Sunday, April 5, 2015

Spain's recovery ahead of France

Regarded - along with Greece, Italy, Portugal and Ireland - as one of the 'sick men' of Europe, Spain has now emerged from the crisis of the last five years, following a period of schock treatment, according to a report in the French business journal Capital (April 2015), compared with France. According to four main indicators highlighted in the report, Spain now beats France in terms of reduced labour coasts, which in turn has led to an increase in exports (while those from France are down); increased (foreign) investment - up by 4.7% compared with France's meagre 0.6%; and increased consumption - up 2.7% compared with just 1% in France.

The reasons for the Spanish success compared with France include the insistence of the government on a series of measures to cut spending - including raising the retirement age from 65 to 67 (while for most it remains at age 60 in France with many occupations alowing even earlier retirement from work); cutting public sector salaries; reducing public sector jobs by 400 000 by not replacing those retiring (talked about in France but not really implemented), and reducing expenditure in several areas including education, with a huge rise in university fees (as in Britain), and trimming hospital budgets.

Along with Ireland, Spain has taken drastic action which is now beginning to pay off and it will be interesting to see that happens to Greece in particular under the recently elected populist government, while France contues to tinker around the edges with measures such as the loi Macron, which recent polls confirm that the vast majority of French do not understand, other than the law allowing slightly increased Sunday opening of retail outlets.