Full Employment is Key to Spanish Economy
December 8th, 2009
News this week of new laws to help Spanish companies reduce employment costs may seem like a backward step for full employment, but it’s a necessary one if Spain is ever again to be competitive in Europe.
At last, Zapatero’s government has conceded that they need to reform Spanish labour laws.
I doubt these changes will be implemented quickly, or that they’ll be universally welcomed, but I’m glad to see Spain taking these first tentative steps towards being competitive within Europe.
The main reason I look out for this kind of news article is that employment and the economy are inextricably linked. Full employment drives the economy upward while unemployment drives it down.
Right now, with close to 20% unemployment in Spain, its economy and the Spanish property market are suffering – because people without jobs don’t buy houses.
Personally, I believe that encouraging employers to hire again by revising the labour laws is the smartest thing Spain can do to revitalise its economy.
Spain is also planning to increase its VAT rate from 16% to 18% in summer next year. The bill has not yet been passed and, again, this will be met with some resistance.
In relation to ECB Will Exit Cautiously, I was surprised to read elsewhere that Spain has been given until 2013 to get its public deficit under the maximum allowable of 3%, while the UK has been given a year longer.
That says quite a lot about the state of the UK’s finances and, Edward Harrison makes a good case for how ineffective Quantative Easing really is.
Nick Snelling has some good advice in Spanish Property: How to Negotiate the Price.
Nick writes with great authority and clarity about the Spanish property market because he lives and works in Spain, and he’s a published author.
His new book, How to Move Safely to Spain is worth ten times its €12.75 cover price – and would make a great Christmas gift for anyone even remotely interested in moving here.
Finally, despite the expectation that repossessed or otherwise distressed properties in Spain would offer the public the best deals, the reality has proved to somewhat different.
We hinted at this last week in Spanish Banks Should be Better Estate Agents, but the truth is that they are not very good at it at all.
We’ve just closed an advertising campaign for CAM Bank for this very reason, but we believe that key-ready properties might offer a viable alternative.
These are mostly brand-new, fully legal properties that the developer is motivated to sell before the banks get their hands on them. You can find out more here.
Martin Dell, Kyero.com
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