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THE PAIN IN SPAIN

Spain goes from terrible recession to pathetic recovery

AP Photo/Andres Kudacki
Someone wake this guy up and tell him the recession is over.
Published This article is more than 2 years old.

Let the slow clap begin.

Spain’s economy is growing again after two years of crippling recession that has seen the nation’s unemployment rate climb to 26%.

There have been some early signs of improvement on unemployment, too. The rate is actually down slightly from a peak of more than 27% in March.

And from a trade perspective, Spain has made great strides to live within its means, as its trade deficit has all but disappeared. (Although that reflects, to some extent, a collapse of imports related to the miserable domestic economy.)

But for the record, Spain hasn’t even really begun to address its problems, which are centered in a rotten banking system, where non-performing loans are piling up.

What’s more, it has acquired new problems. Spain’s bust was centered in the private sector—in a giant real estate bubble. But government finances were actually quite manageable and improving before the collapse. But now, its debt-to-GDP ratio has skyrocketed due to the damage the Spanish economy has endured over the last few years.

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