These days have passed four years since Pedro Sanchez arrived in La Moncloa on the back of a coalition baptized as the Frankenstein Government, since with only 84 seats it rose to the Presidency of the Government thanks to the support of an amalgam formed by the communists of Podemos, the independentistas of ERC, the PNV and the heirs of the political arm of the terrorist group ETA.
During these four years, the president Sánchez It has made many concessions to its partners with the sole purpose of staying in power, at the terrible cost it entails for Spain. In economic matters, this has meant applying a wrong economic policy, of intense spendingwhich has raised the deficit and the debt to unknown levels.
It is obvious that there has been a pandemic in the middle and now the effects derived from the war in Ukraine have an influence, but the trend and structural evolution of our economy is not due to any of these circumstances, but to the decisions taken by the Government.
Thus, of the entire EU, Spain has been the country that has combined the largest deficit and debt, due to the enormous volume of spending. What is worrying is not that spending increased during the pandemic, but that it was not circumstantial, so that President Sánchez has transformed it into structural, which is the serious thing. That leaves Spain tied hand and foot, without the capacity to react at a time when any additional adversity -such as that of the war- can further slow down the economy without Spain having any margin to counteract the fall. In the same way, this mismanagement of the Government makes Spain the country in the eurozone that will later recover the GDP levels (in real terms) prior to the pandemic.
In this way, Sánchez, with his mistaken economic policy, has accentuated the imbalances. His balance couldn’t be worse:
In the IITR-2018, when Sánchez arrived at the Government, the Spanish economy grew by 0.5% quarter-on-quarter. Now, in the ITR-2022, despite coming from lower levels and having the economy recover more strongly, growth is lower, staying at 0.3%. The number of dissolved companies is 67.8 points higher than in May 2018. Retail trade grows 3.3 points less than when Sánchez acceded to the Government. The number of tourists has still not recovered, so that 1.4 million travelers are received than in May 2018. The legal insecurity and uncertainty created by the Government means that 5,913.4 million euros less are received in foreign investment than in the IITR-2018. The debt has grown since then by 296,611 million euros. Inflation is 11 points higher than that of May 2018. If we talk about the underlying, it is 6.7 points higher than when Sánchez arrived at the Government.
Despite the fact that among the ERTE, the public employment created, the prohibition of dismissal for several months after taking advantage of an ERTE and the obligation to convert temporary contracts into permanent-discontinuous ones (which will prevent them from being counted as unemployed when activity ceases), creates an artifice in the labor market, the situation is very worryingand, with runaway inflation, a failed energy policy, driving energy costs higher and higher, and a manifest inability of the Government to turn things around.
You can try to cling to the macroeconomic data for a while, but the economic reality of families and companies anticipates these records: families have difficulties paying the electricity bill, many can no longer fill the tank of the car and if they go to the supermarket buy fewer products and spend more money, while the Government increases collection due to inflation, at the expense of suffocation of families and companies. In the same way, many industries have to stop their production due to the impossibility of supporting the increase in costs.
In short, the mistaken economic policy of the Government intensifies inflation in Spain. By putting more pressure on the bottlenecks due to the increase in public spending, it makes families lose purchasing power and suffocates companies: more inflation, more debt and stagnation. In other words, it impoverishes the entire Spanish economy. That is the real balance of the Government of President Sánchez, a finished cabinet that has become the Government of discontent.
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