Arrived home in Mallorca to gray skies and some rain.  Better than the weekend in Madrid where temperatures dropped to almost freezing and rain fell continually.   The weather reflects the mood of the people who face a seventh straight month of contracting economy and they already had the slowest performer among the large European Union members. 

Hard to be an optimist in a country where the official figures show an unemployment rate of 26% and minus 0.5% growth.  The government is finally taking some measures to control the so-called “black economy” or “submerged economy,” you know, the economy that exists off the books.  Two friends in Madrid had a heated debate about how much this “black economy” affects what is actually happening.  Certainly more people are working than the official unemployment figure would suggest.  And certainly if 25% or more of the work force was really unemployed for over a decade  there would have been a revolution in the streets.  The problem lies in not knowing how many are really not working. 

To get a handle on the “black economy” the government has introduced two new rules.  Any payment exceeding euros 2,500 must be made by bank transfer or check or credit card thus leaving a record.   Also there is a move to eliminate the euro 500 bill.  Both measure seek to cut into the “black economy” which depends on cash transactions.  Most credit card transactions also are automatically tallied to the vendors tax records.

And this is the main problem in Italy and Greece as well.   Hard to govern or lead an economy when maybe one fourth of economic activity bypasses the tax man.