Sánchez Closes Four Years Of Force, Pioneer In The EU In Debt, Spending And CPI

Last Wednesday, Pedro Sánchez celebrated four years as head of the Presidency of the Government, after winning on June 1, 2018 the first motion of censure of democracy against a head of the Executive; in this case, Mariano Rajoy Brey.

On the occasion of such anniversary, the president wanted to celebrate it with the Socialist Parliamentary Group of both chambers. There, from the Congress of Deputies, he sent a message of optimism about his management and pondered his legislative roadmap and the strengthening that his measures have had on the Spanish economy. “Spain Advances!” , he reiterated in his speech, congratulating himself for overcoming the crisis, the virus, the volcano and even Filomena.

data crash
What the President of the Government did not address was the collapse of the macroeconomic data, which for reasons of covid, the invasion of Ukraine, or his own management, including the delay of the Next Generation funds, leave the public accounts with this fixed photo.

Spain is today the country with the highest public debt, only below Greece. The current figure stands at 116.4% of GDP, a figure that is 20 percentage points above pre-pandemic levels. As for our economic growth, GDP -revised by the Government at 4.3%, and down with respect to the last data- is still at 3.4% of GDP in 2019, while the most important economies in the area euro have already exceeded that pre-covid handicap, and the average is 0.5% above pre-pandemic levels.

Regarding unemployment, this week, the Ministry of Labor published record data on job creation, mainly thanks to the recovery of the tourism sector, noting that it has achieved that 20 million people crown the labor market. This is a figure not reached since 2008 . Of course, in that year, Spain had 46,239,271 inhabitants, with 9.3% immigrants; and now, with data from the INE, the country has 47,326,687 citizens, including 12.9% immigrants; which means, something more than a million inhabitants.

To this consideration of population increase, economists such as José María Rotellar and Javier Santacruz emphasize aspects to take into account to assess the current labor market, such as the drop in productivity, with fewer hours worked , since 2018.

The print speaks of 2.1% less compared to 2018 and 2.3% less compared to March 2020 , just when the pandemic began. In addition to productivity and the decrease in hours worked, Santacruz points out, there is doubled precariousness in the partiality of contracts that are now counted as permanent jobs.

In his opinion, this complicates an evaluation of a labor reform -as the governor of the Bank of Spain also indicated this week-, a reform approved at the last minute thanks to the ‘error’ in the vote of a PP deputy. To these conditioning factors, economists such as Santiago Sánchez López add the increase in civil servants since 2018.

Increase in officials
This situation is underlined by the Institute of Economic Studies, which in its latest report For an improvement in the efficiency of public spending in Spain, maintains that in our country there has been a resurgence of employment fever in the public sector, without forgetting that nearly 16 million people -pensioners, unemployed and public employees- are part of public sector spending, compared to just over 12 million people in the private sector.

In this line, Sánchez López recalls the historical series of the number of civil servants of all administrations, which has gone from 2,463,060 in June 2018, to 2,829,091 in April 2022 . 14.86% more. Only in the creation of public employment, Spain has grown between 141% and 150% from the Rajoy stage to that of Sánchez, while in this period (from 2018 to April 2022), Spain has lost 68,090 companies.

The deficit reached by the Government of Sánchez also sets off alarms. Although it is true that it has decreased compared to 2020 (10.27% of GDP, in 162nd place in the ranking, and with the stimulus and aid policy of the European Central Bank, our deficit), and that of 2021 was 6 .9% of GDP, today it is still three percentage points above the pre-pandemic level.

Sánchez currently supports the highest inflation in recent history
The Sánchez government is currently experiencing the highest inflation in recent history. Global in the euro zone, that of Spain shows heterogeneous features, and it is not affecting the different sectors in the same way. Households and companies are strongly affected by the high cost of the shopping basket and the prices of energy and raw materials.

At the moment Spain is enduring an inflation of 8.7%, and an underlying one of 4.9% of GDP, to which is added the directive of the Government of Pedro Sánchez to index public spending , such as pensions and public salaries, to the CPI, leaving aside the public debt ratio, and the end of the ECB’s monetary policy.

From September 2021 to March 2022 -with months in between without the pressure of the Russian occupation that has affected the price of raw materials-, inflation in Spain was 6.5% compared to 5% in the euro area .

With a fall in foreign investment (5.9 billion less than in the second quarter of 2018), unresolved laws, complications of parliamentary agreements, an excess of decrees and few appearances before Parliament, together with a temporary closure of the lower house on the occasion of the first state of alarm, the management of Pedro Sánchez is also criticized for the suspense of his educational policy, the last in the IEE report, below Portugal, Greece and Italy. On the other hand, the NEU funds show another data: as of April 2022 , and on final loans of the 28,000 million that correspond to this year, only 5.6% have been executed.

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