Joseph Stiglitz: Spain cannot overcome the crisis.


A study concludes that Spain has no capacity to overcome the crisis  and is drawing itself into economic breakdown

“There is no light for Spain at the end of the tunnel” asserted economics Nobel prize winner Joseph Stiglitz. This has been borne out by the Cercle Català de Negocis, the Catalan Business Circle in a set of Studies carefully analyzing macroeconomic data on the Spanish State, collating forecasts made by international bodies governing the global economy.

The resulting scenario is certainly distressing: in the current year, 2013, Spain has to place debt on the market equivalent to 20% of its GDP, a figure that could go up to 114% of GDP by 2020 and reach 129% by 2030, according to European Commission forecasts. This sustained increase of debt will bleed all the investment potential of the Spanish State, which will have to concentrate its efforts on satisfying all the resulting financial costs.

Furthermore, Spanish society is undergoing accelerated aging: by 2021 there will be 9.3 million people over 65. This means that pension expenditure will go up from the current 10% of GDP until it reaches between 20% and 30% of GDP by 2050.

A state with this kind of debt, suffocated by interest payments and pension commitments, will hardly be able to find the necessary funds to fuel its productive economy, which means keeping the same unemployment rate or even making it higher. It is a vicious circle.

Read @ Help Catalonia

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