Taking the credit

Spain appears to be on a roll. Second quarter economic growth, it was confirmed last Friday, was 0.9% of GDP, meaning that the Spanish economy has now returned to pre-crisis health. Unemployment is at its lowest level (17.1%) since 2009, with joblessness claims falling by 26,000 last month and 98,000 in June. The country also looks set to enjoy a record-breaking tourist season: in the first six months of this year, the number of foreign visitors to Spain increased by 6.2% compared with the first half of 2016. Champagne all round at the governmental offices in Madrid, surely.

In fact, the last two weeks have seen the Spanish prime minister Mariano Rajoy too caught up in the Gürtel corruption case to celebrate this spate of good news. Sooner or later, though, he will make an announcement to the effect that the GDP growth and fall in unemployment show that the Popular Party is the only one fit to run the Spanish economy. But how much credit can Rajoy’s government take for Spain’s dazzling macroeconomic performance this year?

Not much, as it turns out. Constrained by its status as a minority administration in a hostile congress, Rajoy’s party has barely been able to do anything since winning a second term last autumn. In fact, so far this year it has only passed four new laws: one of these allowed the belated 2017 budget to be approved, two consisted of small adjustments to the justice system and one stipulated a procedure for returning stolen art. The economy, it seems, is growing despite the current government’s inaction, rather than because of dynamic new policies or economic stimulants.

Whenever unemployment statistics drop – as they always do during summer months – Rajoy reminds Spaniards that the PP is sticking to its promise of creating 500,000 new jobs a year. But the joblessness statistics quoted above are misleading, because July and August are the busiest months for tourism and many workers sign temporary contracts just for the holiday season. Since regaining power last autumn, Rajoy has passed no laws that increase stability or wages for such employees, nor any that address unemployment among 15 to 24-year-olds, which is currently at 39.2%.

You can’t help but feel, as the Spanish GDP carries on increasing of its own accord, that the country’s government is not taking advantage of this expansion as much as it could. Instead of consolidating economic growth and addressing mounting concerns about the affect mass-tourism is having on Spanish towns and cities (as demonstrated by the attack on a tourist bus in Barcelona last week), it is passing laws on stolen art. Rajoy’s administration needn’t worry about the country’s economy during the summer break, because it can run itself just fine. The same fact, though, disallows the PP from taking much credit for its recent expansion.