THE “Fat One”, Spain’s record-breaking El Gordo lottery, made it an especially cheery Christmas in Soria. The €2.1 billion ($3 billion) prize draw was worth an average of €2,500 for each of the city’s inhabitants. As a stimulus package, that beats the Spanish government’s by a factor of ten.
For the million Spanish families who saw a wage-earner lose their job in 2008, Christmas was a lot grimmer. The Spanish economy tends to exaggerate both the glories and the pain of its neighbours. When they grow, it grows faster; when they shrink, it is among the worst-hit. Over this decade it has created more jobs than any other country in Europe; now it is destroying them equally briskly.
The jobless rate is now 13%, over 3m, compared with a European average of 7%. Spain has as many unemployed as Germany, with a population 80% bigger. The future is scarier still: some forecasters talk of 16% unemployment, and Spain’s savings banks predict 18% (over 4m people) in 2010. The construction bust is adding extra victims to those of the credit crunch. And for the first time Spain faces recession with a big immigrant population, which has risen eightfold in a decade, to just over 5m.
José Luis Rodríguez Zapatero, the prime minister, has conceded that 2009 will be a “serious challenge”. But he added optimistically that “the Spanish economy is in a condition to recover employment because it is strong.” Recovery will start by the end of the year, he predicted. His optimism has not rubbed off on others, starting with the car workers. Just after Christmas, workers from General Motors took to the streets, following a trail blazed by those from Nissan and Renault. All three firms are going through the costly and time-consuming business of laying off workers. This red tape, says the governor of the Bank of Spain, Miguel Ángel Fernández Ordóñez, must go if Mr Zapatero wants fresh jobs.
Other much-needed measures to transform Spain’s economy, such as better education and more research, are either not happening or will come too late for this recession. Even trade unions are angry over the opportunities missed in a decade of rapid growth. “We were walking with feet of clay,” says Jesús Pérez, employment secretary of the General Workers Union.
So what is Mr Zapatero doing? He claims that a €33 billion public-works programme will lead to 25,000 new building projects by May. Spain’s low debt burden creates some room for manoeuvre. Yet even a recovery by December will be too late for a first wave of jobless who will by then be running out of their statutory unemployment benefit. Mr Zapatero has pledged to look after them, but that will cost money. The welfare system is less generous than most. Spaniards traditionally fall back on families for support, housing and jobs at times of crisis. But the family nowadays is weaker, smaller and sometimes led by single parents.
Caritas, a church-run charity, saw a 75% rise in requests for help during 2008. It is seeing two novelties in this recession: those needing help are often struggling to pay for their homes; and many are immigrants, who tend to be the first both to lose their jobs and to use up their welfare. Victor Renes, Caritas’s research chief, worries that racism may now raise its ugly head.
Mr Zapatero is offering immigrants lump-sum payments to go home. Yet some economists want immigrants, who form a go-anywhere, do-anything pool of workers that will be critical in a recovery, to stay. “They are more flexible than Spaniards,” says Pablo Vázquez, director of the Foundation of Applied Economics Studies. “We think immigrants are necessary and can help us overcome this crisis.”
For the million Spanish families who saw a wage-earner lose their job in 2008, Christmas was a lot grimmer. The Spanish economy tends to exaggerate both the glories and the pain of its neighbours. When they grow, it grows faster; when they shrink, it is among the worst-hit. Over this decade it has created more jobs than any other country in Europe; now it is destroying them equally briskly.
The jobless rate is now 13%, over 3m, compared with a European average of 7%. Spain has as many unemployed as Germany, with a population 80% bigger. The future is scarier still: some forecasters talk of 16% unemployment, and Spain’s savings banks predict 18% (over 4m people) in 2010. The construction bust is adding extra victims to those of the credit crunch. And for the first time Spain faces recession with a big immigrant population, which has risen eightfold in a decade, to just over 5m.
José Luis Rodríguez Zapatero, the prime minister, has conceded that 2009 will be a “serious challenge”. But he added optimistically that “the Spanish economy is in a condition to recover employment because it is strong.” Recovery will start by the end of the year, he predicted. His optimism has not rubbed off on others, starting with the car workers. Just after Christmas, workers from General Motors took to the streets, following a trail blazed by those from Nissan and Renault. All three firms are going through the costly and time-consuming business of laying off workers. This red tape, says the governor of the Bank of Spain, Miguel Ángel Fernández Ordóñez, must go if Mr Zapatero wants fresh jobs.
Other much-needed measures to transform Spain’s economy, such as better education and more research, are either not happening or will come too late for this recession. Even trade unions are angry over the opportunities missed in a decade of rapid growth. “We were walking with feet of clay,” says Jesús Pérez, employment secretary of the General Workers Union.
So what is Mr Zapatero doing? He claims that a €33 billion public-works programme will lead to 25,000 new building projects by May. Spain’s low debt burden creates some room for manoeuvre. Yet even a recovery by December will be too late for a first wave of jobless who will by then be running out of their statutory unemployment benefit. Mr Zapatero has pledged to look after them, but that will cost money. The welfare system is less generous than most. Spaniards traditionally fall back on families for support, housing and jobs at times of crisis. But the family nowadays is weaker, smaller and sometimes led by single parents.
Caritas, a church-run charity, saw a 75% rise in requests for help during 2008. It is seeing two novelties in this recession: those needing help are often struggling to pay for their homes; and many are immigrants, who tend to be the first both to lose their jobs and to use up their welfare. Victor Renes, Caritas’s research chief, worries that racism may now raise its ugly head.
Mr Zapatero is offering immigrants lump-sum payments to go home. Yet some economists want immigrants, who form a go-anywhere, do-anything pool of workers that will be critical in a recovery, to stay. “They are more flexible than Spaniards,” says Pablo Vázquez, director of the Foundation of Applied Economics Studies. “We think immigrants are necessary and can help us overcome this crisis.”
