In mid-June, a protest was held on the island of Ibiza against mass tourism. Every year, over three million tourists come to the island and locals are concerned about the consequences: noise, water shortages in the summer, insufficient housing space and rising rents, which have long since rivaled those in Madrid or Barcelona - an average of over 20 euros per square meter. This is fueling inflation, which in the Balearic Islands, of which Ibiza is a part, is higher than in any other region of Spain, writes ARD.
Billions in tourism revenue
On the other hand, tourists bring billions of euros to the country, including on the islands. Data for Ibiza show that tourism revenue exceeds four billion euros. Many of the 150,000 locals make a living from tourism. And most of them are doing very well.
Ibiza is a special place - it has incredibly beautiful beaches and offers a relaxed life, which is making more and more people settle there, the German public media notes. Many foreigners buy holiday properties, but so do Spaniards from the mainland. There are also seasonal workers, some of whom now stay on the island all year round.
Local authorities are taking action against illegal rental properties and plan to build more social housing.
Over three percent economic growth
The economic miracle that Germany is so hoping for is already happening on the Iberian Peninsula. Last year, the economy grew by 3.2 percent, compared with an EU average of just 0.8 percent. This means that Spain is currently the economic locomotive of Europe, along with Malta, Croatia and Cyprus.
How did the fourth largest economy in the EU achieve this? According to expert Ulrike Kastens, this is not only due to tourism: "It is also due to the significant increase in private consumption. Employment has increased, unemployment has fallen and this is stimulating consumption," she tells ARD.
Upturn in almost all sectors, investments are growing
Spain is considered an attractive place for investment for various reasons, says foreign trade expert Friedrich Henle: "Cheap energy, which is also due to the expansion of the renewable energy network, attracts investors. However, companies also point to labor costs, which are lower than in Central Europe, as a favorable factor, as well as the scale of the market, which opens up great opportunities.
However, Henle also sees risks, as there are problems in Spain too: bureaucratic processes can take a long time, and the administration, which is at three levels - the nation state, autonomous regions and municipalities - has its say, which is why companies can expect lower productivity compared to other European countries.
Problems that Germany also faces
Ulrike Kastens adds another touch: "There is a lack of business-oriented policies. And Spain also suffers from limited investment in venture capital.".
Structural reforms are also needed in Spain, while the country must become less dependent on tourism, Kastens recommends. The pandemic has shown the negative effects of this high dependence. "Despite this experience, however, Spain will find it difficult to change its current business model. It needs investments outside of tourism, for example in research and development, where there is significant potential", points out the expert, quoted by ARD.
Spain is going its own way
However, the existing business model works and relies heavily on immigration. It covers the demand for labor in construction, tourism and care for the elderly and the sick. Many of the immigrants are from Latin America, speak Spanish, which is why they integrate easily. This makes Spain a country that is going a different path than that of many other countries in Europe: one million migrants who are already working in the country must quickly obtain a residence permit. This is also aimed at limiting illegal employment by circumventing the tax authorities.
Overall, the general conditions today are much better than before the financial crisis, summarizes Ulrike Kastens to ARD. And despite all the protests, tourism will remain the most important economic factor for the foreseeable future. For the first time this year, more than 100 million visitors are expected.
Author: Antje Erhard (ARD)