Spain’s Wilting Economy Still Held in Franco’s Grip

April 18 (Bloomberg) -- Spain’s economic woes aretriggering renewed fears over a potential default in the euroarea, and much of the blame belongs to labor laws that date backto the dictatorship of General Francisco Franco. Unless thegovernment succeeds in changing them, it’s hard to see thecountry returning to healthy growth even if it manages to staysolvent.

Spain is by now notorious for having the highestunemployment rate in the European Union, especially among theyoung -- every second Spaniard under the age of 25 is lookingfor a job. It would be simplistic, of course, to attributeSpain’s severe economic contraction and rampant unemployment toany one cause, but the labor market is a useful place to start.It has taken the financial crisis to force an ambitious attemptto address the problem.