The pain in Spain

London

SPAIN is the eurozone's latest poster child for austerity and structural reforms. Its economy has expanded for eight consecutive quarters, steadily gaining momentum and easily outperforming the rest of the currency union. Export growth has matched that of Germany; unemployment has fallen by over a million people in two years; investment is picking up; and industrial production has jumped 5 per cent in the last 12 months.

But Spain's recovery is not quite what it seems, and there is scant evidence that what progress the country has made is the result of austerity and reforms.