The euro made life dearer and gutted Spain's industry
The euro tripled the price of bread and destroyed factories, but without it Spain would be Argentina. Data analysis and clashing views.
English · Original discussion in Spanish · Published
The euro made life dearer and gutted industry: plunder or lifeline?
Joining the euro was an act of industrial surrender that has impoverished Spain, according to a growing body of analysis. Bread that cost 100 pesetas now costs 300: a tripling that is no coincidence. But the story is more complex: without the euro, Spain would probably be Argentina today.
The price shock and the loss of monetary sovereignty
With the peseta, Spain could devalue to make its exports cheaper and keep industrial jobs. The euro removed that safety valve. The single currency, designed for economies like Germany's, overvalued Spanish competitiveness. The result: soaring prices and factories closing. From shipbuilding to steel, entire sectors disappeared. Today Spain lives off tourism and cheap labour, while euro rules prevent rebuilding the productive base. European funds, far from being grants, are earmarked loans that get spent on Siemens trains and other German products.
The counterpoint: the Argentine mirror and forced discipline
Yet the alternative was no bed of roses either. Those who defend membership recall that the peseta was already a weak currency, subject to periodic devaluations that punished savings. Spain has accumulated thirteen sovereign defaults in its history – the first in 1557 under Philip II – a world record. The EU has imposed a discipline that, though painful, has prevented hyperinflationary collapse. Countries like Argentina, with their own currency and bad policies, illustrate the likely fate: debt, poverty and isolation.
What to do? The dead end
Leaving the euro today would miccionan a post-war shock: sky-high energy, brutal devaluation and years of sacrifice. Staying without reforms perpetuates a model of cheap services and mounting debt. Meanwhile, Spain's elites look to Latin America and corruption devours the funds. The decision, like so many others, is postponed. But the uncomfortable question remains: how much longer can Spain be the "Bolulandia of the European Cono Sur"?
Joining the euro was an act of industrial surrender that has impoverished Spain, according to a growing body of analysis. Bread that cost 100 pesetas now costs 300: a tripling that is no coincidence. But the story is more complex: without the euro, Spain would probably be Argentina today.
The price shock and the loss of monetary sovereignty
With the peseta, Spain could devalue to make its exports cheaper and keep industrial jobs. The euro removed that safety valve. The single currency, designed for economies like Germany's, overvalued Spanish competitiveness. The result: soaring prices and factories closing. From shipbuilding to steel, entire sectors disappeared. Today Spain lives off tourism and cheap labour, while euro rules prevent rebuilding the productive base. European funds, far from being grants, are earmarked loans that get spent on Siemens trains and other German products.
The counterpoint: the Argentine mirror and forced discipline
Yet the alternative was no bed of roses either. Those who defend membership recall that the peseta was already a weak currency, subject to periodic devaluations that punished savings. Spain has accumulated thirteen sovereign defaults in its history – the first in 1557 under Philip II – a world record. The EU has imposed a discipline that, though painful, has prevented hyperinflationary collapse. Countries like Argentina, with their own currency and bad policies, illustrate the likely fate: debt, poverty and isolation.
What to do? The dead end
Leaving the euro today would miccionan a post-war shock: sky-high energy, brutal devaluation and years of sacrifice. Staying without reforms perpetuates a model of cheap services and mounting debt. Meanwhile, Spain's elites look to Latin America and corruption devours the funds. The decision, like so many others, is postponed. But the uncomfortable question remains: how much longer can Spain be the "Bolulandia of the European Cono Sur"?
Also available in: Deutsch
Summary of a discussion on Burbuja.info - Foro de economía, actualidad y política., translated from Spanish and reviewed before publication. Read the full discussion (97 replies).
More summaries
-
Santiago rents rise 11.6% despite price caps
Average rent in Santiago, Spain, hits €704 with the region's steepest increase despite tourism bans and rent controls.
-
German supermarkets aren't cheaper: salaries are
Eurostat ranks Spanish meat 20% cheaper than German. The problem isn't the supermarket: it's wages.
-
AI-driven decompilation threatens proprietary software giants
Amateur groups use AI to decompile Adobe suites, cloning commercial apps in days and shaking the software industry.
-
Spanish party Sumar wants to ban rentals without air conditioning
Sumar proposes requiring air conditioning in all rental properties in Spain. We look at the cost, the climate contradiction and the impact on rents.
-
Feminist regrets that her son is heterosexual
A feminist activist said on television that she regrets her 3-year-old son appears to be heterosexual. Her wish to impose a sexual orientation on a child has sparked controversy.
-
Coordinated border crossing into Spain: cars burned and thousands surge through
Cars burned and shops shut down: a mass crossing from Morocco overwhelms the border and leaves figures that simply do not add up.