The Daily Telegraph’s Jeff Randall on what joining the euro has meant for Spain:
As historians begin to assess damage from the credit crunch, Spain will surely be singled out as a classic study for what can go wrong inside a monetary union when the policy requirements of its members become hopelessly misaligned. It is simply not possible to pursue the best interests of every participant when some nations are running trade and fiscal surpluses while others clock up huge deficits.
Ten years after it was launched, the euro is propelling Spain towards disaster. In giving up control of domestic interest rates to the European Central Bank, Madrid handed over a vital instrument of macroeconomic management. It is learning to regret that…
The Spanish economy is weak; it needs lower interest rates and a softer currency. Such a prospect, however, doesn’t suit Germany, the eurozone’s dominant force, so Madrid has to sit and suffer while its people cry for help…
Adding to Madrid’s woes is the extraordinary influx of five million immigrants, who boosted the population by about 15 per cent between 1998 and last year. It was always assumed that in tough times many would return home. But for penniless fruit pickers from Africa, life in Spain, even in the harshest economic climate, is often better than what they left behind. The number of foreigners claiming dole payments has doubled and there are mounting tensions as native job-seekers slip down the food chain.
The “one size” currency does not fit all, and I might add that that other EU staple, mass immigration, does not fit any.