by Sydney Ramgolam
The main reason for the crisis in Spain? First, it’s a simply matter of spending: there’s smart spending and wasteful spending, and Spain simply needs to restore balance between the two. The Spanish crisis was one of too many credits in too short time. The crisis came for many like a surprise, since Spain was the only country in Europe to have a public surplus in the 2000s. Something must have been going right, but from the table below we can see where spending continued to rise despite a fall in revenue (see years 2008 onward). Instead of continuing to spend because theoretically spending increases GDP, Spain ought to have curbed unnecessary spending, keeping its output lower than its input, and directed remaining capital towards investment to bolster GDP rather than try to artificially inflate it. And also politicians insist, but the crisis is not over, because too much spending ended up in corruption and the society is very tired of all the lies.
Second, deciding economic policy has become overly complicated. Not a single EU country has put the Union before its own national economic priorities, but all of these individual prerogatives are inextricably tied up in a supposedly unified European economic policy. In addition to having three pan-European entities whose competences overlap for lack of definition, these entities are comprised of national government officials. Naturally, someone who is employed in federal government will have that nation’s concerns foremost in his mind; however, the point is not to champion the national cause, but rather to layout a collective European plan for economic advancement. There is a lethal lack of economic integration within EU entities that prevents the development of coherent economic policy.