April 18 (Bloomberg) -- Spain’s economic woes are
triggering renewed fears over a potential default in the euro
area, and much of the blame belongs to labor laws that date back
to the dictatorship of General Francisco Franco. Unless the
government succeeds in changing them, it’s hard to see the
country returning to healthy growth even if it manages to stay
solvent.
Spain is by now notorious for having the highest
unemployment rate in the European Union, especially among the
young -- every second Spaniard under the age of 25 is looking
for a job. It would be simplistic, of course, to attribute
Spain’s severe economic contraction and rampant unemployment to
any one cause, but the labor market is a useful place to start.
It has taken the financial crisis to force an ambitious attempt
to address the problem.
