Spain: deceleration slowing down

Pedro Sánchez falls short of majority but will likely prevail tuesdaySpain's acting PM holds talks with Catalan independentists of ERC to unlock political stalemate.

Joan Tapia | The latest data indicate that the economic slowdown in Spain is showing some signs of reversing. That is, the slowdown is slowing down and that the economic situation in the coming months may be somewhat better than expected by some of the most pessimistic analysts.

Solvent and independent organizations such as the Bank of Spain, AIRef, Funcas and other private services are also taking minutes of the deceleration of the deceleration. Across Europe, the maintenance of growth in the third quarter (2% per year in Spain and 1.2% in the euro area) has been the key element of this climate change. And the Bank of Spain itself confirms the best outlook when it believes that with the available data, quarterly GDP growth in the fourth quarter can continue at 0.4%, which would mean an annual rate of 2% and a better start to 2020 , for which the expected is a growth of 1.5%.

As for employment, the latest data indicate that the evolution is still positive. Funcas estimates that, in seasonally adjusted terms, in November – a seemingly bad month – there were 22,000 new Social Security affiliations, which means an annual rate of employment increase of 2.3%. According to Raymond Torres, director of Funcas, this indicates “an unprecedented capacity for resistance in the labor market” that undoubtedly supports the consumption of families.

It is true that the investment and industry data are not as positive but pessimistic analyzes of recent months have lost some virulence. Professor Josep Oliver has published a brilliant article, “Winds of face and strongholds in the background” (La Vanguardia, December 8), which shows that the situation of both foreign debt and balance of payments or private debt the Spanish economy is much stronger than in 2008.

The misfortune is that this slight recovery of economic optimism has no correspondence in the political field, as the result of the 10-N elections and the subsequent movements of the parties indicate a very difficult governance. The socialist party (PSOE) is still the first game and a possible understanding between the first game on the left and one on the right has disappeared almost completely after the spectacular fall of liberal-center right party Ciudadanos (C’s), which has been replaced by far right Vox as a third force with more than 50 deputies.

Former leader of C’s Albert Rivera, who resigned last month, could have been the arbiter of Spanish politics, but his suicidal attitude took him out of play. Bad for Rivera, of course. Bad for those in the business world bet on him. And bad for those who believe that governance would benefit from the abandonment of confrontation.

In this context, any rapprochement between the PSOE and the PP, which has risen but is burdened by the growth of Vox, seems very unlikely today. Acting PM Pedro Sánchez’s scheme, after the rapid agreement with far left party Podemos, is that of an investiture with the votes of the PNV, other small regionalist parties and the abstention of the Catalan separatists ERC. Will this investiture pact be possible? It is not yet known and it is difficult – for the ERC congress and the Catalan situation – that the mystery can be resolved before Christmas.

About the Author

Joan Tapia
Former editor of La Vanguardia, El Noticiero Universal and Spanish public TV channel in Catalonia, Joan Tapia also advised the Minister of Economy and Finance of Spain’s first Socialist Government. One of the country’s most veteran journalists, Mr Tapia also holds a Law degree and founded La Caixa’s Information and External Relations Department. He is a regular columnist for some media outlets both in Catalan and Spanish, and a member of the Royal Academy of Economic and Financial Sciences.