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Brain and money drain taking its toll on Spain

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In predictable and understandable fashion, money and brainpower is leaving Spain. Just as we've been seeing in Greece (and the same for younger Italians), those who can leave, are leaving Spain. The bank withdrawals are large, but not large enough to disrupt the banking system. Long term the larger problem is losing the people who are needed to rebuild the economy.

Whether you're a young student, young graduate or even mid level manager who has the option to leave for a more stable environment, wouldn't you? The youth hardly even have any option considering the 50% unemployment rate but the same can be said of the mid level managers who have families. Why would you want to educate your children only to throw them to the wolves when they graduate from university?

The EU may be dumping $125 billion into the Spanish banking system, but that won't change the ugly economic dynamics.

Is staying really even an option for those who have the skills to work elsewhere?
More disturbing for Spain is that the flight is starting to include members of its educated and entrepreneurial elite who are fed up with the lack of job opportunities in a country where the unemployment rate touches 25 percent.

According to official statistics, 30,000 Spaniards registered to work in Britain in the last year, and analysts say that this figure would be many multiples higher if workers without documents were counted. That is a 25 percent increase from a year earlier.

“No doubt there is a little bit of panic,” said José García Montalvo, an economist at Pompeu Fabra University in Barcelona. “The wealthy people have already taken their money out. Now it’s the professionals and midrange people who are moving their money to Germany and London. The mood is very, very bad.”

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