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Posts in Category: Spain

Spanish unemployment over 6.2 million

Spain is number one for unemployment in Europe

Spain - Number One in European Unemployment

I saw this on Facebook today and the owner said share to the world, so here it is. Six million, two hundred and two thousand, seven hundred people are officially unemployed in Spain right now. 240,000 - yes that's nearly a quarter of a million, lost their jobs in the first three months of 2013 (according to the national office of statistics).

Thing to note here is that the Spanish don't have much in the way of unemployment benefit. One has to pay in to the system for at least a year to get three months ub and you have to work five years to get the maximum duration which is still only a year. Then you don't automatically qualify for some other social security benefit. There are low benefits for families with children (cerca 400 euros monthly) or other odd benefits such as 'sobre 45' a benefit of twelve months duration that you can get on a year on year off basis if you are over 45 years of age and have previously paid into the system and qualify on various other criteria. The upshot is though there are a load of people in Spain who don't get any money at all for being out of work. They depend on family, friends, soup kitchens, bins and the back of restaurants and crime. They also work in the black economy.

Spain's black economy is huge. It's not as is often portrayed as an ingrained corrupt characteristic of the Spanish people. It's not as is often said of the Greeks, that people have a distaste for paying tax. In Spain, it seems to me that the main problem is that the system is skewed to deter people from working legally. There is not level at which VAT (IVA) is not applied to businesses in Spain, no allowance as in the UK. The equivalent of national insurance contributions in Spain is a flat rate of 240 euros per month, a horrendous burden for a single person starting out in business alone.

The tax rate is reasonable but filled with traps that catch the unwary. One way to pay depends upon you agreeing a level for a year. People I know have done that and been driven out of business when their income fell.

As such black money is very widespread and very popular. I've seen hundreds of itinerant agricultural laborers milling around at the bottom of town, waiting for farmers to load them into the back of a truck to pick fruit in the summer sun all day for a few euros and hour. I've seen offices, not of small businesses, but chains, which have two sets of books, one for black money, one for white, both of which go to the accountant. I've known employers to declare the minimum wage to get an employee on to the social security system and pay that employee half the declared amount in cash, and the employee says nothing because it's the norm - they say they need the work and everybody does it!

This situation gets worse all the time as more overly bureaucratic legislation comes down from northern Europe. The government implements something that the public servants dish out, the managers of firms either ignore or choose to deal with and if the do incur a cost, pass it down to the helpless employee. Just today I've learned that from the first of June, no property can be sold or rented without an energy certificate conveying it's carbon footprint. Will this sell more houses in a desperate property market? Or will it delay prevent sales, delay salaries and drive even more estate agents out of business? Watch for the unemployment figures in the last quarter of 2013 and I fear you'll see proof that it's the latter.

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Spain Announces Easing Of Austerity

Marino Rajoy To Announce Changes on Friday.

Pic http://www.lamoncloa.gob.es/IDIOMAS/9/Presidente/Fotos/2013/20130409_PdGGCS_UHP.htm 23/04/2013The austerity news is coming thick and fast. Barely two week after the Reinhart/Rogoff paper was discredited, politicians have been making noises that the end of austerity is near. Now the FT has reported that Spain will be the first government to announce an easing of the measures currently in place. 

In an article that follows the pattern of many other announcements by Rajoy, the idea is 'mooted' by government sources before the official announcement to test the water.

The article says plans will be unveiled to reform to the pensions system, labour market, service sector and fiscal management.

Of particular interest are measures the liberalise the protected professions of which Spain has 174 that have barriers to entry due to specialist entry qualifications. These professions are backed by powerful lobby groups and it will be a battle to get such measures through.

I'll blog more on Friday when the official anouncement comes out but this sounds like the first good news for Spain in a very long time.

http://www.ft.com/intl/cms/s/0/f539b874-ac31-11e2-a063-00144feabdc0.html#axzz2REgA3Zr7

View User Profile for Admin #Andalucia evangelist, social marketer, musician, guitar technician, reformed estate agent, recovering programmer, political disruptor - yup that's me!