It’s almost certain that the Catalan crisis will prevent the Spanish budget from being approved, which will be a blow to political stability and the duration of the current legislature.
Articles by Joan Tapia
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On the day when Catalonia votes for a new government, the region’s citizens are very confused about the reasons and where the blame lies for the situation they find themselves in.
The outcome of the Catalonia elections on December 21 will not easily bring a quick solution to the problem in the region. But both in the case of the independence movement losing the majority of seats (it no longer had the majority of votes and it’s almost impossible for it to obtain) or there being a division over the future, the path towards normalisation will have started.
We have reached the next stage in the Catalan crisis. Rajoy’s government – with the agreement of Pedro Sánchez and the Cs – has requested that Catalan president Puigdemont clarifies whether or not there has been a declaration of independence. Otherwise, article 155 of the Constitution will be implemented, implying a limitation on the region’s autonomy. Against this backdrop, Spaniards’ confidence is being eroded.
The predicted train crash between the Catalan and the Spanish governments has now happened. But what’s next? It’s difficult for the referendum to be a success, but the the fact there is no independence in the short-term, doesn’t mean that the train crash is not going to have consequences in the medium-term.
A survey by the Family Business Institute, which groups the big Spanish companies together, and the CIS’ economic confidence barometer show that people are confident about the outlook for the economy. But the political panorama is a different story. They are more wearied by the political tension and corruption than by the conditions of their daily lives.
Spain’s 2017 budget leaves little room for manoeuvre. It represents exactly 39%, the percentage the state can freely make decisions on what do with from what it raises and borrows. It shows that, despite the fact the economy is doing well, we have a lot of problems.
Since the beginning of 2014, the Spanish economy has been recovering from a very tough crisis – unemployment jumped from 8% in 2008 to 26% at the start of 2014 and has now fallen to 18.9%. This is in part thanks to the ECB’s extremely expansionary monetary policy and low interest rates. Now after Donald Trump’s victory, everything could become unstable.
It’s embarrassing that the PSOE is saying the labour reform has been negative and that the PP is promising to lower taxes when Spain has to negotiate new spending cuts with Brussels.
With less than 50 days to go to the general elections, which perhaps may be more decisive than on other occasions, and the Catalan Parliament voting on the start of the secession from Spain, neither economic nor political confidence is faltering.