only increases it in the end’.