Spain is doing well, is it?

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J.P. Marín Arrese| Such is the slogan PM Pedro Sánchez trumpets time and again when confronted with any topic concerning the Spanish economy. Former VP Nadia Calviño used to provide a more reasoned approach than this self-complacent appraisal. Growth, while modest, ranks higher than other European countries, fuelling reasonable employment rates even in a sluggish environment. Prices, little by little, are coming under control. Excessive public deficit and indebtedness are not running out of tune compared to others. Spain seems to be faring slightly better than most of its neighbours. Only the coalition partners led by VP Yolanda Díaz staunchly rebuke this rosy picture, stressing that families are facing increasing difficulties to make ends meet, secure a decent job or find affordable housing. Opposition coming from within the Cabinet is telling proof of the current disarray in Spanish politics.

Yet, personal income remains at similar levels to that of a couple of decades ago, dragged down by the fall in productivity. As low-value-adding services increase their share in GDP, while industry plummets, the economy fails to deliver quality jobs and future-led investments. Government disregards such a shortfall, promising fewer working hours, hikes in minimum salaries and fat pension indemnities. The Government probably takes such a populist stance to disguise its humiliating vassalage to the Catalan separatist leader Mr Puigdemont. Sánchez must pay him a mounting ransom for helping him keep his premiership.

A Cabinet lacking inner cohesion, subject to a demagogic and motley crew of supporting parliamentarians, held hostage by a whimsical leader eager to take revenge from past grievances, can hardly deliver predictable policies. Nor can it inspire full trust and confidence, thus failing to provide the core values one expects from those ruling the country. It doesn’t seem that Spain is faring as well as Mr Sánchez claims it is.

About the Author

JP Marin Arrese
Juan Pedro Marín Arrese is a Madrid-based economic analyst and observer. He regularly publishes articles in the Spanish leading financial newspaper 'Expansión'.