# Getting out of the Crisis



## mikeinmalaga (May 17, 2010)

Greece, Ireland, Portugal and maybe Spain. Countries in economic trouble because of the crisis. 
I did read somewhere that Spain had 'improved' its employment laws and that was having a positive effect on the economy. 
Does anyone know what the problems were before the change, and what improvements were made?


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## jojo (Sep 20, 2007)

I'm no political animal, but from what I can see is that Spain tends to turn a blind eye to its problems and talk up its successes! I know they increased their IVA last summer???? Electricity went up...... Not sure what else

Jo xxx


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## Alcalaina (Aug 6, 2010)

mikeinmalaga said:


> Greece, Ireland, Portugal and maybe Spain. Countries in economic trouble because of the crisis.
> I did read somewhere that Spain had 'improved' its employment laws and that was having a positive effect on the economy.
> Does anyone know what the problems were before the change, and what improvements were made?


I think you might be referring to the change in the redundancy terms? these were changed in the emplpyers´favour (i,e, making it cheaper to sack people) in an attempt to reduce the number of workers on temporary contracts.

There is also a plan to make it cheaper to hire young people who had never had a job, but I don´t know if this has come into effect yet.


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## mrypg9 (Apr 26, 2008)

mikeinmalaga said:


> Greece, Ireland, Portugal and maybe Spain. Countries in economic trouble because of the crisis.
> I did read somewhere that Spain had 'improved' its employment laws and that was having a positive effect on the economy.
> Does anyone know what the problems were before the change, and what improvements were made?


Spain's problem is one that to varying degrees is shared by all 'developed' economies, in that the elected government is at the mercy of uncertain market forces which render fiscal and social planning almost impossible. 
Some economists and political pundits would argue that the situation has been compounded by the entry into the eurozone which has made impossible the traditional rescue plan of beleagured economies: devaluation.
The continental and Anglo-Saxon models of capitalism are different in that the former precariously clings to the notion of a social market economy whereas the latter sees the market as the determining force in society. The current chaotic state of the world economy where calculated risk has been replaced by uncertainty has placed the Spanish and other governments in a pincer-like grip: take measures to deal with unemployment, which will inevitably involve some form of Keynsian public sector pump-priming and the markets will react by raising the cost of state borrowing, thus making this policy unsustainable.
The main plank in which the neo-con agenda works is through forced selling off of public assets, cuts in public expenditure and deregulation of the labour market.
This has been the aim of the IMF and its 'Structural Adjustment Policies' and has caused misery to millions throughout the world. Portugal, Ireland and Greece are now about to feel the force of this. It could be said though that like Spain, these states took advantage of low interest rates brought about by adoption of the euro to pursue profligate policies...that plus the encouragement of an unsustainable construction boom.
Zapatero made a few alterations to the Spanish labour laws: the rules relating to severance pay, pension age increases etc. These were met with an ineffectual general strike.
The so-called 'positive' effect on the Spanish economy is risible: a 0.7% increase in last-reported growth.
Spain shares a fundamental problem with the other peripheral EU states: where is growth to come from?
Construction booms are undesireable and won't be repeated; tourism shows a steady decline; northern European immgrants are not that prosperous and contrary to what some like to believe have no real impact on the economy as a whole; there is no tradition of investment in venture capital as opposed to speculation. Spain unlike say Germany gives no 'value-added' to its exports. 
The only way it can currently compete is on price: a race to the bottom, as is seen in the drastic price-slashing in the tourist industry.
We have, all of us, allowed our lives to be taken over by forces we cannot control.
We castigate, quite rightly, the greed and stupidity of the bankers. But when we talk of the need for investors to 'take a haircut' we forget that it is our pensions and investments they have gambled with. Every way you look at it we are losers.
We allowed ourselves to be taken in and seduced by the material gains enjoyed even by the poorest in those societies which adopted the neo-con model originated in Europe by Thatcher and continued by Blair.
We sacrificed social and economic stability and the future of our children and grandchildren for the sake of a few crumbs from the tables of the super-rich.
We traded our futures for a pair of Nike trainers, a shiny new car and a piso in Spain.
At last the Spanish people via the 15M movement are standing on their feet and demanding an end to this lunacy.
But unless this movement is Europe-wide nothing will come of it.


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## mikeinmalaga (May 17, 2010)

That is quite a mouthful, and while I agree with most of it, it doesn't offer us a plan to improve things in Spain. As Hercules said when he saw the Agean Stables, that is the past, whatever we need to do to clean things up starts from here. 
I have lived in Spain for 4 years and I have met quite a few hard working, honest and industrious Spanish people. In my view if Spain is to climb out of the crisis it will be achieved by being more competitive. That is the key to commercial success. 
As mrypg9 says, competition does not mean fighting on price. It means finding out what the customer wants and selling it at the right time in the right place, with better delivery and customer service. Think of the Japanese and German post war recovery.
But competitiveness is not part of the Spanish psyche. In my 4 years here I have struggled with Telefonica, the Town Hall and the Banks in their Ivory Towers. It is a long, tiresome job.
I could join the Spanish people: carry on complaining over my coffee or cana to my friends, but not actually do anything. Because 'that's the way things are.'
Good luck Spain, there is always manana.


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## jb44 (May 21, 2010)

What happens when Greece defaults – Telegraph Blogs

Put this in another post ,but relevant to this one too


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## Alcalaina (Aug 6, 2010)

mikeinmalaga said:


> That is quite a mouthful, and while I agree with most of it, it doesn't offer us a plan to improve things in Spain. As Hercules said when he saw the Agean Stables, that is the past, whatever we need to do to clean things up starts from here.
> I have lived in Spain for 4 years and I have met quite a few hard working, honest and industrious Spanish people. In my view if Spain is to climb out of the crisis it will be achieved by being more competitive. That is the key to commercial success.
> As mrypg9 says, competition does not mean fighting on price. It means finding out what the customer wants and selling it at the right time in the right place, with better delivery and customer service. Think of the Japanese and German post war recovery.
> But competitiveness is not part of the Spanish psyche. In my 4 years here I have struggled with Telefonica, the Town Hall and the Banks in their Ivory Towers. It is a long, tiresome job.
> ...


I quite like the idea that competitiveness is not part of the Spanish psyche. I have certainly noticed where I live that people are more concerned about quality of life and doing a good job than squeezing every last penny out of their customers.

But I'm not sure you can claim that Telefonica is not competitive. It is one of the most profitable companies on the planet! It used to be owned by the Spanish people of course; if only the last President hadn't sold it off ...


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## jojo (Sep 20, 2007)

Alcalaina said:


> I quite like the idea that competitiveness is not part of the Spanish psyche. I have certainly noticed where I live that people are more concerned about quality of life and doing a good job than squeezing every last penny out of their customers.
> 
> But I'm not sure you can claim that Telefonica is not competitive. It is one of the most profitable companies on the planet! It used to be owned by the Spanish people of course; if only the last President hadn't sold it off ...



I'm not sure about that. I think the Spanish in general are very competitive. They may not be "money grabbers" at all costs and may not be quite so driven by money. They do a good job cos they want to be better than their competitors- IMO their psyche is one of winning, just like most of the world. You only have to look at their football teams, sports, their driving (always have to be infront) and their risk taking..... 

As for telefonica, it has to compete in the world market, it has to be cutting edge and competitive, otherwise it would fail!

All that said, I've not really been following this thread and I'm not a political "whizz kid" so I'll not say too much more!!! (phew!!)

Jo xxx


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## Alcalaina (Aug 6, 2010)

jojo said:


> I'm not sure about that. I think the Spanish in general are very competitive. They may not be "money grabbers" at all costs and may not be quite so driven by money. They do a good job cos they want to be better than their competitors- IMO their psyche is one of winning, just like most of the world. You only have to look at their football teams, sports, their driving (always have to be infront) and their risk taking.....
> 
> As for telefonica, it has to compete in the world market, it has to be cutting edge and competitive, otherwise it would fail!
> 
> ...


Yes, I agree about the football etc but I think Mike was talking about competitiveness in the financial sense. If that's what makes Spain different from Germany, then I hope it stays that way.

But on the other hand Spain (or southern Spain, specifically) is very like Ireland used to be, before the Celtic Tiger bared its teeth. And the Irish haven't had to change their psyche, so anything is possible.


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