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By Hugo Dixon | Reuters Nov. 9, 2014
Spain's Problems Leave Parties at a Loss
Spain has been held up to other eurozone countries as an example of the benefits of structural reform. That is fair enough, up to a point. The conservative government’s bank rescues and labor overhauls have stabilized the financial system and improved competitiveness. The economy is expected to grow 1.2 percent this year and 1.7 percent next year, according to the European Commission.
But the country is troubled. The unemployment rate may be falling but it is expected to end next year at an eye-popping 23.5 percent. Corruption scandals embroiling politicians from all the traditional governing parties are coming out of the woodwork. And government debt is still climbing and expected to exceed 100 percent of gross domestic product next year. (..)
What the country really needs is a second wave of reforms. There should be another dose of labor reform, as those in permanent jobs still have excessive privileges with the result that most new jobs are short-term contracts. (Continua)
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2014-11-18
