Zapatero and the Economic Collapse of Spain

The continuing collapse and economic malaise that has driven Spain to economic conditions reminiscent of the 1930's and is similar to Obama's choices. The Economist spells it out in even clearer terms in a profile of Zaptero and his short term political decision which all but guarantee the continued decay of the Spanish economy:

In clearing his desk, Mr Zapatero pulled off a couple of deals that will shore up his position. First, he clinched an agreement over changes to the financing of Spain’s autonomous regional governments (see article). This will give more money to Catalonia, and should earn him the backing of Catalan nationalist parties for the budget vote in parliament in the autumn. Without their support, the budget might bring down his government, since his party lacks a parliamentary majority. Second, he sided with the trade unions to block demands from business leaders to reform Spain’s two-tier labour market. That has seen off the risk of a general strike.For all their tactical political deftness, these agreements carry an economic cost for Spain. They are, alas, typical of Mr Zapatero’s way of governing. By his refusal to countenance unpopular measures and his habit of showering public money on any problem, he risks prolonging the recession.

Permanent unemployment and social decay, that is the legacy of the left. And how bad is it getting:

An initially strong fiscal position is rapidly eroding, with the budget deficit heading for 12% of GDP this year. If growth remains elusive, investors will soon demand a higher return on the government’s bonds. But Mr Zapatero is spending regardless. Catalonia had something of a case for a bigger slice of the cake. But it looks as if the regional financing deal will add another percentage point of GDP to the deficit.

Not Sustainable.