Can Spain keep up with the EU?

In 1986 Spain joined the European Union and immediately began to become a prime example of what a nation can accomplish with a steady continuous high growth performance. Before joining the union, Spain’s per capita income was way below the average for the EU. However, shortly after joining the EU, the nation made a dramatic shift in their per capita income and climbed slightly above the EU’s per capita income. An economist in 2007 by the name of Matilde Mas of the Universitat de Valéncia and Ivie, questioned if Spain would continue to marvel or if the nation’s growth would run out of steam.

Many experts examined Spain’s growth process and pinpointed some weaknesses this process had. Spain’s growth after joining the EU, was too reliant on the additional use of labour and did not have any concern for increasing productivity. Although this process may have helped Spain in the beginning when they first joined the EU, the reliance of additional labour will not be sustainable in the future.

Others argue that Spain’s criticism is not fair because certain caveats exist. Many experts seem to ignore how poor Spain was when they first entered the EU. Still present in Spain’s economy today are the high unemployment rates, the low percent of women in the labour force, the large presence of the primary sector, and the low level of labour qualification. One important source of growth that Spain had was the combination of physical capital and drastic improvements in labour quality. Many economists believe that Spain’s economic growth would be more productive, especially over the long run, if it could transform to having better instead of simply more employment. If Spain could accomplish this, their economic growth could become more intensive and less extensive.

http://www.eurointelligence.com/Article3.1018+M5fffb2fbd30.0.html

n 1986 Spain joined the European Union and immediately began to become a prime example of what a nation can accomplish with a steady continuous high growth performance. Before joining the union Spain’s per capita income was way below the average for the EU. However, shortly after joining the EU, the nation made a dramatic shift in their per capita income and climbed slightly above the EU’s per capita income. An economist in 2007 by the name of Matilde Mas of the Universitat de Valéncia and Ivie, questioned if Spain would continue to marvel or if the nation’s growth would run out of steam.

Many experts examined Spain’s growth process and pinpointed some weaknesses this process had. Spain’s growth after joining the EU, was too reliant on the additional use of labour and did not have any concern for increasing productivity. Although this process may have helped Spain in the beginning when they first joined the EU, the reliance of additional labour will not be sustainable in the future.

Others argue that Spain’s criticism is not fair because certain caveats exist. Many experts seem to ignore how poor Spain was when they first entered the EU. Still present in Spain’s economy today are the high unemployment rates, the low percent of women in the labour force, the large presence of the primary sector, and the low level of labour qualification. One important source of growth that Spain had was the combination of physical capital and drastic improvements in labour quality. Many economists believe that Spain’s economic growth would be more productive, especially over the long run, if it could transform to having better instead of simply more employment. If Spain could accomplish this, their economic growth could become more intensive and less extensive.