Recovery?

Last week I was back in Spain at our usual haunt near Marbella, and once again I went to have a look at the state of the local shopping streets and the construction industry. Last year (see “End of Austerity?”) I thought I had seen the green shoots of recovery there. This year I was delighted to see that things have improved considerably. There were only one or two shops still looking for tenants and those were in the worst situations. Stalled sites are now building again – on the development where my in-laws own an apartment 24 new houses are being built of which only 5 remain available. Further, if you look in the local rags aimed at the ex-pat market the doom-ridden articles giving advice on how to cash up and go home which I could still find last year have been replaced with the cheerful ones extolling life on the Costas. Optimism is now in the air, albeit that no-one is selling properties at the same levels that you could find 7 or 8 years ago. There is a greater sense of realism and there are still cheap re-possession properties available.

The other countries which are now doing reasonably well are the UK and Ireland. And what do these two plus Spain have in common? Governments of the Right and centre-right which have imposed austerity measures after years of over-spending by left-wing governments which buried their heads in the sand, afraid to stand up to their client groups. Not that it has been easy – Rajoy has had to face down regular protests in Madrid and the youth unemployment in Spain has been horrific. Let us hope that history places the blame for this squarely on the complacent governments which failed to rein in spending, and not on those prudent administrations forced to clear up the mess.

Ed Miliband and Ed Balls have demonstrated time and again that they have not learned the lesson. It would be a tragedy for Britain if they were allowed, practically by default, to make all the same mistakes again.

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