Editorials
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Headed for recovery

Social security registrations in February confirm that the recession is finally over, but the situation is still weak and unstable

The new statistics on unemployment and registrations with the Social Security system in the month of February are evidence that the recession lies behind us and that the Spanish economy is heading into a phase of recovery. The fact that registrations have seen a slight upturn in year-to-year rates, of 0.38 percent, and that the number of registered unemployed has fallen by 4.5 percent in a year is an excellent indicator that, however, will have to be confirmed and contextualized with other labor-market variables when the results of the first quarter's Active Population Survey (EPA) are released. Elementary prudence suggests that we wait at least a quarter before fully accepting the idea that the Spanish economy has proceeded into a different cycle.

It is an unquestionable fact that the macroeconomic variables have significantly improved, particularly the rate of growth, and that this improvement may reasonably be said to point to 2014 being a year of transition toward a phase of recovery. Nor is there room for doubt that the labor market no longer displays the trend toward continued destruction of employment that has kept Spanish society in the grip of anxiety since the acute stage of the crisis began, in 2009. This development, at last in a favorable sense, has much to do with Spanish companies' desire to survive, and with the sacrifices made by all citizens who have carried the costs of the crisis.

But it is no less true that the labor market remains in an uncertain phase: short-term job contracts still play an overwhelming role in new hiring, though this improved in February; and the number of unemployed with no aid in sight is still on the rise. The question is how to activate policies to reduce the excessive burden of unemployment subsidies on the public accounts and the drag of unemployment on the general economy, where it considerably erodes the vigor of consumption.

Economic recovery requires the prior requisite of financial stability

In this sense, the Economic Forum in Bilbao has been enlightening. There we have heard two versions of the current status of the Spanish and European crises. On the one hand, the prime minister, Mariano Rajoy, saw the forum as a chance to claim that Spain is in a phase of recovery; on the other, a number of more cautious observers of the conjuncture - notably representatives of the International Monetary Fund and the Organization for Cooperation and Economic Development, Christine Lagarde and Ángel Gurría, respectively - were in agreement on one basic idea, which each of them expressed in their own manner: growth is still too low, and unemployment too high. This is a prudent reminder.

Both are also well aware that economic recovery requires the prior requisite of financial stability, from which Spain is still a way off. The set of demands addressed to the European Union, calling on it to adopt unconventional monetary measures, is all very well, provided that the government's policy is consistent and that it also implements unconventional measures to stimulate employment.

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