This past Thursday, Spain began its halt and its reliance on bailout loans from Europe. After the construction sector had its fall out, Spain was in desperate need to fill up the vaults in its banks. While some critics still believe Spain is in its rock bottom pit, some people the Spanish job market may be turning around. “Spain posted seasonally adjusted job growth for the first time in nearly six years.” Officials and independent analysts say “the job-growth threshold is lower now because of a two year old overhaul of labor laws that made it easier and cheaper to lay off workers.” But now, according to Gayle Allard, a professor at IE Business School in Madrid says “companies are as likely to hire because the lower dismissal costs have diminished the risks associated with taking on new workers.” Companies have been seeing an increase in demand from an increase in requests for new employees and workers seeking jobs. As we see the Spanish banks ending their need of loans from Europe, there is progress in the works for Spain.
Although a lot of people have been inspired by the progress of Spain, many economists are not completely convinced that there will be a complete upswing. Why should we be completely confident that there will be a full turn around just cause the banks aren’t taking loans anymore? Megan Greene, the chief economist at Maverick Intelligence in London says that “The big game that politicians and bank CEOs are playing is ‘extend and pretend.’ If we pretend that our banks are really healthy, then eventually all the assets underlying things on our balance sheets will regain value, and we won’t actually have to take such big losses.” This is the exact reason why countries like Spain and Greece have been in the dumps for the past several years. They have continued to believe things will work themselves out without any major changes. Spain thinks that not having to take bailout loans from Europe is one of their big moves and that the rest of their issues will work out themselves. “So that’s the game everyone in Europe has been trying to play,” Greene continues to say.
Even the job market doesn’t look like it will have the best outcome as some people have been saying. “More than 90% of the new jobs are temporary, some say, and part-time contracts are also increasing.” So yes, it is easier to hire people just as it was easy to let people go, but that does not mean Spain is making great progress. For there to be a complete turn-around in Europe, all the countries are going to have to figure out a way to come together to fix their economies. I do not believe one country will be able to solve their problems on their own. There is too much chaos still occurring in Europe for a major progression to come about.