Spain, gripped by a deep recession, is no longer perceived as a land of oportunidad by people from other countries. The nation’s population fell last year for the first time since records began in 1971, and the main reason was an 18 percent increase in the number of foreign nationals leaving the country. Romanians, Moroccans, and Ecuadorians led the way out.
Emigrants from Spain outnumbered immigrants (PDF) by a little over 160,000 in 2012, according to the National Institute of Statistics. (The report is in Spanish.) That outflow more than offset natural population growth of 48,000—which has been suppressed for years by Spain’s low birth rate.
Spain’s economy has shrunk 1.4 percent over the past year and its unemployment rate in June was 24.6 percent. Youth unemployment is over 50 percent. In the latest blow, borrowing costs are edging back up as global investors demand higher yields to compensate for the expected wind-down of monetary stimulus by the Federal Reserve. Yields on 10-year government bonds, which fell from 7 percent a year ago to 4 percent in May, have climbed back to 5 percent.
Italy, which has even more debt outstanding than Spain does, has also suffered a backup in bond yields. According to Britain’s Telegraph, Italian bank analyst Antonio Guglielmi of Mediobanca (MB:IM) told clients that Italy will “inevitably end up in an EU bailout request” within six months unless its borrowing costs fall and its economy recovers.
Portugal’s 10-year borrowing cost on the open market has jumped to nearly 6.9 percent, far higher than the country can afford to pay over the long term, economists say.
With troubles like this in Southern Europe, it’s no wonder that many of the foreigners who came looking for work are going home.