There is a black cloud looming over Spain, sending down freak snowstorms and causing a sharp rise in unemployment. Some call it global warming, others the crisis, no matter the term, the situation here is just plain horrible. So bad in fact, that some economists and politicians are claiming Spain’s economy may be worse off than Greece’s. A statement so bold, it’s impossible to ignore the stormy economic climate any longer—even a bottle of Xibeca and a few shots of Ballantine’s won’t make it go away.
Years ago, Spain’s economy was on the rise, thanks to the country’s booming real estate market and healthy tourism industry. Attracting national and international investors, the property sector played a huge role in bringing unemployment down from 20% in the early 1990s to 7.6% in 2006.
When the real estate bubble burst in 2008, Spain saw the beginning of its troubles. In December 2009, the country’s unemployment rate hit a staggering 19.5%, while its fellow EU member, Greece’s reached 10.2%. In 2010, Spain’s rate continues to hover around 19% while Greece is predicted to reach just 10.7%, according to Nicolas Magginas, the head economist of the National Bank of Greece.
Although Spain’s debt is lower than Greece’s as a percentage of GDP, Spain’s high unemployment rate combined with the moribund real estate market means that the country will pull out of the economic crisis later than Greece. In the New York Times, New York University professor Nouriel Roubini daringly suggested “Spain is a bigger threat to the euro zone than Greece.” Why is this such a shocking proclamation? There are a couple of reasons.
Mainly, that in 2005, the World Bank declared Spain’s economy the eighth largest in the world, while Greece ranked much lower, at twenty-eighth. Although Greece was a superpower in ancient times, looking at the figures, it has seriously lagged behind Spain – except in maybe dominating the yogurt industry – which makes it even more incredible that Spain may now be worse off than Greece’s.
As troubling as this sounds, there is a glimmer of sunlight peeking out through the black clouds. George Clooney’s character in the film Up in the Air reassured the individuals he was hired to firethat losing their jobs offered them the opportunity to pursue their lifelong dreams. The crisis may still be hovering over us, but people are turning to their favorite hobbies and ingenuity to get by: starting up small, practical businesses and doing good through community service, all in an attempt to push that black cloud out of the way—hopefully this will push Spain once again past Greece in the ranking, here’s hoping.
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