Spain - weathering the
economic storms
By Valeria Camerino and Alex Pullin
It wasn’t so long ago that Spain was considered
a sleeping giant, with a dynamic, fast-growing
enterprise industry that was threatening to power
its way to the top. Recent problems on the housing
front show that the fast acceleration towards
Europe’s summit may just have to wait that little bit
longer. Then there’s the issue of staff and skills.....
s the Economist Global Survey for May 2008 says, Spain may
A
have some serious problems in store. Financial problems will be
particularly serious in countries where housing and real estate prices
have contributed heavily to economic expansion. This is particularly the case
for Spain, it says, where the housing market has started to collapse and is
threatening to bring down the economy as well. Construction approvals for Of course Spain will always be a fascinating country. Situated between the
new homes fell by 25% in 2007 as a whole, with a fall by 34% in the fourth powerhouse of France, and the IT-backward Portugal, it seems to be caught
quarter showing a deteriorating trend. As a result of an earlier rapid boom in between two polar opposites. Unlike a lot of European countries, such as the
the real estate market, the Spanish economy is now particularly exposed to Czech Republic and Poland, its IT industry is not dominated by its capital city.
problems in the construction sector. Naturally, part of this is due to the relatively large size of the country, with a
The overall economic confidence index for Spain calculated by the population of 84 million, but part is also due to its four languages, castilian,
European Commission is now at the same level as at the start of the last catalan, galician and euskera. This goes to the heart of why so many companies
recession in the early 1990s. With general government debt at just 39.7% of are keen to have a high number of offices there.
GDP and a budget surplus of 1.8% of GDP in 2007, the Spanish government Spanish ICT heavyweight Indra has offices in 33 different offices around the
has ample ammunition to boost the economy. However, monetary policy will country, including Asturias and Tarragona while Paris head-quartered Capgemini
provide little support, suggesting that the shock for Spain will be much more has seven. It is a common belief that to succeed in the whole of Spain you
severe than for the euro area as a whole. have to have at least three offices.
18 02 MAY 2008
It0808 - 18-21_Spain_Ent.indd 18 2008-04-30 11:49
Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32