When the global economic financial crisis pushed Spain into its now-endemic slump five years ago, the answer had been to rev up public spending to push the economy out of the doldrums. As Bloomberg writes, that approach was “like revving the engine if your SUV as it careered off a cliff.” By May 2012, the deficit was past 11 percent and Prime Minister Jose Luis Rodriguez Zapatero was out of a job. Since then, Spain has gone through a 32-month austerity drive devised by German budget hawks. And while the deep cuts in spending have indeed gone a long way to balance Spain’s books, they have left the government with serious economic contraction, government debt at 85 percent of GDP, 26 percent (!) unemployment and a clear signal that you can’t cut your way to growth. How will Spain move forward? Plenty are waiting for an answer.

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