The horizon is turning dark. CEOE is auguring a year of stagnant economic growth in Spain. But unemployment will continue to rise, leaving around 5.2 million Spaniards without jobs. Pessimistic views predict that the GDP will drop by 1.2% and there will be upwards of 5.5 million left jobless.
Whether the state of the economy veers toward one direction or the other will depend on how the European sovereign debt crisis develops. So Rajoy should balance his efforts between recovery and cutbacks. He should be firm and swift with reform measures. Not the patches and half-done jobs that we have seen up until now. We have already seen that this approach results in deep-rooted unemployment.
