Spain: Is growth without stability possible?


Joan Tapia (Barcelona) | The possibility of new elections in November is beginning to sound the alarm about the ability of Spanish political parties to form coalitions. The Spanish economy is an animal of great strength which, once set going, is resistant and difficult to stop. So said to me a few months ago a distinguished Spanish economist who presides over one of the most respected think tanks.

It should be an accurate affirmation because it is the only way to explain how the current expansionary cycle of the economy – with significant reductions in unemployment and increases in GDP superior to the rest of Europe – has coincided with long political instability, which began in the 2015 elections when the PP of Mariano Rajoy went from a comfortable absolute majority to 123 deputies and ended the bipartisan domination of Spanish politics. Since then – despite general elections brought forward in 2016 and 2019 – there has been no government with a clear majority. And so we continue despite Pedro Sanchez´ victory in the April elections, facing an investiture which looks much more complicated now than it did after the general election and the European, regional and municipal elections in May.

What has happened? Since the disappearance of the traditional Catalan pivot, because of its conversion to separatism – the Basque pivot remains, but is less numerically relevant – the so-called national parties (now five) have shown little flexibility and even less capacity to reach agreements. Spain has shown through almost four complete years (end of 2015 – middle of 2019) that prolonged government instability (and the subsequent absence of serious economic measures) did not alter a pretty virtuous expansionary cycle. Fantastic, but … how long can this period, which we could call miraculous, were the term not devalued, last? Could the Spanish “miracle” of the last four years of growth despite government instability, as well as the constitutional crisis provoked by the anomalous situation in Catalonia, go up in smoke?

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.