How’s Spain Doing?

Thoughts on the Spanish Economy

Thoughts on the Spanish Economy

We’ve heard the numbers, 24% unemployment, 50% unemployment for those under 30, and people losing their jobs, benefits and homes everyday in Spain. But what’s it like to live in this economy? Guest writer Peter Lavelle gives us his perspective from Madrid.

By Peter Lavelle

How’s Spain doing in the crisis?

Well, I think it’s fair to say there are lots of different versions of the country in existence at the minute, and they’re not that easy to reconcile.

For instance, you might log onto Google, and enter the words ‘Spanish bailout.’

Were you to do so, you would read that the Madrid government sold €4.5bn in debt at its lowest yield since April today, at just 5.458%.

This reflects the fact that the financial markets still expect Spain to request a bailout. Yet it’s nonetheless good news. It means Spain can breathe more easily, you might think.

Or, you might try another search, and enter ‘Spanish economy’ into Google.

Here, you would come across a Reuters article entitled ‘Spain’s regional crisis hits homes and families.’ This reveals the fact that Spain’s public workers are going unpaid, because the ‘ayuntamientos’, or town halls, are unable to pay their bills.

The article speaks of one woman, Inma Martinez, who in spite of the fact that she’s come in daily to perform her job cleaning the bus station at La Linea de la Concepcion, hasn’t been paid in eight months.

Or you might take a walk, if you happen to live in Madrid as I do. And what would you find?

The cleaners appearing like clockwork each Sunday to sweep up the rubbish. Terraces full of people, especially at Montaditos, which offers a ‘cerveza’ for just €1 each Wednesday.

Sure, you might see the occasional raggedy person searching the bins for food. But on the whole, life goes on as normal.

So it’s hard to say how Spain’s doing. You read about things like bond yields, and it doesn’t seem to have the least bearing on daily life.

When bond yields were at 7.5% back in July, and everyone was talking about a euro collapse, I was getting up at 7.00, working eight hours, and learning Spanish in the evenings. Now they’re at 5.4%, it’s apparently better for Spain, but I’m still doing the same things.

Yet equally, do the experiences of people like Inma Martinez seem any more real? I can read about them, of course, and I can empathise, but it’s a different world from mine.

The closest I can relate is the fact that one of my housemates is a philosophy teacher at a public school, and has just signed-up for jobless benefits. He’s also organised several protests against the cuts.

So how’s Spain doing?

Well, I could recite some statistics about unemployment rates and bad mortgages rates, and I can read about the unfortunate experiences of people I’ve never met.

But mostly, life in Spain is still good. Even with the current crisis, it’s an open, relaxed and enjoyable place to be.

About The Author-Peter is an economist at foreign exchange specialist Pure FX. He moved to Madrid at the start of 2012 to learn Spanish. He also writes at Culture Spain.

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5 Comments

  1. Simon Davey
    Posted November 8, 2012 at 3:33 am | Permalink

    I’ve been in Madrid for 6 months and on the whole I agree with the above observations BUT my experiences have been slightly different.

    I still drive a British registered car and have suffered an attempted (but failed) robbery on the motorway by fake Police and have been spat at by an erratic young driver. Our house in Moraleja has been burgled but this can, and does, happen in many cities.

    I find the telephone system poor, the road systems very badly designed, driving standards dangerous, I see very little history or culture in Madrid and most buildings are new. I see money poured into nice pavements, concrete fly overs, fantastic hospitals and T4.

    But its doing ok considering the financial headlines. I’m just glad I wont be here for the long term.

  2. Ellie Morris
    Posted November 8, 2012 at 4:07 am | Permalink

    Spain is certainly not an ‘open, relaxed and enjoyable place to be’ at the moment.

    It is true that there are many upper-middle class families that can continue to spend and live life comfortably. I work for such a family in Madrid and many other girls do. We’re paid and we are provided with a roof over our heads and food – this says a lot in a time of austerity.

    Yet these people represent a small minority. Spanish people (especially younger people) look at me with bewilderment when I tell them I have come to Spain out of choice, asking me why I’m here when there is little to no opportunity here.

    You may need to walk down the streets of Madrid again as it is not just the ‘occasional raggedy person searching the bins for food’. The homeless and the disabled line the streets with cardboard signs begging for money, prostitutes wearing scarcely anything roam the streets during the night when temperatures are hitting 3°C, there are weekly protests outside public sector buildings because people aren’t getting paid. There is a heavy feeling of desperation in the air, tainted by the anger at the political classes who just don’t give a damn. There is a readiness for mobilisation and solidarity here that I can’t find in England – and this is across society, not just the ideal, lefty youth I’m talking about.

    Life in Spain is good if you can afford to make ends meet.

  3. admin
    Posted November 8, 2012 at 4:34 am | Permalink

    I’d agree with you Ellie about my part of Spain, Barcelona, having that feeling of desperation in the air. It’s here. Part of the creativity and eagerness of the city has been oppressed because of this desperation, making Barcelona a less inviting city to live in than it was when I came here 7 years back. And it’s still cool. But…One positive that has come from all this is that rent has come down a lot. Then again, that is only positive if you have cash to pay your rent.

    Thanks for your comment.

  4. admin
    Posted November 8, 2012 at 4:35 am | Permalink

    Wow! I’d like to hear more about the attempted robbery by fake police! Haven’t heard that one before.

  5. Simon Davey
    Posted November 8, 2012 at 6:24 am | Permalink

    re Highway robbery, take a look at this :

    http://www.telegraph.co.uk/news/worldnews/europe/spain/9432185/British-holidaymakers-in-Spain-warned-about-highway-pirates.html

    and from the British Embassy :

    http://ukinspain.fco.gov.uk/en/news/?view=News&id=791658582

    My instance was on the motorway near Plaza Norte

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