

Spain’s prime minister

One year on

Mariano Rajoy endured a torrid first 12 months—2013 is likely to be grim, too

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Having in mind as I remember former writings about this issue and related ones. Maybe two years ago or even more backwards. It seems to me that The Economist perspective is changing.


Spanish economy is very sensitive to economic periods.... after a period of eleven years growing over the EU medium levels it was obvious that the fall would be as it is being right now. Regardless, when the economic period turn to positive we all will see how spain growns again and create jobs more than any other place in Europe.

Spain has its owns matter of course, not less than other EU countries, but its true than as 4th Euro Zone Country, this matter turns to be very important for Euro survival.

I know about the traditional eurosceptcism existing in UK, the hold you are to what you consider things should be and the superiority you defend your positions with giving lessons everywhere you go and even mocking when your financial timers refers to south economies as pigs considering that it is impossible for a pig to fly. Well... i must say that in 30 years of democracy Spain has done quite fine overall considered. And yes... i believe this "pig" flow and quite fast i must say. It is true, with the help of Europe, but didnt you get any help from States after 2nd war world as Germany and France did.

And any way... in five years Spain will be contributing negatively to EU to help Easter Europe countries to get developed.

About now, worst problem is the higher interest Spain has to pay for his debt. Once this is solved and globlal growth comes to Europe the unemployment will drop, and with this drop de deficit budget will be controlled in 2 years. What will be the bases of the drop of unemployment.... thats the worse part.... i guess... public infraestructrues AGAIN :(, foreing investments, and a much more close market relations with neighbourghs....

We still has difficult to push our young people to become their own ideas into a good business.... no entrepeneur culture...

F R O Y in reply to John7

Spain doesn't have a viable economic model to grow. After entering the EU, and subsequently opening its market to global competition, most of its leading manufacturing industries (textile, shoes, light products...) were dismantled one by one and substituted by Asian imports. The economy passed to depend on tourism and on a huge real estate bubble. Once that bubble has bursted, there is nothing left to make Spain grow in the short term... unless they create another bubble, that is. This is what the Spanish government seems to be intending, for lack of more a ambitious or ingenious strategy. Since it is unlikely such a bubble will reproduce anytime soon given the huge amount of empty apartments in the market, you can be sure, Spain's economic woes will stay with us for quite a while.

Sit tight.

Galician liberal

Rajoy is a typical Spanish conservative: interventionist and illiberal. He will follow a reformist path inasmuch as it does change nothing (not kidding, Lampedusa dixit).That means no substantial change and no core liberalization of the country's structures. That is why it is far easier for the government to make millions and millions suffer harsh income cuts than bother vest interests or release the budget from the burden of thousands of local councils.


Oh! Here there is censure. Somebody can write in spanish, but if I do it and I say this newspaper quase-copys the EL PAÍS and CINCO DÍAS (the spanish labourist party and socialist/comunist unions hotel, Grupo PRISA's daylys) my post disappears. You should must learn spanish, the world's second language, or let the lectors -many of them spanish in this case- to give his opinion about my post -it's easy yo use a traductor. Howevver, I`ll repeat my comment, resumed, in question.
The PP's govern has made most structural reforms in one year than Labourist spanish party in seven years -not ECB. And the author's article tells half of half of economic spanish reality. He obvius the herency of Rodriguez Zapatero's govern -a big desphase on National Acconts. He forgets efforts by reduce the deficit/GDP and he lies when says the debt/GDP increases too much on this year because, from october, it has sold bonds relatives al next year.
He and some commenters seem don't remember Cataluña is, the fact, default and rescued by the govern and that his bonds ratting is closed Greek's bonds. Also Cataluña's regional govern plays almost times illegally and out of Spain's Constitution and Supreme and Constitutional Tribunals sentences -with active corrupcy and a lot of money at Swiss or Andorrans banks too.Even he thinks to be like Scottland in legal terms. It same beliving they'll belong the EU and they'll have free access to the rest national territory; however, Cataluña will become the New Autharchic Albania.
In othe side, Spain has got, from mahy year, a positive commercial balance; it has made a homogeneus norms for all regions; it are fighting vs fiscal fraud; tne private banks has got higher liquity of EU -after I explain reality of financial rescue; it has transformed the job system in a more free activity; and, whithout doubt, it are suffering tne legacy of keynesian econonomics political earlier that it finished in a real state crash and bigger unemployed -evenwith tha actual sabotage of those party and unions labourist. It's walking, of course, by the Bruxeles' agreements ways sucesslly.
But everybody knows Rome dosen't make in one hour and it rests three years -and even many fonts talk about tne Rajoy's miracle. So I don't know what it happens with any anglosajon press medias when, really, the british and USA economys has longer troubles or China's actions seems previous to new cold war. Too it worths explain financial rescue comes from regionals and provintial banks, with social and no-benefit finality, almost controlled by labourist party and his unions; these loans and 'pieta' cashers were a uncontrolled without bottom hole of money for politicians friends companys benefit, a lot of riskness mortages, corrupcy bussisnes, illegal party credits after missed, own perssonal enrichment, etc. -without supervising by Spanish Central Bank. The Zapatero's govern forced their fussions and its conversion on private banks when many them were in totally bankroupcy. With sense comun, these entities would must to be closed and it to sell their assets. So genuine private banks haven't problems -even inside coyuntural situation, it any wasn't nationalited and i.e. at USA and UK.
Curiously, while USA are near default and many states are it yet, the ratting agencies -that they depend quasi-absolutly from the City and USA markets. I think a newswritter must to inform impartially. However, see you in some ours hotels nearly -breaking: this year, strangers tourists have spent the ever higuer sume.
Too, I think Spain will begin to recover from second half 2013.

PeibolSkan in reply to rodalvarglez

My friend, I did not understood everything from your long post. But I disagree with you

Rajoy has not chaneged the structure of anything. He has just applied short term cuts to comply with targets set from Europe. The state structure has not changed a bit. Politicians are as corrupt as always.

He has suceed to put the weight of cuts on the heads of the weakest groups. And that is VERY VERY UNFAIR.

In Spain we all know we are a sick country and we need to change. We all know we have our responsability on what happened. And we also know that some of us are more responsible than others. Politicians, banks and firms managers had much better information than young people or inmigrants that decided to take a mortgage to buy a house.

The problem with Spain is (1) short term budget cuts are being applied to reach fiscal targets but they are killing the real economy and worsening unemployment (2) we have one of the most corrupt and inept political class in the world (Rajoy and Catalonia included)

Yes we are sick and we (in a certain way) deserve what is happening but the medicine by Rajoy and his friends from PSOE (which are no better than him) is just making things worse

Accrux in reply to rodalvarglez



It's not censorship.

From Terms of use / The Economist



Post Messages in any language other than English;"



Given that you are unable to write in English, at least use paragraphs. Otherwise your post is not only unreadable, but "indigestible".


Rajoy is a lightweight with too much baggage to make any difference.He is aligned with Aznar through to Franco, the worst possible guides for a modern, European Spain. I do not think Dragi or anybody else saved Spain, inasmuch as Spain is far from saved. However, sweeping under the carpet a political class rife with corruption and mismanagement, which extends right back into Aznar's previous cabinet, is not the way forward. Everyone else has been forced to sacrifice. When is it the turn of the people who built the bubble and profited obscenely from it? If US and UK experience is what we should go by, very few will be in prison where they deserve to be.


Spain will be rescued again in 2013. Its banks were already bailed-out in 2012 and its economy, as a whole, would not survive without a new bailout.

Spain´s last big economic opportunity is gone. After billions and billions of euros in subsidies from the EU throughout the last two decades and cheap financial support from the ECB in the last couple of years, Spain and its politicians were not up to the challenge. Highly damaging country-wide Corruption and extremely poor Economic Policies finally brought the country on its very knees. Any other developing country in the world, anywhere, would have reached a solid and sustainable strong Economic Status after so much help. Once again in History, it did not happen to Spain. Maybe the Spanish Society was not mature enough to understand the golden opportunity at hand. Poor Spain!


It doesn´t sound fashionable to say this at current days but I trust Spain and I believe in its sucess as a country since engaged in European Union. Spain is crossing through a hard readjustemen period that will be crutial for its viability. It´s not difficult to identify the main problems:

- Oversized public sector and Administration at all levels, national, regional and municipal.

- A terribly low level political class that works as a parasitas for productive sector of economy. There´s not a single politician man in Spain with a minimun sense of State and responsability beyond four years. It´s urgent a serious agreement between the two principal political (and parasitas) partys about essential issues such as education and policies to face the problem number one: UNEMPLOYMENT. It should be a kind of ¨Pactos de la Moncloa¨ new edition.
- Political commitment to not making coalitions with separatist partys that systematically blackmail any Governement.
- To focus a deeper and faster process of political not just economic integration among EU countries in order to build a real United States of Europe, which I prefer to call just Europe as a single country.


The article basically misses out on everything important in Spain. The main problem in Spain is that real reform of anything that matters is impossible due to the "power class" of politicians and business men protecting their vested interests and thus their right to economically oppress the normal people.

What Spain needs is to become more competetive through
real reform. One important part is real labour market reform. Another equally important part is making the costs of banking, petrol, gas, electricity, telephone, internet, transport, pharmacies etc. etc. go down. If real reform was undertaken, Spain would be richer, more transparent and fair society. With positive prospects, financing costs could be brought down, and the country could start a new virtous circle.

Unfortunaely this is impossible since the ruling class are the big earners from al these monopolies. And the ruling political class cannot be ousted due to the election system. So we have a permanent status quo where corrupcion and colusion rules.

So in stead of making a prosperous Spain, the power class chooses to make the country poorer by oppressing the poor - the only real option if you want to balance the budget and the trade balance. In other words: Politicians deliberately choose to make the country poorer in stead of richer because iot means they can keep their license to steal.

It really sucks and it is amazing that it is allowed to hapen.


I am stunned by the marked anti-Rajoy bias of the article.

Rajoy is accused of cutting expenditure as to break election pledges, but the fact that he found a public-sector deficit of 9% of GD^P, rather than the expected 6% is simply withheld from the reader, as if it bore no relation to the cost-cutting effort.

Rajoy is accused of presiding over worsening of economic figures (debt, unemployment and gdp growth), but no mention is made that these are all trailing indicators.

On the other hand, when the obvious is conceded (that public-sector deficit is falling), no mention is made that public-sector deficit happens a leading indicator (at least for debt, if I may).

Moreover, an even more impressive leading indicator, i.e. the quick drop in the current account deficit (which fell more in Rajoy's first 9 months than it had in the previous 2 years), is again ignored.

Moving on, Rajoy's PP party is accused of thinking that "its mere presence in government would be enough to calm the markets". That not only sounds pretty silly, but it is plain false. In reality, Rajoy approved a sharp income tax increase within 11 days of taking office. So much for "mere presence".

Rajoy is then accused of holding off the budget. Again, no mention is made to the fact that it took him 3 months to deliver it, against a technical minimum under Spanish budget rules of about 2 months. By the time we get to this paragraph, the article starts to look like the fodder for the loyals normally delivered by one of Madrid's pro-socialist dailies, and quite unworthy of the usually more level-headed The Economist.

At this point, the article just takes off, and plainly begins to ignore numbers. Rajoy is accused afresh, this time of choosing to fix his own deficit target in contempt of his Euro-peers. One phrase later, a bank rescue from Europe is described but, funnily enough, the numbers are ignored: at that moment, the deficit target agreed was actually higher than Rajoy's previous demand (6.3% vs 5.8%).

And then, to cap it all, having entirely departed from the realm of statistic fact, in the final fireworks the author feels free to express his own personal point of view: it was not Rajoy who saved Spain, but someone else (Mario Draghi, in this particular instance).

Leaving aside Mr Draghi's many merits, it is remarkable how the author is ready to tell you what you should think, lest you venture to think on your own.

Is it possible to ask who on earth put together this fantastic piece of journalistic work?

thepassing in reply to Pointout

Draghi has no merits. He's a thief that uses our money to bail out rich bankers, deliver profits to Goldman Sachs and puts us on the hook for all of it.

And Rajoy is a criminal who cares only about saving rich bankers and doesn't hesitate to inflict the pain on the middle class and the poor.

EU and Euro: everything for the rich, to be paid for by all others.


In the right track; just like Obama in his first term!
It will take some time, though...
Cosimo Fish


The People´s Party of Mariano Rajoy has an overwhelming majority in Congress, something Cameron doesn´t have in the U.K. and Monti didn´t have in Italy.
Rajoy has won the majority in the Elections held in the Galicia region, and in the last Elections in Catalonia his party has increased its representation to record historical levels while the ruling party lost 12 MPs.
So, perhaps Mariano Rajoy will win again the next General Elections in Spain, in spite of errors from some Ministers like Gallardon.


I cannot understand how from this paper they talk about Spain, a much more serious country than USA and UK, with such a little respect. I can guess that the financial casino invented by the anglosphere is falling apart and some people in the City and Wall Street are nervous. All my prayers for 2013 is to see all them biting the dust...


It will get a lot worse, until Spain frees itself from its number one problem: the Euro itself.
And until the Spanish people realize that, I have a hard time feeling sorry for them. If they want to cling on to the harbinger of their own doom, then so be it. If they like being subjected to austerity to fund banker bonuses, I feel no compassion.
Don't buy the scaremongering how bad it would be without the Euro. Because it wouldn't be, it might not be fixed overnight, but it cannot be worse if you leave the Euro now. The Euro is your misfortune, Spain. Wake up to reality.


Spain certainly needs to review its regional system, but in a way that both resolves the budgetary problems and also grants Catalonia, for example, more control over its own finances.
Another issue not mentioned above is the Rajoy government's problem in communicating effectively with Spaniards and EU neighbours: http://iberosphere.com/2012/12/rajoys-difficult-year/7602

thepassing in reply to Etxeko

Catalunya no es Espana. It will be independent before this decade is out and free itself from the shackles of decades of Francoist tyranny which is followed up with decades of PP-led Madrilene tyranny.

Visca el Catalunya!

enriquecost in reply to thepassing

Scotland and Northern Ireland will exit the U.K. and will join the €urozone earlier than England...Catalonia is more Spain than Madrid, as there are 7.5 million people in Catalonia and 6.5 million people in Madrid. So if Spain has a population of 46 million people, the percentage of Catalonians is higher than the percentage of Madrileans. Just a question fo mathematics.

pandemonic in reply to thepassing

Very true - Catalonia is not Spain, it is only a small part of it. Well, OK, it accounts for about 20% of GDP. But what a load of old cobblers "thepassing" writes. Frankly, not passing but pissing in the wind would be more accurate.


The labor force reduction in the private sector is almost completed.
The pending issue is the reduction of the oversized public sector and
specifically the autonomus regions administrations.
In the last days, the Spanish press published the some facts that
are simply shocking: every years the central and local governments
produce one million pages of legal regulations of all kinds.
The legal system in each autonomous region differs sustantially from another.
The companies willing to enter Spanish market have to go through
different registration proccess in each autonomous region.
Nowadays, thera are 69.000 laws, frequently contradictory, regulating economic activities.
The conclusion is simple; Either Spain finish with its autonomous regions or they will finish with Spain.


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