The Economy Will Start In July.
2021-02-27 | by CusiGO
The beating of a bat in Wuhan caused an economic hurricane in the western Mediterranean. Magaluf is the center of mass tourism in mallocan and the center of Spanish crisis. At the end of pontabalena street, there is a huge bar, square, supermarket, Malvinas, as well as a very high bar and temple, They used to attract a group of hooligans with a woman dangling on the roof, and all three of them were not interested in lime and singing. In the first section of the road, you’ll see another pub, and then you’ll see a shop, two tattoo shops, a hamburger shop, a jewelry shop, a fried chicken shop, an ATM, three extra bars, that’s all. Balconies and other perversions aimed at thousands of British tourists have been part of the landscape for decades. But I haven’t seen a single tourist here for months. The blinds are inclined. The kawades are so scarred that businessmen don’t even know if there will be a tourist season. “If they promise me that we can open in July, I’ll grit my teeth,” sighs Toni horrach, owner of 20 hotels, one in downtown Magaluf.
“Zero zone” is not a simple metaphor: in 2020, the gross domestic product (GDP) of the Balearic Islands fell by 27%, which is twice and a half of that of Spain as a whole. The economy of the Balearic Islands and Spain tell the same story, but everything on the island is more Baroque: the huge influence of tourism (16 million tourists in 2019) has contributed to this decline more obviously. The population is just over 1 million). In just one year, the 27% unemployment rate is comparable to the destructive power of the great depression in the United States in the past decade, which is equivalent to the collapse of Greece in the 15 year euro crisis.
From anecdote to classification: apart from the fact of the difference between magaluv and Balearic, this is the chronicle of Spain’s second strike in a decade. Economist Carlos mart í Nez mongay said: “whenever there is a major crisis, the Spanish economy has the ability to maximize its impact: Spain was once one of the countries most affected by the great recession, and now it is. Then the bursting of the real estate bubble took away banking, public finance and everything that was in front of it, and then the austerity policies supported by Berlin and Brussels forced it to make very difficult adjustments after years of excesses. This time there is no moral story: there is no excess. It’s a non economic shock, but it’s devastating: the importance of tourism and community services, the proliferation of small and medium-sized enterprises, and the structural imbalances in Spain since the 1980s explain this punishment to a large extent; Andre Sapir debruger, He believes that the quality of governance also plays a key role.
Cuba, Philippines and civil war
“There has never been such a hard landing: it’s terrible,” historian Adam Tooze said in explaining kaude’s economics of the dead. The coronavirus has spread to health systems around the world, forcing people to take measures unique to the Middle Ages: the health crisis has led to the hibernation of the economy, and the economy has fallen into an “induced coma” – as the economist angel ubide happily defines it – we have not yet woken up from it. Spain has adopted a mixed model of coexistence with the virus: a Yenka, which tightens or relaxes restrictive measures depending on the infection. But we didn’t dance well, Yenka: the results were mediocre at best. The authorities want to save the summer and Christmas, which leaves behind a series of infectious diseases. Miguel Sebastian, a former socialist minister, vividly summed up: “the balance between health and the economy damages both health and the economy.”.
For months, Spain seemed to be an advertisement for a funeral home: according to ine, there were 90000 more deaths than in normal years. Although the unemployment rate has not soared as before, the tone of the economic data is the same. Angel Talavera said: “the burden of the Spanish economy on this mess is normal: gross domestic product (GDP) has accumulated for five years, but is in the process of slowing down. In this mess, Mariano Rajoy and Pedro s á nchez have failed to correct structural imbalances, especially fiscal imbalances.”. Oxford economics. Finally, by 2020, GDP will have fallen by 11%. “The response to economic policy is right,” judged Juan Pablo risk, a former State Secretary of Ernst & young and chief executive of the Rajoy government, “despite some delays.” “ERT curbs unemployment; the ICO line allows the business sector to survive, with the rest to be borne by Europe: Brussels suspended fiscal rules, the European Central Bank took super expansionary measures, providing room for governments to maneuver, even though Spain uses less money than other countries,” he added.
Jorge Sicilia, BBVA’s chief economist, added: “these measures worked, but they were designed for a short-term crisis: so if we don’t want corporate mortality to soar and Spain doesn’t have an economic engine when it recovers, we have to provide direct assistance to businesses.”.
This is the key: know when the desired recovery will come, a month’s rise or fall may mean nothing, businesses will either come back or disappear, tourism will either stagnate or enter the red alert. Before we wait, there are several figures to measure the scale of the tragedy: GDP has fallen at a rate comparable to that of the civil war, and fiscal policy measures have raised public debt to levels similar to those of Cuba and the Philippines in the years after the losses. The temptation to eat breakfast every morning with a new historical phenomenon is one of the maladies of our time, but the fact is that the recent impact is enormous.
2020 is a sign of a pandemic, and 2021 is on the same path: analysts say the first half of the year failed; the government is less passive, but partly because it is seen as a professional optimist in the lean year of the cow. Starting in June, when vaccination levels reach a reasonable level (there is a fuzzy line between 50% and 70% of the population), growth should come, and if all goes well, a super rebound will come by 2022: if the new strains do not cause another chaos, if the way vaccines work looks like this, If businesses can withstand the last shock, if the authorities can’t put pressure on the orthodoxy as they did in 2010. In the last sentence, there are more conditions than Kipling’s poems, but no virus, no crisis, one hundred years.
A bridge and two architecture schools
The key is how and when the economy starts until the engine restarts. Oscar arse concluded: “if the vaccination level in June is raised, the tourism season will be saved, but if it is postponed to the end of summer, how much will the economy suffer: in the uncertainty of these three months, we face great risks.”. Chief economist, Bank of Spain. Radical uncertainty is the definition of this era. The risks (or fears) associated with vaccines and virus strains make it like talking in the fog to find the boundaries that begin to recover.
“Recovery is just around the corner, in a few months. But minimizing this period is crucial to preventing corporate bankruptcy and tourism. Gonzalo Garc í a of AFI concludes: “fiscal policy must make a final effort to build a bridge and save the remaining four, six, eight months.”. There are two construction schools to build the bridge. The European Central Bank, the International Monetary Fund, Spanish banks, employers and trade unions have called for direct assistance to businesses. Nacho Alvarez said the idea is attractive even as part of the government: “the speed of recovery depends on vaccination and the implementation of EU funding, but also on aid to debt laden businesses; hundreds of thousands of small and medium-sized enterprises and self-employed people are at risk of closure.”. Our economic strategist.
“The economy is slowing down again,” Alvarez criticized The key to this decision is the vice president Nadia calvinio, who favors promoting debt restructuring (extending repayment or providing loans) and providing participatory loans (a hybrid formula between capital and credit), It allows for payment by instalments of income), but this in turn helps to get direct aid to the autonomous region, which is currently financially weak. “We have time to build an effective bridge for rejuvenation, but we have to build it with the right materials to see which viable companies may have problems, what assistance they have received, and take the necessary measures to minimize scars,” the Ministry source said.
The story of two crises
This will be the key in the near future, but it is clear that the nature of this crisis is very different from that of the last one. Its impact will also be different. Villacanias (Toledo) was a zero point of the great depression, specializing in the manufacture of doors, and the collapse of real estate destroyed almost everything: in more than a decade of prosperity, there were only two floors left. Laura Aranda, who has just turned 40, went out to eat from one of them. He dropped out of school at the age of 17: “there are a lot of jobs, high salaries, and that’s what everyone does.” During the crisis, he shut down his company and worked “as much as possible” in the hotel. He managed to get back to a factory and now looks suspiciously at the influence of cowide, who has not spent the second bill on his work and life. “It’s a story of one or two generations who didn’t form and were seriously affected when the last crisis broke out. A lot of people have to leave, some have to relearn… But covide hit again an area where he never looked up, “said Alberto Perez, the town’s adult training professor.
Ten years on, but the trauma of the great crisis is still visible in this tainted area. Another story of Mallorca is that historians tomeu canyelles and Gabriel Vives, the authors of beyond myth, believe that once the virus is destroyed, things will continue: “for 30 years, we’ve been talking about changes in patterns, but that’s almost never going to happen.” “The European fund is an opportunity, but frankly, don’t ask us for a long light now: the priority is to save the business,” horrach points out. The economist Carles Moda referred to the “immutable inertia” brought about by the great success of the Bali Ali tourism model, but added that it was “crucial” to rethink the strategy.
When a quarter of GDP fluctuates within a year, Keynesian “long-term, all dead” blurs. Economic policymakers discovered the risk premium in 2010: the role is now played by contagion. “We have been looking at ourselves, as well as Germany and the UK, because the near-term future of these islands depends on that. If the crisis continues, please fasten your seat belts, but we see some encouraging positive signs: we have to seize it, “concluded economy minister Iago neguela.
A Federal Reserve report linked the Spanish flu, which killed 50 million people, to the rise of Nazism. This time, Spain faces two main risks: one is purely economic, the other is more social and political.
Spain is likely to do the same thing as it did in 2010: ten years ago, the impact of the Spanish crisis was slow, and the authorities refused to inject capital into banks as all European countries did until it was too late. In 2012, Spain, alone, was forced to ask for ransom in exchange for adjustment. Is it different this time? Part of it is: economic policy is right, and neither Brussels nor Frankfurt has been attacked by German orthodoxy. But there is a possibility that the government will cut aid to businesses, which will lead to problems. Ramon marimon of the European University Institute said that even if it doesn’t happen, when the economic recovery comes, northern Europe will ask the European Central Bank and Brussels to take more stringent measures: by then, the most heavily indebted economies will be hit again, “especially if we don’t make good use of European funds, especially reform.”.
A second, more political risk is emerging. Manuel Cruz wrote in his last article: “fear is so natural that it is so strange that there is no fear.”. From this great crisis came the discontent of the national populists, who were rooted in the 52 seats of their careers in Washington, London, Brasilia, Budapest and Saint Jerome. It’s too early to know what’s going to happen, but there are symptoms here and there, related to some worrying data: Spain’s youth unemployment rate is still above an alarming 40%, and inequality is high in the Baltic States and Romania. The end of the story is close to where it started, from the gloomy magalov: 350 people line up at caputxins monastery in central Parma to buy sandwiches, juice and some vegetables. Mary and mallorcana, 36, admit that she comes here occasionally: “I work for a sports company, I have a little son, and I don’t have money.” So far, there has been no public unrest in Parma, only entrepreneurs – the paradox of crisis – but hunger has tripled since the summer. Paradoxically, according to the great economist Albert Hirschman, the most dangerous moment in the great crisis is the first stage of economic recovery: it’s like when a lane starts to cycle in a traffic jam, which can trigger the anger of other drivers. Watch it.