Will Spain be next?
A few years ago, I was talking to a Spanish friend from Madrid who exports to the U.S. He complained then about the "euro." He said the euro was killing Spanish exports or making them more expensive in the U.S.
He longed for the days when Spain had its own currency ("la peseta") and could manage its own economy.
Wonder what he is thinking today! My guess is that he is happy with the U.K. vote.
My sense is that the EU has been good to Germany but not to those smaller countries who depend on trade or tourists, such as Spain.
Exports to the U.S. are a major portion of the Spanish economy:
Exports from Spain amounted to US$283.3 billion in 2015, down by -5% since 2011 and down -11.1% from 2014 to 2015.
Spain’s top 10 exports accounted for 57% of the overall value of its global shipments.
Based on statistics from the International Monetary Fund’s World Economic Outlook Database, Spain’s total Gross Domestic Product amounted to $1.636 trillion in 2015.
Therefore, exports accounted for about 17.3% of total Spanish economic output.
My friend would argue that the euro is the reason that exports to the U.S. are down.
He is not alone, as we can see in this 2015 BBC report I read last year:
As Spain emerged, under-developed and economically weak, from the isolation of the Franco dictatorship, the EU was seen as its benevolent benefactor.
Now, six years into an economic crisis which has left 27% of the population unemployed, it is viewed as the belligerent bully which is forcing Spain to its knees with austerity measures.
Since 2007, Spanish approval of the EU has almost halved.
It's fair to say the benefits of the EU were oversold to a Spanish nation yearning for modernity a decade ago.
During the Franco years, the trains ran on time, and the streets were extremely safe. At the same time, he isolated Spain from globalism and progress.
Will Spain be next? Time will tell, but don't be surprised if it does. The Brits have a lit a fire, and it will spread quickly.
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