For any economy to grow, you need people to buy things so revenue can go to retailers/producers so they can pay wages and taxes to finance social spending.
People can't buy stuff without money and governments can't provide decent education, health and other social services without revenue from the private sector.
You don't need a degree in economics to work that out.
Currently in Spain and many other European countries there is a high level of unemployment so people have little if any money to spend on anything but the basics and governments are borrowing to fund unemployment and other social benefits. It's a vicious circle.
But it seems there are also deep-seated structural problems in most Western economies. There's no doubt that since the late 1950s 'ordinary' people have seen a rise in their material standard of living. Goods and services once the preserve of the wealthy are now within the reach of most people. It's a rare household, regardless of whether working or on benefits, that doesn't have all the gadgets we now deem 'essential'.
But...and I think this is the crux of it... this increased standard of living has been largely fuelled by credit.
The fact is that wages have for many people not kept up with prices. So, to repeat a slogan used in the 1960s when Barclaycard, which I think was the first major credit card in the UK, consumers on low incomes could , 'Take the waiting out of wanting'. Houses, cars, clothes, holidays, meals out, fuel, even grocery bills were put on the plastic. Nobody seemed to think it strange that the people who actually produced many of these things couldn't afford to buy them without borrowing. Hire purchase was also a new way of buying what you didn't have the money for.
Shareholder profits meanwhile scooped up the 'surplus value'. In the UK, profits were not used to invest in new plant and machinery and instead of collaborating with employers to distribute profits more sensibly and fairly, trades unions, then more powerful, embarked on a confrontation course with what they perceived as the 'class enemy'.
In Spain, which came later to the party, the borrowing went into property. Cheap credit from European, mainly German, banks made Spain the EU nation with the highest % of home ownership, 84%.
The bubble burst, the legendary chickens came home to roost and governments faced spiralling debt as they borrowed to finance the growing numbers of unemployed and to rescue banks from their exposure to bad loans.
I would argue that most of Europe's current woes relate to structural problems. The only EU state that has throughout it all managed to keep its head above water is Germany. A mixture of envy, resentment and hostility prevents some people from looking objectively at Germany's model of comparatively harmonious labour relations, industrial democracy, small scale credit union banking institutions, its famed 'Mittelstand', small to medium size family owned hi-tech export-orientated businesses and it model of a social market economy.
Germany isn't paradise, it too has problems but since 1991 it has assimilated the virtually bankrupt former DDR.
But there are surely lessons we can learn.
