The first European economy hit the accelerator and records historical growth: Germany scored a GDP rise of 2.2% in the second quarter versus the first, the biggest increase since the country's reunification in 1990. The engine and the train pulls Germanic euro zone, which experienced an increase of 1%. Spain lags and gets only 0.2%.
Spain, in the midst of economic depression, hopes to play the dividends of his victory in the World Cup but, beyond the euphoria reigning record-breaking unemployment and growth does not take off.
"Winning the World Cup since then is proof that when we get something we plan and also to the difficulties we grow. All that is good, confidence in our country and outside," said Monday the government Finance Minister socialist, Elena Salgado.
Spanish Industry Minister Miguel Sebastian, had indicated last Thursday that would have to be revised upwards the GDP (Gross Domestic Product) for 2010 Spanish victory in the event of "The Red". The government is committed when a contraction in activity of 0.3% over 2009.
Battered by the housing bubble burst in 2008 combined with the international financial crisis, Spain is struggling to emerge from recession, with a modest GDP increase of 0.1% in the first quarter of 2010.
The unemployment rate rises to 20%, the highest in the euro area, the deficit exploded to 11.2% of GDP and observers believe that the country faces several challenges to overcome the crisis: reform its labor market and its banking system and contain public spending.
But the victory may temporarily alleviate the evils Spanish, for example due to a boost in household consumption.
Triumph "can help the consumer," says Josep-Maria Sayeras, an economist at ESADE, warning while anyway, "there are many clouds on the horizon."
"When a society is happy, always moves to the consumer," he told AFP Miguel Angel Fraile, secretary general of the Spanish Confederation of Commerce, which includes about 450,000 retailers.
"Sure that consumption will increase. Do not know at that level," he added.
An ABN Amro Bank study made on the occasion of 2006 World evoked an increase of 0.7% projected growth for the champion, a figure that seems too ambitious for many economists.
One element that could dampen consumer enthusiasm is that the Spanish private debt is already high, 178% of GDP, and that the poor employment situation should limit consumption.
A study by the Nielsen cabinet, consumer confidence reached in the second quarter, a record low.
An economic sector that could exploit the World Cup effect is tourism, which contributes 10% of GDP. Spain is the third largest tourist destination after France and the United States.
"It is good for tourism," he told AFP Marcio Favilla, executive director of the World Tourism Organization (WTO), based in Madrid.
"In tourism promotion, the positive image is very important," Favila said, adding that cities like Barcelona and Madrid, home to the two biggest teams in the country should "capitalize on the victory as early as possible."
The European Central Bank (ECB) believes that the goal of cleaning up the deficit covered by the austerity of the Spanish Government to comply with the Stability Pact in 2013 is in line with the recommendation under the excessive deficit procedure, although critical that this objective has not been supported by concrete measures.
"The goal of structural improvements in annual average set is 1.8 percentage points of GDP, in line with the recommendation under the excessive deficit procedure to achieve a superior fit to 1.5 percentage points. However, this may not has been fully supported by concrete measures, especially for 2011-2013, "the institution headed by Jean Claude Trichet in the latest edition of its monthly newsletter.
The updated stability program of Spain plans to correct the excessive deficit in the country for 2013, consistent with the recommendations made in the context of the excessive deficit procedure.
However, the ECB will extend their criticism to other euro countries such as Ireland, which has until 2014 to reduce the country's deficit to below 3% of GDP, as the Irish Government, which is committed to achieve "ambitious structural consolidation" has not yet specified the measures to achieve those objectives.
Also, the society says that in the case of Germany, the planned fiscal adjustment has not been supported by concrete measures, but states that the German government expects to release a detailed consolidation strategy before the summer.
Ballasted BAD WEATHER DATA FIRST QUARTER GDP.
On the other hand, the ECB notes that quarterly volatility caused by the impact of "special factors" during the first three months of the year, including meteorological in nature, advises the comparative half-yearly use when assessing the evolution of growth of the eurozone economy, whose recovery is "in progress", but is likely to occur in an "irregular".
Thus, the latest edition of the monthly bulletin of the ECB notes that "a number of special factors, among which include adverse weather conditions observed in part of the euro area during the first quarter of 2010," influence economic activity block, which believes that "given this uneven path, it is more appropriate to avoid the quarterly volatility and compare the observed growth patterns in semi-annual terms."
In this regard, the Governing Council of the institution headed by Jean Claude Trichet expects the economies of the euro area to grow at a "moderate" in 2010, in an environment where uncertainty remains, because the process of balance sheet adjustment taking place in various sectors and the expectations of reduced utilization of productive capacity is likely to curb investment, as the deteriorating outlook for the labor market is weakening consumption.
Regarding inflation, the Governing Council expects price stability is maintained over the medium term, thereby supporting the purchasing power of households in the euro area.
It also says that inflation expectations remain firmly anchored in line with the objective of keeping inflation rates below, but close to 2% over the medium term.
The earthquake did not respect anyone in a city always fragile, believed to be accustomed to misfortunes until he met with wild esteterremoto. The presidential palace, the building of the UN has confirmed 14 dead but could have lost hundreds of employees, the cathedral, the best known hotel in the city, Parliament and hundreds of flimsy houses of a country always wins, always mistreated by nature and by men, recorded substantial damage. Or have sunk forever. As schools and hospitals, where they were most needed. Even the "central prison has been destroyed. There have been leaks of prisoners," according to spokeswoman UN Humanitarian Office.
The World Bank estimates that Haiti, the poorest country of America will lose more than 15% of its GDP because of the earthquake that struck on Tuesday, so it has confirmed a donation of $ 100 million (70 million euros) , the highest announced so far by any country or international organization.
In 2008, production of Haiti's GDP fell 15% due to four tropical storms, but the World Bank believes that this time the destruction exceed that level, since the disaster has affected a larger area and Port au Prince, the capital.
The Caribbean nation of 9 million people in a former French colony and the oldest black republic in the world, which was founded by freed slaves after a revolution that brought independence in 1804.
Haiti is the poorest country in America with an average annual income of $ 560 per person. It ranked 146 out of 177 countries in the Index of Human Development, UNDP.
More than half the population lives on less than $ 1 per day and 78% with less than $ 2. There is a high infant mortality rate (60 per 1,000 births) and the latency of HIV among those between 15 and 49 years is 2.2 percent.
The infrastructure in Haiti is close to total collapse and severe deforestation has left only 2% of the forests.
After decades of dictatorship, former Roman Catholic priest Jean-Bertrand Aristide in 1990 became the first leader of Haiti chosen in free elections. Aristide was ousted in a military coup in 1991 but returned to command the support of the United States.
In 2004, Aristide was removed from the country by force and exiled after a rebellion of gangs and former soldiers.
Haiti is ruled by President Rene Preval since May 2006 when the country returned to constitutional mandate.
Spain recorded a GDP contraction of 0.7% in 2010 and together with Greece and Ireland, will remain at the tail of the economic growth in Europe, says Tuesday the U.S. entity Morgan Stanley, says the country has numerous tasks for restore balance in the future.
"Unlike in other European countries, Spain is in the middle of a structural adjustment, particularly in the construction sector, which will weigh on the economy in 2010 and 2011," predicts the report.
However, the bank asserts that this adjustment is taking place "fairly quickly" and that if productivity continues to accelerate, Spain could become "more competitive" and benefit from the recovery of exports.
The entity identifies five factors by which the country's economic growth will continue to evolve negative in 2010 and upwards, but slowly, in 2011, the first one, "that stabilization of the construction sector is still far" and is unlikely to stabilize soon.
Second, consumer spending levels remain "anemic", but the bank predicts that the Spanish labor market contraction will be harder than in other European countries, but "shorter" as well.
In addition, warning about the high leverage of private sector, which "weighs" about the economy and that will continue "for some time," although the lower mortgage interest rates and corporate could provide "some relief".
IMPROVING THE COMPETITIVENESS
On the other hand, the bank warned that credit availability will remain constrained over the next two years, as banks are reluctant to lend because of uncertainty about potential losses, even though the government ensure that the institutions are well capitalized.
Finally, Morgan Stanley warns that because of the large budget deficit that keeps the Spanish economy, the country can not long maintain fiscal stimulus and remember that tax increases for this year are already on the agenda of the Executive.
But not all bad news for the Spanish economy, says the bank, which emphasizes "rapid pace" with which the adjustment is taking place. "With GDP to shrink less than employment, labor productivity has accelerated," said Morgan, who says that if these benefits are sustained, will reduce unit labor costs, which will encourage competitiveness and exports.
A recovery in exports could help rebalance the economy whose main pillars of growth have been domestic factors during the years of boom, says Morgan Stanley, however, remember that the country will be the last to leave the eurozone recession.
The published data finds that there is no doubt that the European economy recorded the worst since World War II.
Gross Domestic Product (GDP) in the euro zone shrank between January and March this year by 2.5% in the same proportion as that of the 27 countries of the European Union, Eurostat said today.
This reduction represents for both regions, the highest since the statistical community agency monitors the development of their economic margnitudes.
Meanwhile, the Spanish economy, with a 1.8% decrease quarter is the fourth country to less falls, behind France (-1.2%), Portugal (-1.5%) and Belgium (- 1.6%), although accumulating a decline of 2.9%.
The data published today, both the eurozone and the EU strung four consecutive quarters of falling GDP, as well as two quarters of decline in annual terms.
In terms of reduced GDP, the data show that the recession is becoming more severe in Europe than in America, where the economy fell by 1.6% in the first quarter and 2.6% on year
The American journalist and economist Paul Krugman, Nobel Prize in Economics in 2008, said today that "the road to Spain will be painful or extremely painful" in reference to the crisis situation, and explained that this will vary depending on your environment in Europe and to develop policy in the European community.
"The path that Spain is ahead is difficult for the euro", explained to reporters today, said that prices and wages in the country are "unsustainable" because they are not aligned with the other members of the European Union.
Krugman noted that Spain is living a process of "deflation" similar to what Germany experienced a decade ago.
"If the European economy is deflation, a possibility accurate, Spain will have to reduce wages and prices," he assured the economist, who also predicted that if the European Union grows from 2 to 3% annually, Spain feel "the pain "of five to seven years.
During a conference be held by the Confederation of Employers of Andalusia (CEA) in Seville until morning under the heading "Responses to the crisis," Krugman has argued that this has not happened in any country since the Great Depression who lived 1929.
He also explained that the response to the crisis by the United States "is inadequate," but added that the answer you are giving the EU "is only a third of the U.S.," and added that in America there is a union that exists in Europe.
"The EU is an economic superpower but does not act as such," the economist, who added that the U.S. government still has leeway to spend money in the event that there is an "extreme situation" because it could add a 30% deficit in GDP (Gross Domestic Product).
The economist, who writes from a column in The New York Times, has said that the economic problems the EU is facing are two fronts that pass through tax policies, which require coordination, and how to address these problems by of the continent.
Regarding the economic plan of Barack Obama explained that he is "happier" than others, yet also lamented that not enough though "gives way to have certain expectations."
As for euro adoption by Spain, the economist has recognized that "it is possible to live a better situation if he had never joined the European Economic Union," but also recognized that the hypothetical possibility of leaving, although temporarily, "would lead to chaos."
Krugman pointed out that the last time a currency area broke in Europe was the Austro-Hungarian Empire, and closed for two weeks a border, "which is currently in Europe is impossible."
As for the next G-20, has asserted that there is an agreement between the U.S. and Europe, "especially with Germany," and declared that if "something important out of that meeting will be a surprise."
"Expect ambiguous statements and possibly the announcement of another meeting later", and ended by declaring that we need "something more than fear of God on both sides of the Atlantic."
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