See below some phrases I have found in the edition of 11th of June:
Article: The non-nuclear options
- "SPAIN may soon be faced with two options, says UPF’s Mr Mas-Colell: a permanent slump or economic reform."
- "In the Mediterranean economies the pressure on wages is mostly in the wrong direction."
- "Jobs that were created in good times are now being shed quickly. The downturn has highlighted the gross unfairness of the dual labour market. It puts the burden of adjustment on groups with no tenure (women, immigrants and the young). Protected workers, the bulk of the workforce, cling to their jobs. That tends to fossilise the structure of the economy. Old industries, where productivity is waning, are slow to die and new firms slow to start up."
Article: One size fits none
- The country is enduring a painful housing bust that has led to a collapse in the construction industry, doubling the unemployment rate to 18.1% in little more than a year. Recovery seems a distant prospect [...]. If left unchecked, higher costs will make it hard for exporters to compete with firms from other euro-zone countries, which account for most of Spain’s foreign trade.
- Locked into the single currency, Spain can no longer regain its lost competitiveness by cutting its exchange rate. Mr Galí frets that this may condemn the country to a protracted slump. “The discipline of living without devaluation is tough,” he says. “It’s like enrolling your child in a demanding school. Results may improve, but there’s also a risk the child will rebel and fail if you push too hard.”
- Defiance will be all the greater after a long period of relative ease.
- Pay rises ran well ahead of efficiency gains [...].
- A steady accumulation of current-account deficits has left Greece, Portugal and Spain with net foreign debts of 80-100% of their GDP. These frailties are a threat to the stability of the euro area as a whole.
- In its absolute size, Spain’s deficit was second only to America’s [in 2007].
- Spain’s unemployment rate is already the highest in the euro area and likely to rise further.
- Spain has one of the most rigid job markets in the developed world. Many jobs are heavily protected and wages are set centrally. That will make adjustment all the more difficult.
- The fear is that Spain will stagnate even as other economies start to revive. “My nightmare is that the world economy, including Europe, recovers and Spain does not manage to hook up to that,” says Andreu Mas-Colell, another economist at UPF. “That would be a disaster. It would strain the link between Spain and the rest of the EU. We will also have to deal with tighter monetary policy if the rest of the euro area picks up, creating more pressure.”
- That fear of being left behind is widely shared in other countries too. Some economists believe that countries now stuck in a slump and unable to adjust their production costs may well start questioning the benefits of euro membership. But where is the exit sign?
Article: Warmer inside
- Spain’s economy is more hidebound, so it will take longer [than Ireland] to revive.
- It is hard to see how a devaluation would help much even if that option were available. “If Spain’s main problem were competitiveness, I wouldn’t worry,” says Mr Gros of the CEPS: “The Phillips curve [which suggests an inverse relationship between wage inflation and unemployment] would take care of it.”
Article: The big sweat
- Unfortunately, some countries that seemed to be in decent shape, such as Ireland and Spain, turn out to have relied too much on revenues from soaring property prices and have seen their tax bases collapse.
