Although we all want to be optimistic, the reality is that the first months of 2010 are going to be tough in Spain due to the growth of unemployment, the problems in financial institutions, the lack of major decisions by the Government, the paralysis of the real estate sector and the great difficulties in consumption. If we add to that a general feeling of mistrust, it seems that the perfect storm will continue to install in our country in 2010.
This whole situation has not been caused by the international financial crisis but by a fundamental problem that remains to be resolved: Spain is not very competitive internationally, except in a few sectors, due to a high cost model for the level of innovation that our companies offer.
Delving into what will happen in the coming months, unemployment will continue to grow due to the large number of temporary Employment Regulation Files that are going to become definitive, to the need to restructure some sectors (for example the financial sector) and the continuation of bankruptcy proceedings and liquidations of many companies that are not taking the necessary measures.
This growth in unemployment and the general distrust, will cause consumption to continue difficult due to the phenomenon known as the negative spiral, that is, when the general economic problem is not solved, unemployment grows. As unemployment grows, consumption contracts. As consumption contracts, companies suffer that continue to destroy jobs. And so on.
To all this, it must be added that the Spanish financial system is facing a year with significant problems due to the quality of assets on its balance sheets, difficulties in business and margins, debt maturity obligations and the increase in delinquency. In addition, a merger race between savings banks has started to solve the problem that will have a very high cost for taxpayers and with results that are unknown.
In addition, at the micro level, we find many companies adrift, suffering losses month after month and that are consuming all the resources they have generated in the boom years. In this sense, I am concerned about a feeling of "wear" that I see every day among entrepreneurs and managers. When someone rows against the current without being very clear about the destination, in the end they end up lowering their arms.
It seems that the only good news is that the behavior of the European countries does show a clear recovery (although still weak) and one might think that there may be a certain drag effect in the sectors where we are exporters.
Therefore, we have not yet hit bottom. The worst of the situation will come during the first half of 2010 and afterwards, we will be quite a few quarters without growth since there are no companies or sectors that are postulated as clear engines of the economy.
Is it all dark? No, I think there are many opportunities to improve. The Government can change the course by making big decisions and companies must generate in three main aspects: internationalization, improved management and achieving greater size. But this gives for another article!
