Home > Uncategorized > Country on the verge of an economic breakdown

Country on the verge of an economic breakdown

from David Ruccio

Spain wages and total employees

According to those in charge, Spaniards should have been thrilled. After years of stagnation, the country has in fact been growing.

For example, earlier this year, IMF Chief Economist Olivier Blanchard admired the country’s “virtuous cycle”of confidence, investment, and consumption. For his part, German Finance Minister Wolfgang Schäuble applauded Spain’s “far-reaching reforms” as the reason for one of the highest growth rates in Europe. Meanwhile, the government of Prime Minister Mariano Rajoy was preening: “The contrast in growth is the result of this government’s economic policies. Spain is now a role model,” Economy Minister Luis de Guindos said in April.

Yet, Pedro Almodóvar’s country is actually on the verge of an economic breakdown—which is why the two ruling parties lost so badly in yesterday’s election.

Just as in the United States, the economic recovery in Spain has been fundamentally lopsided, with a tiny minority at the top benefiting from government-imposed austerity policies and everyone else falling further and further behind.

As Tyler Durden recently explained,

Amid all the singing and dancing over Spain’s miraculous recovery and Europe’s renaissance on the back of Draghi’s money-printing machine, it appears – just like in America – that below the glossy veneer of engineered equity and bond prices, all is not well. . .the average wage in Spain has fallen to its lowest level since 2007, according to figures released by the Spanish Ministry of Finance, and after peaking at 19.3 million in 2009, the number of workers is also collapsing. . .

The ministry says the fall was not so much due to salaries being lowered for people at work, but that newly created jobs now offer much lower pay than before the crisis.

However, the crisis has no effect on Spain’s biggest earners as those who earn 10 times the minimum wage saw their salaries continue to grow. The 127,706 people fell in this category earn an average of 148,824 euros in 2014.

The reason for those declining wages and employment is, of course, that unemployment rates—for all workers (25.1 percent, as a three-year average) and, especially, for young workers (53.2 percent, even higher than in Greece)—still remain extremely high.




For years now, the country governed by, first, the Socialist Party and, then, the Popular Party, has been on the verge of an economic breakdown.

And, yesterday, Spaniards responded that the two ruling parties and their European supporters had their chance and squandered it. There was still time last year, earlier this year, even in recent months. “But now it’s too late.”

  1. December 24, 2015 at 4:56 am

    A ticking time bomb

  2. December 24, 2015 at 6:46 pm

    Why do they not see the “fatal flaw”.
    All the money that is issued by the Central Bank is taxed, they call it interest.
    This tax is then distributed as an entitlement to the bank owners: the top 10% ers ,
    unless of course you can name the one or two that own bank equity that are in the lower tiers.
    Even this year the USA is going to pay over $600 trillion as an entitlement (this tax called interest-debt service) to the top 10%. A TAX levied upon our own money.
    Do not cut SS , or Medicare entitlements to balance the budget…A simple ZIRP will cut $600 trillion with a keyboard stroke.

    • December 25, 2015 at 10:42 pm

      Correction- $600 billion..not trillion.
      As noted in another comment:
      Please Prof Wray, not for my sake, but for the sake of mankind give more than 60 seconds to your magnificent contribution to… agreed to come on to say that they can achieve everything they want through ZIRP !
      Perhaps, maybe the first step to reduce the gaps of inequality, increase jobs, Income, life style .
      What a powerful voice to proclaim “that ZIRP can do this, damn it could even fund a JG program.
      The top ten percent will not allow that to happen.
      The top ten percent will not allow the loss of this $600 billion (just in 2015 alone) ENTITLEMENT.
      Yes, Prof. Wray, $600 billion (greater than SS ?) is being paid to China, Japan and other owners (you can bet NONE of which are in the bottom 42% in poverty) just this year alone. Perhaps over $10 trillion in the last 30 years. Money distributed to the top 10%, who probably save 20% and use the remainder of 80% to invest among themselves to see who will gain a position in the top 1%.
      namely Federal money while deposited in the bank—-suspends its debt liability of redemption at no cost until it is used.

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