Down-time

It is often said that after a good holiday one needs a good holiday to recover and our trip to South America was no exception. However for once we have the privilege of relaxing recovery by eating healthily, going running and walking in the mountains and reading by the pool. In fact we have even been in the pool a couple of times after running. At 10 degrees it is like an ice bath and does wonders for aching legs.

Monte Pego as always is a great place to rest, but is even quieter than usual.  When our house was finished in early 2006 building was still in full swing but construction vehicles are no longer seen here. Fewer people live here too as Brits on fixed sterling pensions return home because the exchange rate isn't what it was while others from all over Europe find that a second home is no longer affordable.  The property boom is well and truly over and a number of nearby new developments exemplify the state of the national economy.  Most aren't even being marketed - there is simply no point in trying to sell them. The Spanish economy was over-reliant on the construction and property sector which has collapsed and the government is struggling to deal with 20% unemployment. Meanwhile the international financial community worries whether Spain can pay it's debts.

Articles blaming American banks or Greece and Ireland for the economic woes were common here in recent months. But now I sense that, at the beginning of 2011, the warm glow of Spain's World Cup win and Rafa Nadal's grand slam tennis titles is finally being replaced by the cold wind of reality. On top of the financial crisis this is also the quietest time of year from a tourist point of view and local businesses have to struggle through to the summer. Many won't make it.  More and more empty shops are appearing and of course the many businesses targeted at UK immigrants (or ex-pats to use the preferred term) have a shrinking market to aim at.

Where this will all end economically is anyone's guess. In times past the Peseta would have crashed making Spanish real estate and holidays cheap and bringing much needed revenue and jobs. But now, tied to the euro, there is no quick devaluation route out of the mess. Unlike the US state of Nevada, which has similar problems to Spain, there is no federal government to finance the pension deficit and of course cultural and language differences make moving countries to find work difficult for most. So Spain has the disadvantages of monetary union without the benefits of political union and the government is virtually powerless to take action, short of the doomsday scenario of pulling out of the Euro.

So around us the economic suffering looks set to go on for a long time but at least the sun is shining, Rafa is still winning and the Spanish national team are still world champions.  If only the Irish and Greeks hadn't got us into this mess...