Spain Is Headed in the Wrong Direction
Madrid deserves solidarity from its European partners, but it also needs reforms that will help it run on its own again after receiving EU help.
Pedro Sanchez needs to put Spain back on the past to long-term growth.
Photographer: Manu Fernandez — Pool/Getty Images
At the end of a terrible 2020, Pedro Sanchez has something to celebrate. Spain’s prime minister has succeeded in passing the country’s first full-year budget since 2016 even though he presides over a minority government. A string of regional parties suddenly warmed to his left-wing coalition of the Socialists and Podemos — and especially to the nearly 140 billion euros ($170 billion) in grants and loans that Spain is set to receive from the European Union to counter the shock of Covid-19.
This political success means Sanchez doesn’t have to fear a new election. But it’s unclear whether such renewed political stability can help Spain’s long-term economic recovery. The government has been busy unpicking many of the structural changes that had contributed to its pre-pandemic economic success. And unfortunately, the EU is unlikely to obtain any commitments to reform in return for the recovery money.