Social cohesion and state in times of austerity

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Social cohesion and state in times of austerity

  1. 1. Friedrich Ebert Stiftung Nicosia, 5th of October 2013 José Moisés Martín Carretero
  2. 2. 6,0 4,0 1st phase (Gov. PSOE): EXPANSIVE POLICIES GDP Employment 2nd phase: (Gov. PSOE): BIAS TO AUSTERITY 3rd phase: (Gov. PP): STRONG AUSTERITY AND HARD CUTTINGS 2,0 0,0 -2,0 -4,0 -6,0 2007Q1 2007Q2 2007Q3 2007Q4 2008Q1 2008Q2 2008Q3 2008Q4 2009Q1 2009Q2 2009Q3 2009Q4 2010Q1 2010Q2 2010Q3 2010Q4 2011Q1 2011Q2 2011Q3 2011Q4 2012Q1 2012Q2 2012Q3 2012Q4 2013Q1 -8,0
  3. 3. 2009Q1 2009Q2 2009Q3 2009Q4 2010Q1 2010Q2 2010Q3 2010Q4 2011Q1 2011Q2 2011Q3 2011Q4 2012Q1 2012Q2 2012Q3 2012Q4 2013Q1 2008Q1 2008Q2 2008Q3 2008Q4 Domestic Demand External Demand GDP 6,0 4,0 2,0 0,0 -2,0 -4,0 -6,0 -8,0 -10,0
  4. 4. Revenues Expenditure 50 48 46 44 42 40 38 36 34 32 30 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
  5. 5. Employment (thousands) (left axis) Unemployment rate (right axis) 21.000 30 20.000 25 19.000 20 18.000 15 17.000 10 16.000 5 15.000 0
  6. 6. 2008 3,6 5,1 4,8 Inflation (ICP) Real wage increase in collective agreements Real wage costs Real labour costs 2010 2,2 0,9 0,4 2011 2,4 0,3 1,2 2012 1,4 -0,5 -0,6 4,1 Wage increase in collective agreements Wage costs Labour costs 2009 2,2 3,2 3,5 -0,3 1,8 3,2 2,4 -0,5 2,5 0,4 -0,8 -0,9 0,9 0,7 3,5 3,8 -0,8 -1,4 -2,8 -2,0 -2,9 -2,9 Compensation of Employees. Cumulative change 2010-2012 Greece Spain Portugal Ireland Slovenia Italy Cyprus Netherlands Euro area Estonia France Slovakia Belgium Finland Austria Malta Luxembourg Germany 10,0 5,0 0,0 -5,0 -10,0 -15,0 -20,0 -25,0 -30,0 -35,0
  7. 7. Spain has sistematically underestimated the budget for unemployment Average benefit per day has decreased
  8. 8.     Internal devaluation has led to a wage reduction and worsening income distribution. Internal demand is depressed. In spite of efforts, Public deficit still being far away from Stability Pact target. Social budget cuts rather than social model modernization. Worst still to come. Decrease of household disponsable income, and higher inequality of income, led to an increase of poverty and social exclusion.

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