Spain’s dependence on central bankers hinders job creation

Fri Jan 25, 2013 3:39PM GMT
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Interview with Ian Williams
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Spain didn’t have the record deficits of some of the other Mediterranean countries, but fear of those deficits has led to the government not spending the public money in a Keynesian way that would have created employment, especially in the south.”

An analyst says, Spain’s unemployment is at record highs because it is beholden to Central bank austerity demands and refuses to spend to generate growth.

In the background of this Spain’s unemployment hit a record high topping 26 percent up one percent from the previous quarter and more than double the European Union average – This represent some six million people out of work. In the youth-aged bracket, it is estimated that 60 percent of Spaniards are without work.

Press TV has interviewed Ian Williams, Foreign Policy in Focus, New York about this issue. The following is an approximate transcription of the interview.

Press TV: Should we be surprised that we’re hearing figures of 26 percent unemployment rates in Spain?

Williams: Not totally. Spain didn’t have the record deficits of some of the other Mediterranean countries, but fear of those deficits has led to the government not spending the public money in a Keynesian way that would have created employment, especially in the south.

Spain had its own housing boom, which has collapsed and they really need to get it back on trail if unemployment is to be overcome.

The European Union has been good for Spain. The highways in the south of Spain were paved with Euros at one point.

But now the constraints coming from the European Central Bank and others are contributing towards restrictions on government spending, which is about the only way to get out of a crisis of this scale.

Press TV: We’ve reported that the unemployment rate for those under the age of 25 is significantly higher than for the other age categories in Spain and even throughout Europe in fact. Doesn’t that mean that we are looking then to a future with more unrest in the country?

Williams: Very likely, yes. It is 55 percent youth unemployment although some people say that those figures disguise the fact there are students and others who might want to work, but are doing other things.

But that is significant. Lots of young people with time on their hands and genuine things to protest about should send a warning to the governments. But the governments are listening to the market and the bankers on what to say, certainly not the voters and the young people on the streets.

Press TV: So, in a sense are you saying that the Spanish government is not being able to gauge its own people’s reaction?

Williams: It’s like most European governments at the moment, they seem far more prepared to hearken on to the bankers than they are to the voters and they’re far more worried about this usury confidence in the markets than they are about their own voters.

I think the idea is with the convergence of political views of many of the parties in Europe that there is no where else for the voters to go. They will find somewhere and Spain is one of those examples – Spain is one of the birth places of European fascism… and it came out of crises like that to an extent.