It doesn’t look very good in Spain. The motherland is in the hole. And now it turns out that the crisis will be worse than expected. The pandemic has affected us all, but Spain has been particularly hard hit. Not only in relation to the dead and infected. The measures taken due to the corona virus mainly affected sectors that are particularly important for the economy. In other words, the corona virus was a dagger in the middle of the economic heart of Spain. I am of course referring to the jewel in the crown of the Spanish economy: The tourism. The Horeca sector. Hospitality, restoration and cafeteria. The leisure industry. This engine was turned off for over 100 days. However, starting an engine is not the same as turning it off. What’s going on in spain
The past few months seem to be something from a science fiction novel. Not even the bravest writers imagined that we would save the world in pajamas. Nobody thought that the apocalypse would not be like Mad Max, but rather an online talent show. After a period of denial, the delivery came. And with that came a time of sentimentality. Applause at night. Concerts on the balconies. Online courses. And everyone had a quarantine resolution. Everyone had a personal improvement plan overnight. Not all of us have managed to lose weight. And not all books can be read in full. But the Netflix series was engulfed in intense marathons. Beyond the conspiracy theories that circulated to stain peace, culture and creativity flourished in a corner.
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Of course, after this time of innocence, the situation became too much. You can live like this for a while, but not for long. Here’s the dilemma. Contagion or poverty? The economy cannot be stopped. And that is not because of the supposed cruelty of the capitalist system that forces us to run like a locked mouse. I am referring to something much more elementary, old and universal. If you are not working, you are not eating.
The slowdown in economic activity led to a decline in consumption. The reduction in expenditure leads to a decline in sales. A drop in earnings means deflation, losses and layoffs. Things are worth less, companies lose money, and unemployment hits homes. Consumption continues to drop like a hellish snowball. Stopping the machine is easier than switching it on again. Many estimate that it will take at least two years before the economic situation before the coronavirus is restored.
Was the remedy worse than the disease? In retrospect, you could say that mistakes were made. The pandemic has surprised the world and we have to admit that we were unprepared. Suddenly he exaggerates with the measures. Of course, now is not the time to blame yourself. When improvising, the recommendations were followed. They tried to do their best. But now some suspect that things weren’t handled ideally.
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This is relevant now as it could tell us that despite the new outbreaks, it is likely that no second sentence will be imposed. What could the plan be? Strict quarantine for the infected, mandatory use of the mask, more tests, hospital capacity, social distance, special care for the elderly and desperate search for the vaccine. But with an open economy. This is an elegant middle way between nothing and everything.
The Spanish economy is expected to shrink by 10% or more this year. The most pessimistic speak of a 15% decrease in gross domestic product (GDP). The most worrying, of course, is the deficit and debt. The government can no longer. Too many issues and too few entries. Government books are not very good. Debts of 120% of GDP and a deficit of 12.5% of GDP are expected. And that’s problematic because The estimated work stoppage for this year is 20% (+/-). Where does the urgently needed aid come from?
The Bank of Spain has spoken out and recommended increasing VAT and cutting spending. In other words, the painful Austrian solution to tighten your belt. A solution that is still a problem when the body is no longer meat and pure bone. Recommending a diet to malnourished people is outrageous rather than thoughtful. Spain urgently needs help from Brussels. The problem is that getting Brussels to make decisions at the required speed is not easy. Especially when you talk strictly about conditions and controls.
Many agencies have adjusted their estimates based on the new bad data. Now it turns out that the favorable May dates were the product of post-delivery decompression, but the new dates show a darker picture than expected. The sectors that are most dependent on the outside are most affected. The building is on the ground. With the disruption of distribution chains, this sector was one of the first to collapse.