STOCK MARKET WATCH -- Monday, 26 November 2012

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47. If you want to see where Spain is headed, take a long look at Jerez

http://elpais.com/elpais/2012/11/21/inenglish/1353507214_212572.html

Jerez, in the southern region of Andalusia, can be viewed as an illustration of all that has gone wrong with Spain over the last two decades: rapid growth based on seemingly limitless borrowing, which has produced a glut of houses and office space that nobody wants. Three years ago the bubble burst, and the local authority has been left with no money. That means it is unable even to pay its utility bills or the cleaning staff in its schools.

To put it simply, Jerez has been living beyond its means. Anybody working in the public sector - or for a company that depends on the public sector - is either on strike, has been on strike, or is likely to be very soon. From one month to the next they have no idea whether they will be paid, or even if they will be left with a job. People were being laid off even before the government introduced new laws to make it easier to fire employees, and the unions have been unable to do anything about it.

Some commentators say that if you want to see where Spain is headed, take a long look at Jerez: ever-declining public services that mean people just have to get on with making the best of what there is.

Around 8pm on a rainy Wednesday at the end of October we meet Moisés Gálvez, the father of one of 7,000 children in the city who haven't been to school that week, and the head of the parents' association of the Manuel de Falla junior school. He tells us that around half of the city's 47 infant and junior schools have been closed this week because of a strike by cleaning staff who haven't been paid. Negotiations are underway, and it is possible, he says, that the strike may be lifted this evening. But then again, it may not. That's the way things are in Jerez right now: nobody knows anything.