Círculo de Economía describes stagnation of Spanish economy

spain foreign policy

Fernando González Urbaneja| The government’s official discourse is unequivocal: Spain is doing well, the economy is doing very well. Vice-president Calviño comes out insistently with the concept of “leadership” to illustrate every decision of the government in economic and social matters. Gender parity means leadership; the Iberian exception is leadership; the growth of employment and GDP means leadership and so on and so forth.

According to the government, Spain is emerging from the crises, from the polycrisis, with leadership, ahead of Europe, as a reference for the others, etc. It is a legitimate discourse, with a strong electoral flavour, and with the tinge of self-esteem that characterises the prime minister and, consequently, his subordinates.

With the same legitimacy, the Círculo de Economía published this week one of its “Opinion Notes” (May 2023), which are usually characterised by their measured and well-founded appraisals. In this case, the note is entitled “Reactivating the Future”, appealing to the urgency of rectifying the policies and strategies of the last two decades, characterised by the stagnation and even impoverishment of Catalonia and Spain with respect to Europe.

The critical figure to which the Circle appeals is that of Spanish (and Catalan) per capita income, which has fallen eight points below the European average over the course of the 21st century, from 91% to 83%. The figures for Catalonia are even worse: from 20% above the European average at the end of the 20th century, it has fallen to just one point above. Spain is bad, and Catalonia is worse.

The data are indisputable, seen in the long term, two decades of disruptions and uncertainties due to a financial crisis (2008), a pandemic (2020) and a war in Europe (2022). But all these vicissitudes have been common to all European and world societies; this is a global transition that imposes new demands and strategies.

The government’s discourse ignores the global vision and blames the PP governments (Rajoy, 2011-2018) for the setback. The Círculo’s document does not dwell on who is to blame or who is responsible; it limits itself to noting the stagnation (or rather regression) and calling for a rectification in order to create “optimal political environments” that require certain consensuses and competent management. With respect to the structural reforms of the legislature: in labour, pensions, and housing, it considers that all of them are halfway to recovering real growth that reduces differences.

The Círculo’s moderate note has gone unnoticed in the pre-electoral climate of urgency that conditions the political and news agenda. In any case, the sensation of two lost decades of stagnation and reduced expectations is a fact to be taken into account.

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The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.