Its not good news for Spanish citizens this week unfortunately. The Bank of Spain has announced today that public debt in the country has risen by a whopping £6.7bn resulting in both the central and regional government owing €988bn which is an alarming announcement that will leave many in the country reeling from the news. Spains public debt is now so high that it reportedly resembles Spains GDP by roughly 95%
The public debt in Spain accompanies record levels of unemployment as well, a report has stated that employment levels in the country may take up to 10 years to stabilize. What makes this reports findings so unsettling as well is that even if Spains unemployment levels rose by 2% it would still take up to 10 years for unemployment levels to resemble Spains 2007 employment figures.
This does not appear to be a very positive outlook for Spains eligible workforce as it means 10 years of ongoing employment instability in a country that is reported to have a combination of low skill sets, and workers who currently earn at least 20% to 40% less in comparison to other European countries according to BBVA. With such high records of unemployment which is to blame for these salary inconsistencies the BBVA says in its report the country is dealing with a double whammy in regards to its public debt and unemployment crisis.
This doesnt look very encouraging for Spain as the bank also discovered via its own research that Spains commitment to investing in research is at least 70% lower than the EU and US average. This highlights that not only does Spain have a skill set shortage the country does not have sufficient skills to fulfil job roles within the technology sector either.
Spain is a country that desperately needs to find solutions to its unemployment problems which could easily be resolved if the countrys GDP rose by 0.6% the banks report states. Its clear that if the country can resolve its unemployment troubles then the countrys public debt could also be resolved as well.
Spain is a country that has seen its fair share of economic instability recently. Reports also state that members of the Mortgage Victims Platform are staging protests in regards to repossessions. The Bank of Spain has reported that there has been a €6bn rise in overseas property investment since 2004, however, Spains economy right across the board in regards to public debt and unemployment means the countrys housing crises is just another alarming aspect of the countrys economic state.
The worst case scenario for Spain at the moment is that if the country cannot boost its rate of unemployment fast enough, public debt in the country will continue to spiral out of control as both issues are linked which is obviously fuelling the countrys complicated public debt and unemployment problems.
Image source – Reuters