The sick man of Europe.

With a 20% unemployment rate Spain is rightly considered to be the sick man of Europe. Even Italy and Portugal do better at 11 and 12 percent. This high level in Spain is not new as it has hovered around that mark for over 5 years. Of course, some in Spain say that 20 percent is good news as it was as high as 25 percent two years ago. The fact that it has fallen is some good news, but not much.

True, it is more than probable that some of these people that are not working are in fact working but not being declared. Still, it is not an ideal situation and is fertile ground for all sorts of extremist groups who will propose pie-in-the-sky solutions or deflect blame on ethnic groups.

Among the other problems of Spain is that for the past six months it has been without a government. Odds are that once one can be cobbled together it can enact smart policies to reduce the joblessness. Or not. After all, there are vested interests who will prefer the status-quo to new policies that can adversely affect them. As well, much of the working-age population does not have an education beyond high school. Many of those people have not been rehired after the crisis of 2008 and will probably remain unemployable.

Spain is now at the crossroads; either a new government will pursue bolder policies such as cutting spending and freeing up labour markets or the various players that benefit from the actual system will resist as their interests are threatened by these changes. Inertia could work against any new government and the ones who would suffer would be the young; their unemployment rate is right now at 45 percent and unlikely to change anytime soon. Fertile grounds for the extremists.


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