STOCK MARKET WATCH -- Tuesday, 22 May 2012

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51. Is the sun setting on Spain as a brand?

http://elpais.com/elpais/2012/05/13/inenglish/1336914979_545825.html

If you look it up in the archives, the expression marca España, or Spanish brand, appeared in this newspaper for the first time in 1985, in a column written from the United States by writer, journalist and economist Vicente Verdú. In it, he predicted that the country would soon be in vogue. "Spain is an entire world ready to be sold," he wrote. The Catalans were promoting their cavas abroad, and La Rioja wines and Lladro figurines were establishing a presence in international markets. Nancy Reagan was photographed dancing flamenco on an official visit to Madrid. "Everything counts in defining a brand, but it's also crucial to break away from the old stereotypes of Easter week and Hemingway to offer something new and surprising," said Verdú.

This period was followed by the Barcelona Olympic Games, which marked the beginning of the internationalization of larger Spanish companies and a period of economic development that turned Spain into a positive example for countries joining the European Union. Per capita income reached the EU 15 average, the population swelled by six million people, the number of universities skyrocketed and for 14 consecutive years, starting in 1995, the economy grew by an average of 3.5 percent a year. The grand finale was the housing boom, when international experts officially christened Spain's "economic miracle."

Now, Spain is in its fourth year of crisis, with 5.5 million people unemployed and a second recessionary dip. The economy is also witnessing the deterioration of the intangible: its brand. This can be seen in concrete figures in the financial markets but also in more indeterminate aspects, such as the reemergence of the old clichéd images of wine and flamenco, or in the disdain of European leaders such as Nicolas Sarkozy and Mario Monti for their Spanish neighbor. Spain is no longer in vogue; Spain is trading low.

"Nobody wants to be like Spain now. Spain is only good for flamenco and red wine," Richard A. Boucher, the deputy secretary general of the Organisation of Economic Cooperation and Development (OECD), said a few weeks ago. He made the comments at a seminar in Marseille organized by NATO's Parliamentary Assembly, and in the presence of Socialist lawmaker Diego López Garrido, the Spanish representative in the forum. "At a cocktail gathering later, representatives of various countries, including Canada, Germany, Portugal and France, approached me to express their condemnation of his words, and Boucher later sent a letter of apology. There is a disparity between Spain's economic woes and the deterioration of the country's international image, of its credibility, and this loss of prestige is costing us a lot of money," says López Garrido, former secretary of state for the European Union. Garrido called for greater "non-partisan solidarity" in defense of Spain.