THE COMING PAIN IN SPAIN La economía española está cayendo y va a acabar derrumbándose, según prevé el Economist. La revista británica también incide en la falta de liderazgo que representa Zapatero. Y un dato: es el único presidente español que no ha conseguido mayoría absoluta en su segundo mandato.
"ANYBODY who is confident of the outcome of Spain's election on March 9th should recall March 14th 2004. Three days after Islamist terrorists bombed four Madrid trains, killing 191 people, voters unexpectedly handed victory to the Socialists' José Luis Rodríguez Zapatero. This weekend Mr Zapatero faces the electorate once again. Sober flags showing Mr Zapatero and his People's Party (PP) rival, Mariano Rajoy, flutter decorously along the two sides of Madrid's Castellana avenue, belying the bitter tensions between the two parties that have persisted since 2004. Opinion polls suggest Mr Zapatero will win—but the margin may be narrow.
On the face of it, that seems odd. The past four years have been good for Spain. Growth has averaged almost 4%. Spain has been producing most of the jobs created in the euro area. In December Europe's number-crunchers said it had overtaken Italy in GDP per head. Mr Zapatero's decision to pull Spanish troops out of Iraq was popular, as were most of his government's social policies, such as legalising gay marriages. Spanish governments tend to be re-elected at least once, and the country is naturally left-of-centre. Yet Mr Zapatero does not appear to be reaping the rewards.
His PP and Socialist predecessors as prime minister, respectively José María Aznar and Felipe González, both won absolute majorities in their second terms. Even Mr Zapatero's closest backers consider that unlikely this time. Much will depend on turnout—anything above 70% will boost him. Yet, as one ally concedes, if he fails to win an absolute majority, that will be a mark of Mr Zapatero's failure as leader. One problem is his lack of inspiration and punchiness. But the colourless Mr Rajoy is little better. The consensus is that Mr Zapatero held his own in the first televised debates between the two men, and won the second.
Mr Zapatero's struggle to win re-election seems to be attributable to three broader factors. The first and biggest is, surprisingly, the economy, now a matter of deep concern for many Spaniards. GDP growth is slowing sharply, from 3.8% in 2007 to 3% (officially) or even as little as 2% (say pessimists) this year. Unemployment jumped in both January and February. Consumer confidence is at a 13-year low. And inflation has ticked up above 4%.
Plainly, the economy's apparently robust performance was more fragile than it seemed. It has depended heavily on construction, which accounts for as much as 18% of GDP, nearly twice the share in other European countries. In recent years Spain has built more new houses than Britain, France and Germany put together. Now the property bubble has burst. In November new house-building requests fell by a quarter over a year earlier, says the Bank of Spain. House prices are dropping. No wonder voters feel glum.
The second factor weakening Mr Zapatero is his policy on the Spanish regions. It was risky to devolve more powers to the Catalans, and even more so to talk to the Basque separatists, ETA. Mr Aznar's refusal to discuss more regional autonomy had stoked separatist sentiment. Yet the new statute for Catalonia, fiercely resisted by the PP and now subject to a court challenge, has proved unpopular in the rest of Spain. It has not even helped the Socialists much in Catalonia—indeed, the regional parties will do well, putting them in a strong bargaining position with a new government (see article).
As for ETA, its decision to end a two-year ceasefire and resume its campaign of violence was a blow to Mr Zapatero, making him seem credulous and naive. It is true that the PP government also talked to ETA, and that thanks to good police work the terrorists are even weaker than they were. But Mr Zapatero's new regionalism has certainly not helped him.
The third issue that may have hurt him is immigration. Spain has become Europe's migration magnet: in the past decade it has taken in as many as 5m foreigners, second only to the United States. Most come from north Africa and Latin America. The population, once expected to fall, is growing fast: official forecasts show it rising from 45m now to almost 50m by 2015. Mr Rajoy has made much of uncontrolled immigration, with the avowed goal of luring native working-class voters away from the Socialists.
Mr Zapatero stoutly defends immigration, especially his decision to legalise many of those who entered Spain illegally. Yet the country is now changing so fast as to test social tolerance. In 2000 the foreign-born share of the population was just 4%. Seven years on, it is 12%, as high as anywhere in Europe. With the economy in trouble and unemployment rising, a backlash against immigration seems likely.
Immigration is intimately linked to Spain's economic performance. Many foreigners arrived to work in construction. They are also responsible for much demand for new housing outside the costas. And immigrants have been crucial in bringing about wage moderation—real wages have recently been falling—and in holding down inflation. One economist, tongue only just in cheek, calls immigration a de facto labour-market reform.
Immigration has also made two failings in the Spanish economy potentially worse. First, it has prolonged the property boom to the point where its bursting seems bound to cause more pain. The Bank of Spain insists that Spanish banks are healthier than their rivals, not least because it wisely kept them out of the fancy structured-finance products that have caused such trouble elsewhere. But it concedes that lending linked to property has risen from 40% of all loans in 2005 to 60% now. It puts total exposure to property at a whopping €300 billion ($450 billion).
The government insists it is well placed to respond to a slowing economy. The budget surplus is running at 2% of GDP; ten years ago the deficit was close to 3.4%. Mr Zapatero and Mr Rajoy are vying to make ever more extravagant promises of tax cuts and spending plans. But the Bank of Spain urges caution: inflation is high and the current-account deficit is a shocking 9% of GDP, so fiscal expansion may be riskier than it appears at first sight.
This should focus the attention on the second failing: Spain's lack of structural reforms to improve competitiveness, free up the labour market, liberalise the economy and start the slog of raising productivity by such measures as improving education. The good times of the past decade, plus European Union money that is now running out, allowed governments of both parties to put off taking unpalatable medicine. Spain faces its severest test since joining the euro a decade ago. The only way to pass is to make deeper reforms than either party has so far suggested. In some ways, this may turn out to be an election that it is better to lose than to win."
On the face of it, that seems odd. The past four years have been good for Spain. Growth has averaged almost 4%. Spain has been producing most of the jobs created in the euro area. In December Europe's number-crunchers said it had overtaken Italy in GDP per head. Mr Zapatero's decision to pull Spanish troops out of Iraq was popular, as were most of his government's social policies, such as legalising gay marriages. Spanish governments tend to be re-elected at least once, and the country is naturally left-of-centre. Yet Mr Zapatero does not appear to be reaping the rewards.
His PP and Socialist predecessors as prime minister, respectively José María Aznar and Felipe González, both won absolute majorities in their second terms. Even Mr Zapatero's closest backers consider that unlikely this time. Much will depend on turnout—anything above 70% will boost him. Yet, as one ally concedes, if he fails to win an absolute majority, that will be a mark of Mr Zapatero's failure as leader. One problem is his lack of inspiration and punchiness. But the colourless Mr Rajoy is little better. The consensus is that Mr Zapatero held his own in the first televised debates between the two men, and won the second.
Mr Zapatero's struggle to win re-election seems to be attributable to three broader factors. The first and biggest is, surprisingly, the economy, now a matter of deep concern for many Spaniards. GDP growth is slowing sharply, from 3.8% in 2007 to 3% (officially) or even as little as 2% (say pessimists) this year. Unemployment jumped in both January and February. Consumer confidence is at a 13-year low. And inflation has ticked up above 4%.
Plainly, the economy's apparently robust performance was more fragile than it seemed. It has depended heavily on construction, which accounts for as much as 18% of GDP, nearly twice the share in other European countries. In recent years Spain has built more new houses than Britain, France and Germany put together. Now the property bubble has burst. In November new house-building requests fell by a quarter over a year earlier, says the Bank of Spain. House prices are dropping. No wonder voters feel glum.
The second factor weakening Mr Zapatero is his policy on the Spanish regions. It was risky to devolve more powers to the Catalans, and even more so to talk to the Basque separatists, ETA. Mr Aznar's refusal to discuss more regional autonomy had stoked separatist sentiment. Yet the new statute for Catalonia, fiercely resisted by the PP and now subject to a court challenge, has proved unpopular in the rest of Spain. It has not even helped the Socialists much in Catalonia—indeed, the regional parties will do well, putting them in a strong bargaining position with a new government (see article).
As for ETA, its decision to end a two-year ceasefire and resume its campaign of violence was a blow to Mr Zapatero, making him seem credulous and naive. It is true that the PP government also talked to ETA, and that thanks to good police work the terrorists are even weaker than they were. But Mr Zapatero's new regionalism has certainly not helped him.
The third issue that may have hurt him is immigration. Spain has become Europe's migration magnet: in the past decade it has taken in as many as 5m foreigners, second only to the United States. Most come from north Africa and Latin America. The population, once expected to fall, is growing fast: official forecasts show it rising from 45m now to almost 50m by 2015. Mr Rajoy has made much of uncontrolled immigration, with the avowed goal of luring native working-class voters away from the Socialists.
Mr Zapatero stoutly defends immigration, especially his decision to legalise many of those who entered Spain illegally. Yet the country is now changing so fast as to test social tolerance. In 2000 the foreign-born share of the population was just 4%. Seven years on, it is 12%, as high as anywhere in Europe. With the economy in trouble and unemployment rising, a backlash against immigration seems likely.
Immigration is intimately linked to Spain's economic performance. Many foreigners arrived to work in construction. They are also responsible for much demand for new housing outside the costas. And immigrants have been crucial in bringing about wage moderation—real wages have recently been falling—and in holding down inflation. One economist, tongue only just in cheek, calls immigration a de facto labour-market reform.
Immigration has also made two failings in the Spanish economy potentially worse. First, it has prolonged the property boom to the point where its bursting seems bound to cause more pain. The Bank of Spain insists that Spanish banks are healthier than their rivals, not least because it wisely kept them out of the fancy structured-finance products that have caused such trouble elsewhere. But it concedes that lending linked to property has risen from 40% of all loans in 2005 to 60% now. It puts total exposure to property at a whopping €300 billion ($450 billion).
The government insists it is well placed to respond to a slowing economy. The budget surplus is running at 2% of GDP; ten years ago the deficit was close to 3.4%. Mr Zapatero and Mr Rajoy are vying to make ever more extravagant promises of tax cuts and spending plans. But the Bank of Spain urges caution: inflation is high and the current-account deficit is a shocking 9% of GDP, so fiscal expansion may be riskier than it appears at first sight.
This should focus the attention on the second failing: Spain's lack of structural reforms to improve competitiveness, free up the labour market, liberalise the economy and start the slog of raising productivity by such measures as improving education. The good times of the past decade, plus European Union money that is now running out, allowed governments of both parties to put off taking unpalatable medicine. Spain faces its severest test since joining the euro a decade ago. The only way to pass is to make deeper reforms than either party has so far suggested. In some ways, this may turn out to be an election that it is better to lose than to win."
The Economist
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