Why the PP no longer talks about the economy

Hello,

How was your week? I hope everything is fine.

Maybe you remember these well-known phrases from Alberto Nuñez Feijóo:

The previous speech is from a little more than two years ago, from July 2022. It was not an isolated forecast, nor a warm-up. For years, until very recently, the Popular Party prophesied an economic apocalypse that never came.

It was a constant campaign. Overwhelming. In February 2024, Feijóo still insisted that “the Spanish economy is one of the worst” in the European Union. It was also a very effective speech, which permeated society. Even today, in surveys, the majority of Spaniards say that Spain’s economic situation is “very bad.” Even today, in those same surveys, the majority of Spaniards recognize that they, personally, are doing very well. And despite the obvious contradiction, even today there are many who believe, who say, that Spain is in crisis and the economy is fatal.

It has also been an overwhelming success for PP propaganda. What would the majority of the media have said if these economic data had been achieved by a Conservative government?

Someone from outside had to come in to certify something obvious: that not only is Spain not in crisis, but – in macroeconomic terms – it is experiencing one of its greatest moments of expansion. According to The Economist, the Spanish economy has been the best in 2024 in the entire OECD, a club that includes the 34 most developed countries in the world.

The Economist is not a Bolivarian, or left-wing, or even progressive media. This influential British magazine is one of the beacons of liberal capitalist thought. And to arrive at this great compliment to the Spanish economy, The Economist analyzed five indicators: GDP growth, inflation, stock market, employment and public deficit. Weighing all of them, the Spanish economy has been the one that has performed the best among all the developed ones during 2024. Number 1.

The indicators themselves imply a bias. Frankly, I believe that more citizens are affected in their daily lives by the rise in housing prices than by the stock market. The Economist also fails to take into account inequality, or how inflation has eaten into wage growth for many workers. But macroeconomic data should not be disregarded either. These are figures that, not so long ago, no one could imagine.

Spain is the country that is growing the most in all of Europe. It will close 2024 very close to 3%. More than triple the European average. Double the OECD average.

Spain is also the European country, among the largest, whose economy has grown the most since 2019. We have emerged from the pandemic stronger than the others. And the real data on Spanish GDP – as I have explained in previous articles – are probably greater than the calculations made by the INE.

Spain is also experiencing the moment in its history with more Social Security affiliates: more than 21 million workers. And there is another record: it is the first time that stable jobs are in the majority compared to precarious ones. In this last year, as many new jobs have been created in Spain as France and Germany combined.

And Spanish companies? They don’t stop growing. The Ibex 35 has risen close to 17% this year.

And the price increase? Not only has it been reduced, but some basic necessities that rose a lot – such as food or olive oil – are beginning to fall.

Regarding the public deficit, the difference between what the State receives and what it spends is also much better. It will close the year at 3%. And so Spain will become one of the European countries that comply with the new EU tax rules, something that not everyone can say. For a few weeks now, the Spanish risk premium has been below the French one. Something like this is unprecedented.

When the GDP data is analyzed in more detail, the news is even more surprising. We no longer only export sun and beach. The services of highly qualified personnel – consulting, engineering, telecommunications… – are also boosting the foreign sector. Growth is no longer based on the expansion of brick: the Spanish economic model has changed.

But just as surprising as the data are the recipes that have made them possible. They are totally opposed to neoliberal catechism.

Employment does not stop growing, despite the fact that the Government eliminated temporary employment with the labor reform and applied the largest increases in history to the minimum wage. It was supposed to generate more unemployment, as the Bank of Spain said. It happened just the opposite.

Public accounts improve. The debt in relation to GDP is reduced and the deficit falls. And all this, despite the fact that the Government has increased social spending and has protected the purchasing power of pensions. Next year they will rise 2.8%. And the minimum or non-contributory ones – the lowest – will grow even more.

The war in Ukraine triggered inflation; in Spain and around the world, due to the increase in energy prices. But of all the European economies, Spain is where this rise in prices was best mitigated. And it was achieved with a measure totally opposite to the liberal prescription: intervening in the market, capping the price of gas. That decision, which Feijóo despised as “the Iberian scam,” allowed Spaniards to pay the lowest electricity bill in all of Europe for two years. With that measure alone, we saved 5,000 million euros in the price of electricity.

And the companies? For many of them, the largest, the Government raised taxes. But that has not prevented a historic rise in the stock market, nor has it plunged its profits. Nor has it prevented foreign capital from continuing to arrive, or large investment projects from increasing.

There are also two factors that are driving the economy, in the face of racist and denialist mantras. The first, the commitment to renewables: it is making Spain a very attractive country for the industry, because this clean energy is also cheaper. And also immigration: all the reports – including The Economist – explain that it is one of the keys to understanding Spanish growth.

It is evident that there are many serious things to be resolved and to which the Government has not yet provided a solution. There are three problems that are essential: access to housing, the purchasing power of salaries and the increase in inequality. They are not exclusively Spanish problems – nor was inflation; The same thing is happening in all OECD economies. There are no miracle recipes nor magic solutions for an economy like the Spanish one, which lives connected to others. Many of us would also like the Government to be more daring with these issues, although this would require a Parliament with a progressive majority. Something that does not exist today.

But the key question is another. What alternative does the PP propose? If there is a change of Government, what economic model will they apply?

Part of this question was answered yesterday, at the Conference of Presidents. Isabel Díaz Ayusó summarized her proposal very well: “The minimum wage should not be the same for a farmer from Extremadura as for a businessman from Madrid,” she said.

That is why they no longer talk about the economy in the PP. Except when it escapes them.

I’ll leave it here for today. Thanks for reading me. Thank you for your support of elDiario.es

A hug,

Ignacio School

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#longer #talks #economy