Sat Jul 29th, 2006 at 03:50:36 AM EST
Zapatero is here to stay. These are not my words but the words of the Economist article about Spain and PM Zapatero. It seems that The Economist may be right for a change. Frankly, it seems we have ZP "para rato". They argue that ZP has modernized the civil society (gay marriage) and kept a very good economist at the head of the important stuff- yeah if P. Solbes can convince me, Migeru and the Economist that he is good, it means that he is damned good. Of course, they go on to say, actually repeat P.Solbes warnings, the problems of the spanish economy are that too much of it is based on construction, too few high tech around and too much of a house bubble. It is becoming a mantra...but it is painfully true. Of course, they use the lack of competitivity and high tech to warn ZP that he should not improve too much the salaries (although he already agreed to reform the job market...but with employers and employees agreeing on it)
(...) Since the economists is behind subscription wall, I will try to justify it myself. Let me guide you to one day of typical news in Spain..today:
From the diaries (with small text edit) ~ whataboutbob
And here we must back to the question about Keynes we were having some days ago...Is it really bad to have people working the construction? Well NO... it is not, it is better than in war-related activities, isn'tit?. Frankly, as an environmentalist,construction is not a problem per se..it is that I would like them to construct railways and not houses close to the beach.
And what about the house bubble? Yes..it is a problem if people perceive there is a bubble. But no, it would not be a problem if the State will provide public housing for the low and middle-low classes. And on this last thing, ZP is failing...This...and on the transport sector (We have plenty of gas to make money with the Algerians, wind, nuclear and coal so no problem on the energy front, except for the transport of goods). But do not worry, we - the ET- will send him a report in September-October (when I have time) so that he takes care:)
Unfortuantely, nobody cares about the transport of goods right now (and probably until 2008-2009), leaving the high prices of housing for the middle class as the only source of potential high problem. And this is the reason why The Economist says that ZP is here to stay. Since the economists is behind subscription wall, I will try to justify it myself. Let me guide you to one day of typical news in Spain..today.
Let us gonna start with unemployment. Dramatic cut in the employment rate, reaching 8.5 % using the European methodology. Almost 100.000 less people looking for a job. Half men, half women. For men, it is 6.5 % (below the american rate if we take the Colman approach).
Is that all? Well, not really, inflation was kept at 4%, higher than the rest of Europe but just at the proper level if increases in the interests rates proceed.
And what about the regional struggles. Well, the National Comision of the Electricity, with the new powers granted to them by ZP, has put enormous hurdles to the adquisition of Endesa by EOn. If you do not know what I am talking about recall my diary here ,or here . According to La Vanguardia, the set of conditions is very very tough...but again,compeltely logical. E.On will not be able to eliminate or reorganize other societies which depend on Endesa. They were given to Endesa by the State long time ago for a reason, they are vital to Spanish energy system. You can not play with them to make you rich. But the really, really painful shot is that they will have to get rid of half of the nuclear power stations. Well, actually sell one power station and share the others. This is tough man!!! Endesa received huge amounts of money to compensate for the original losses of the nuclear. Now the nuclear stations are, well, super-mega-uber-profitable, money makers. And the conditions go on and on...every single thing related with national energy security is taking into account...and then a little bit more, just in case. I am sure that in Barcelona you can hear the screaming coming from Germany..and here in Tel-Aviv I can hear the laughs and hurrahs of the catalan Gas Natural.
Let's see what else. Oh , yes of course. Now Berlusconi can really go to prison..or something like that. I mean, judge B. Garzon has been allowed by the Constitutional Court (like the Supreme court int he US) to prosecute Berlsuconi. Nothing, Gondi, really nothing. A pleasure.
Something is missing? Yes, of course PSOE (ZP party) heads the opposition by 3.7 point according to the last poll. The same poll shows, surprisingly enough,that housing still does not bother too much Spaniards while unemployment is first on the list. Given the low level of unemployment, this data reflects the problem of ON and OFF jobs...people think they are without job, when they are not because basically they are ( I love this last sentence..how do I highlight it?). ZP can not wait enough for the reform in the job market. If it works, and the talks with ETA also work, we have ZP para mucho mucho mucho rato.