While President Pedro Sánchez and his advance, Minister Albares , strive to claim in the US and before business leaders around the world that now is the time to invest in Spain, analysts and foreign investors continue to show their skepticism and their concern about a recovery that is still only an upturn and about the political drift of the social communist government when detecting a growing lack of legal certainty and the lack of commitment to structural reforms as well as a low profitability in the long term due to the inability of the economy to innovate.
The recent decree of extraordinary measures to lower the electricity bill by cutting benefits to the electricity companies , the insistence on repealing the labor reform; the pension system to increase the retirement age and raise the social security contributions of the self-employed and, the increase of a tax system that is already depleting in itself , are erupting volcanoes that scare investors and postpone or cancel the projects of investment.
That and if the Spanish economy holds, it is because of the purchasing policy of the European Central Bank, which in 2020 acquired 120,000 million of Spanish debt, the equivalent of the country’s net issuance, but which will not continue like this. In fact, the ECB has already announced a reduction in the rate of debt purchases of its emergency program against the pandemic, which will force the Spanish economy to enter the financial markets in the short and medium term with the consequent increase in the costs of higher interest rates.
And, with these, Unidos Podemos, a member of the coalition Executive, now comes out and demands to raise taxes on companies to approve the Budgets. And it does so just when the Bank of Spain has already cooled optimism by reducing its growth forecast for the Spanish economy to 6.3 percent for this year, two tenths less than the Government and only 5.9 that of the year next to 7 percent of the Executive, rates that Axesor Rating reduces even more by placing its growth estimates at 6.1 for this year and 5.7 percent for next.
Some advances that all analysts agree are a consequence of the boost in domestic consumption – driven by the good results of tourism in the summer campaign and the removal of restrictions on hotels and leisure – and also by the notable improvement of the foreign sector that, as Axesor technicians point out, “is consolidated as the undisputed engine of the Spanish economy.”
Both sectors that are beginning to be seriously threatened by the rise in prices of raw materials in international markets, a runaway inflation due to the rise in energy pricesand by populist political decisions such as the increase in the minimum wage or tax increases that seriously damage the competitiveness of our companies and our exports, a brake on foreign investment, the loss of purchasing power of the middle classes and an increase unemployment and the black economy.
It gives the impression that, as with Penelope’s cloak, what the economic agents and the aid of the European Union weave during the day to activate the recovery, from the government they insist on undoing it at night.
The Government and also the elements that, they say, were the ones that destroyed the Invincible. Because since Pedro Sánchez is president of the Government, the calamities have been relentless and unstoppable in Spain in the form of a health pandemic due to COVID, the storm Filomena , devastating floods by DANA, historical increases in the price of electricity, catastrophic forest fires like the last of Sierra Bermeja in Malaga and, now, the volcano on the island of La Palma . Of the gafes they say as of the witches, that they do not exist; but there are them.