Rewriting history
The Euro Zone

Rewriting history

Nadia Calviño, during her five-year stint as a lead player in the Sánchez Show, has been a relentlessly, in fact suspiciously, optimistic minister

Mark Nayler


Friday, 5 January 2024, 17:37


Spain's former economy minister Nadia Calviño has beaten Denmark's ex-deputy prime minister Margrethe Vestager to become the new head of the European Investment Bank. As I've had cause to note many times in this column during Calviño's five-year stint as a lead player in the Sánchez Show, she is a relentlessly, in fact suspiciously, optimistic minister. And so it proved right until the end: her retrospective assessment of her performance at the helm of Spain's economy as 'historic' is itself unprecedented - indeed, it is the most delusional statement Calviño has ever made.

As Fernando González Urbaneja, a veteran economic commentator, wrote this week on, "The only thing that's historic about the Sánchez government is its 'self-esteem [...] There is no precedent of a government as satisfied with its successes and its mistakes as this one. The principle of not admitting a single mistake and blaming the opposition, or circumstances, for all the country's ills, has led to the construction of a narrative of conclusive and 'historic' successes". A narrative, one might add, that has often been at a sharp angle to the facts.

We know that neither Calviño, nor the leftist coalition of which she was a part, have been the main drivers of Spain's stellar GDP performance, which has continued during the country's stints without governments (the same happened in Belgium between 2010 and 2011: no macroeconomic ripples). Spain's GDP performed well throughout the latter half of 2023 - yet another few months when a gang of political zombies looked out mournfully through the windows of Moncloa, awaiting reanimation. This evidence suggests that economies don't require constant governmental supervision to run or even grow. If that's true, impressive GDP statistics are not something that Calviño can take credit for.

There has, of course, been one historic occurrence during her term - Covid. The government responded to that with an illegal lockdown that caused as-yet-unquantified economic damage, as well as unquantifiable social and psychological damage. It was financed and still is being financed by huge borrowing from the European Central Bank and the EU's Next Generation scheme - but funds from the latter source have so far been badly managed or simply disappeared into government coffers.

Urbaneja also points out that not one of Sánchez's budgets has hit a minimum primary surplus, meaning that they have failed to even cover the government's massive public spending (despite GDP growth and tax hikes), that per capita income in Spain hasn't increased and that, for all the coalition's crusading talk of equality, inequality has remained roughly the same. According to Statista, "Spain is one of the most unequal nations in Europe and income inequality in the country is forecast to grow in the near future". One hopes for realism and a capacity for self-criticism from Calviño's successor.

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