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ECONOMY

Rajoy pledges economic boost if ‘normalcy’ returns to Catalonia

Spanish Prime Minister Mariano Rajoy pledged on Saturday that the country's economic growth could reach three percent next year, well ahead of forecasts, if Catalonia returns to "normalcy" after the region's secessionist drive.

Rajoy pledges economic boost if 'normalcy' returns to Catalonia
A man holds an Catalan pro-independence Estelada flag while others hold placars reading "Freedom" during a demonstration in Barcelona last month. PHOTO: JOSEP LAGO / AFP
At the height of the Catalan independence drive in mid-October, the central government in Madrid had lowered its 2018 growth forecast to 2.3 percent from 2.6 percent, a marked decline from the 3.1 percent expected for 2017.
 
“If we recover normalcy, stability and calm, this 2.3 percent growth will be three percent next year,” Rajoy said at a meeting of his conservative Popular Party (PP) in Mataro, near Barcelona.
 
Madrid has ordered new regional elections for Catalonia on December 21 after ousting the government of former Catalan leader Carles Puigdemont and suspending the parliament over the independence bid.
 
International agencies including the IMF and the OECD have warned of the financial fallout of the crisis for the eurozone's fourth-largest economy.
 
Catalonia generates about 20 percent of Spain's GDP, and tourism along with retail and new car sales slowed in October after the parliament's declaration of independence.
 
The campaign for the new elections officially opens on Tuesday and opinion polls show that pro- and anti-independence forces are running neck and neck, an outcome which could make it difficult to form a viable regional government.
 
During the last elections in 2015, Rajoy's PP obtained just 11 of the 135 seats in the Catalan parliament.

ECONOMY

Spain’s middle-class youngsters the most likely to end up poor across all EU

Spain leads the ranking of EU countries with the highest risk of young people ending up in poverty as adults, despite coming from families without economic difficulties.

Spain is the fourth EU country with the highest inherited poverty
Spain is EU country with most middle-class young people who end up poor. Photo: Jaime ALEKOS / AFP

Spain is also the fourth EU country with the highest rate of inherited poverty risk, according to Eurostat, the EU Statistical Office.

Data on intergenerational poverty indicates that there is a correlation between the financial situation of the household you grew up in and the risk of being poor when you reach adulthood and in Spain, there is a strong link. 

The latest statistics available from 2019 show that the at-risk-of-poverty rate for the EU was 23 percent among adults aged 25 to 59 who grew up in a poor financial situation at home when they were 14 years old. This is 9.6 percentage points more than those who come from families without financial problems (13.4 percent). 

READ ALSO: Spain’s inflation soars to 29-year high

How the situation in Spain compares with the EU

Spain has become the EU country with the highest risk of poverty among adults who grew up in families with a good financial situation  – 16.6 percent.

This was followed by Latvia with 16 percent and Italy with 15.9 percent.

That statistics also show the countries where it is less likely to be poor after growing up in households without economic difficulties. These include the Czech Republic (5.9 percent), Slovakia (7.9 percent) and Finland (8.5 percent).

The overall poverty rate in the EU decreased by 0.1 percentage points between 2011 (13.5 percent) and 2019 (13.4 percent), but the largest increases were seen in Denmark (1.9 points more), Portugal (1.8 points), the Netherlands (1.7 points) and Spain (1.2 points).  

On the other hand, the biggest decreases in the poverty rate were seen in Croatia (-4 percent), Lithuania (-3.6 percent), Slovakia (-3.5 percent) and Ireland (-3.2 percent).

READ ALSO: Spain’s government feels heat as economic recovery lags

Inherited poverty

The stats revealed that Spain was also the fourth country with the highest rate of inherited poverty risk (30 percent), only behind Bulgaria (40.1 percent), Romania (32.7 percent) and Italy (30.7 percent).

This means that children of poor parents in Spain are also likely to be poor in adulthood. 

The countries with the lowest rate of inherited poverty risk were the Czech Republic (10.2 percent), Denmark (10.3 percent) and Finland (10.5 percent).

The average risk-of-poverty rate for the EU increased by 2.5 percentage points between 2011 (20.5 percent) and 2019 (23 percent), with the largest increases seen in Bulgaria (6 points more), Slovakia and Romania (4.3 points), Italy (4.2 points) and Spain (4.1 points).

The biggest drops were seen in Latvia (-8.5 points), Estonia (-8.0 points) and Croatia (-2.3 points). 

The largest gaps in people at risk of poverty when they reach adulthood were in Bulgaria (27.6 percentage points more among those who belong to families with a poor economic situation as teenagers compared to those who grew up in wealthy households), Romania (17.1), Italy (14.8), Greece (13.5) and Spain (13.4).

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