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by Migeru
Wed Apr 16th, 2008 at 06:14:22 AM EST
So the Spanish Parliament voted Zapatero PM for a second term on Friday, and he seems to have hit the ground running: the first policy news we have from his government is a public-works Keynesian stimulus to absorb the unemployment from the sagging housing sector. It doesn't get any better than that, or does it?
| Autopistas contra el parón - Público.es | | Highways against the slowdown - Público.es | Más inversión en infraestructuras para compensar el efecto del parón constructor de viviendas. Ésa es la solución propuesta por los constructores que el Gobierno ha asumido para tratar de amortiguar el efecto de la crisis inmobiliaria en la riqueza económica y en el empleo. El Ministerio de Fomento ha sacado a estudio informativo la ampliación de las autopistas Radial 3 hacia la Comunidad Valenciana y la Radial 5 hacia Extremadura, según fuentes del sector. Estos
Estas vías complementan el eje básico de comunicaciones norte-sur y este-oeste ya que van paralelas a la A-3 Madrid-Valencia y la A-5 Madrid-Badajoz. La fase de estudio informativo (para recibir alegaciones) es la previa al concurso, con lo que las constructoras y concesionarias adjudicatarias presentarán oferta en unos meses y podrían empezar las obras este mismo año, siempre que los trámites sean rápidos. | | More infrastructure investment to compensate the effect of the slowdown in home construction. That is the solution proposed by the developers that the Government has adopted to try to cushion the effect of the housing crisis on economic wealth [sic] and employment. The Ministry of Public Works has opened an information study for the expansion of the Radial 3 highway towards the Valencian Community and the Radial 5 towards Extremadura. These roads would be complementary to the basic North-South and East-West axes as they run parallel to the A-3 Madrid-Valencia and the A-5 Madrid-Badajoz. The consultation phase (to receive public comments) is previous to the public tender, so that the constructor and operator companies awarded the projects could present their offers in a few months and work could begin already this year, assuming the formalities are dealt with quickly. |
| A estas dos ampliaciones se unirá la autopista Radial 1, que irá paralela a la autovía A-1 Madrid-Burgos, conectada con Bilbao por autopista de peaje. Las constructoras y concesionarias tienen de plazo para presentar sus ofertas hasta el jueves, con lo que en pocos meses despegará la obra. | | These two expansions will join the Radial 1 highway, parallel to the A-1 Madrid-Burgos, connecting with Bilbao via toll roads. The constructors and operators have until Thursday to present their offers, so that in a few months works will take off. | | La R-1 es el proyecto más adelantado de Fomento ahora mismo, pero porque no consiguió adjudicarlo en la anterior legislatura. Para el ministerio, los casi 30 kilómetros del primer tramo de la R-1, que saldrán desde la circunvalación M-40 hasta el municipio de El Molar tienen un presupuesto 219 millones de euros. El jueves empezará la puja a la baja de las constructoras para llevarse el proyecto, el sistema habitual. ACS, FCC, Itínere, Cintra, OHL, y el consorcio formado por Abertis y Comsa son las constructoras que por el momento van a competir por la licitación de la R-1, según informa EP. Isolux Corsán y Accina aún estarían estudiando el pliego de las condiciones.Según algunos directivos de las concesionarias que pugnarán por la nueva autopista, "en el Gobierno son conscientes de la necesidad de impulsar la obra civil en este momento". Las infraestructuras pueden absorber una parte de los desempleados procedentes de la construcción de viviendas, aunque no a todos, porque, como explican los expertos, la obra civil emplea más maquinaria que la residencial. | | The R-1 is the Ministry's project in the most advanced stages at the moment, because it wasn't able to award it in the previous Parliamentary term. For the Ministry, the nearly 30 Km of the first leg of the R-1, which join the M-40 orbital with the municipality of El Molar have a budget of €219M. On Thursday the usual downward bidding process by the building companies to get the project will begin. For the moment ACS, FCC, Itínere, Cintra, OHL and the consortium formed by Abertis and Comsa are the biulders who are going to compete for the R-1, reports EP. Isolux Corsán and Accina would still be studying the conditions of the tender. According to some executives from the operator companies that will bid for the new highway, "in the Government they're aware of the need to boost civil works at this time". Infrastructures can absorb a part of the unemployment coming from home building but not all of them because, experts explain, civil works use more machinery than residential works. |
The first thing that comes to my attention is that the idea to tender for two more toll roads appears to have come from the construction companies themselves, and the Government has taken it up motivated by the need to pick up the employment slack. So that's not entirely good, is it? Is it corporate welfare or an active employment policy?
Other criticism that can be levied against this initiative is that toll roads price some users out, especially in this case since there are existing free parallel roads (the autovías) which, some people are pointing out, could do with some maintenance.
Other issues are that, with Peak Oil on the horizon, investing on roads in not exactly the best long-term policy. Maybe money should be spent on railroads or waterways instead? Or on improving the electrical grid, or building more wind farms or solar thermal power stations?
However, as an immediate stop-gap measure, which we're told could be deployed within the year this is probably the best that the government could do. The immortal Keynes said it best: When involuntary unemployment exists, the marginal disutility of labour is necessarily less than the marginal product. Indeed it may be much less. For a man who has been long unemployed some measure of labour, instead of involving disutility, may have a positive utility. If this is accepted, the above reasoning shows how 'wasteful' loan expenditure may nevertheless enrich the community on balance. Pyramid-building, earthquakes, even wars may serve to increase wealth, if the education of our statesmen on the principles of the classical economics stands in the way of anything better. It is curious how common sense, wriggling for an escape from absurd conclusions, has been apt to reach a preference for wholly 'wasteful' forms of loan expenditure rather than for partly wasteful forms, which, because they are not wholly wasteful, tend to be judged on strict 'business' principles. For example, unemployment relief financed by loans is more readily accepted than the fiinancing of improvements at a charge below the current rate of interest; whilst the form of digging holes in the ground known as gold-mining, which not only adds nothing whatever to the real wealth of the world but involved the disutility of labour, is the most acceptable of all solutions. So, hey, building three new roads is wasteful, but not actually wholly wasteful, so it's not all bad. Ancient Egypt was doubly fortunate, and doubtless owed to this its fabled wealth, in that it possessed two activities, namely pyramid-building as well as the search for the precious metals, the fruits of which, since they could not serve the needs of man by being consumed, did not stale with abundance. The Middle Ages built cathedrals and sang dirges. Two pyramids, two masses for the dead, are twice as good as one; but not so two railways from London to York. Thus we are so sensible, have schooled ourselves to so close a semblant of prudent financiers, taking careful thought before we add to the 'financial' burdens of posterity by building them houses to live in, that we have no such easy escape from the sufferings of unemployment. We have to accept them as inevitable results of applying to the conduct of the State the maxims which are best calculated to 'enrich' an individual by enabling him to pile up claims to enjoyment which he does not intend to exercise at any definite time. But, clearly, in Spain two roads from Madrid to Badajoz are twice as good as one, as long as one of the two roads is a toll road.
Update [2008-4-16 3:19:25 by Migeru]: As pointed out by kcurie in the comments, this is in addition to Zapatero's election pledge to spend €1.2 billion and loan a further €8 billion to improve the energy efficiency of the existing building stock in Spain (new buildings are already subject to strict energy efficiency standards put in place during his first term).
| Zapatero promete 1.000 millones de euros para la rehabilitación energética de edificios antiguos · ELPAÍS.com | | Zapatero promises €1 billion for the energy retrofitting of old buildings - ElPaís.com | | EFE 10/12/2007 | | EFE 10 December 2007 | | El jefe del Gobierno, José Luis Rodríguez Zapatero, ha anunciado un plan de rehabilitación energética de edificios ya construidos que contempla un aumento del 20% de las ayudas directas a los hogares para lograr que mejoren el ahorro y la eficiencia energética. Este 20% se traduciría en un paquete total de 1.000 millones de euros. Hace 15 días, el presidente anunció aunque no concreto un plan de incentivos para los hogares destinado a poner a España en la "primera línea" contra el cambio climático. | | The head of Government, José Luis Rodríguez Zapatero, has announced an energy rehabilitation plan for existing buildings including a 20% increase in direct aid to households to achieve improvements in energy savings and efficiency. This 20% would translate into a total package of €1 billion. A fortnight ago, the Prime Minister announced (but didn't make precise) an icentives plan for households destined to put Spain "on the front line" against climate change. | | ... | | ... | | Durante la clausura del Foro sobre calidad ambiental y progreso social del PSOE, cuyas conclusiones aprovechará el partido para elaborar su programa electoral, Zapatero ha anunciado también que una línea de crédito del ICO de 2.000 millones de euros anuales (8.000 en la legislatura) que permitirá a los hogares financiar la parte de la reforma que no quede cubierta con las ayudas directas. | | During the closing of the PSOE's Forum on envoronmental quality and social progress, whose conclusions will be used by the party to elaborate its electoral platform, Zapatero has also announced a €2 billion/year (€8bn over the next parliamentary term) credit line from the ICO (Official Credit Institute) which will allow households to finance the part of the reform which is not covered by direct aid | | Además, se dedicará un fondo de 200 millones de euros para financiar obras de sostenibilidad energética en edificios y escuelas públicas en ciudades de más de 50.000 habitantes, siguiendo el modelo de "ciudades responsables" del ex presidente de Estados Unidos Bill Clinton. | | In addition, a €200 million fund will be devoted to financing energy sustainability works on public buildings and schools in towns over 50,000 inhabitants, following the "responsible cities" model of the former US president Bill Clinton. | Apart from confirming his intention to go ahead with these plans, in the investiture debate last week he outlined a broad economic stimulus package including both fiscal measures and a strengthening of the social safety net.
| Noticias Ya.com: Zapatero anuncia medidas urgentes para hacer frente a la desaceleracion economica | | News Ya.com: Zapatero announces | | 08/04/2008 | | 08 April 2008 | | Zapatero anunció un conjunto de medidas para hacer frente a la desaceleración económica, con especial hincapié en el sector de la construcción, que el nuevo Ejecutivo aprobará la primera semana de su constitución. | | Zapatero announced a collection of measures to face the economic slowdown, with especial emphasis on the contruction sector, which the new Cabinet will approve during the first week after being constituted. | | ... | | ... | | Ante esta situación, avanzó las principales medidas que el nuevo Gobierno adoptará con carácter urgente, entre las que citó la deducción de 400 euros en el IRPF para pensionistas, asalariados y autónomos, una ayuda que calificó de "importante" y de un "impulso" para la economía, y el adelanto de las devoluciones del IVA a los empresarios, que les permitirá recuperar el impuesto soportado con más celeridad. | | Facing this situation [of poor economic prospects], he anticipated the new measures to be adopted urgently by the Government, among them a €400 income tax deduction for pensioners, wage earners and self-employed, an aid that he described as "important" and a "stimulus" for the economy, as well as an advance of VAT refunds to entrepreneurs, which will allow then to recover the tax burden more quickly. | | ... | | ... | | Asimismo, se ampliará el aval público para los bonos de titulización que tengan como subyacente créditos para adquisición de viviendas de protección oficial, se pondrá en marcha un plan especial de recolocación de parados en el sector de la construcción y un refuerzo de la cobertura de desempleo para trabajadores en situación de mayor necesidad y se facilitará la ampliación del plazo de la hipoteca sin coste para las familias con especial dificultad. | | In addition, the public collateralization of securitised bonds will be expanded to include those whose underlying are loans for the purchase of social housing, a special plan for the re-employment of unemployed workers from the construction sector will be started, aas well as a reinforcement of [welfare] coverage for those workers in greater need, and the term of cost-free mortgages will be expanded for those families in especial hardship. | In my opinion, one could do much worse than this.
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