Harvard professor of economics Carmen Reinhart stated that high unemployment rate will continue in Spain during about 10 years after the actual financial and economic crisis is over – and the crisis is not even close to be over yet. In a conference held in Spain last Friday, Reinhart said that the actual unemployment rate in Spain – which is of about 28% in general and more that 50% as far as young people is concerned – would eventually return to the level of 2008 ten years after the Spanish economy starts to grow again. So, we are practically talking here of two decades.
It is difficult or even impossible to conciliate a so high unemployment rate for a twenty years period, in one hand, and in other hand political stability and even democracy. Spain has already an internal “war” going on regarding Catalonia claims for independence, and is predictable that other ethnic nations inside Spain will follow a similar path to independence claims, such as the Basques and the Galicians. If, on top of the nationalistic crises and national dismemberment, Spain would have a ugly economic crises with high employment rates, then it is a nobrainer that a very dangerous and poisoned political broth is been cooked by the European Union and the Euro in Spain.
Countries like Portugal, Spain, Italy, and even France should leave the Euro-zone, create together a new currency and offer the Euro currency to the Germans alone. Greece and Ireland would be welcome to the new currency too, which would have a more adequate monetary policy. The alternative to the currency split in Europe is chaos and even low scale civil war in Spain which will lead eventually to an authoritarian political regime again. And please remember: every political event happening in Spain affects Portugal in a direct or indirect way, as both countries are neighbors. The European Union is actually playing with fire.