The “communists” who are changing the Spanish economy

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The Spanish business community was undoubtedly intimidated by the new Communists of the Unidas Podemos party who took office in January 2020 in the left-wing coalition government, led by the Social Democratic Party (PSOE) and Prime Minister Peter. Would they abolish the monarchy, to establish the imperial democracy and exile Juan Carlos to Switzerland? Do they not believe in God, but in Marx? Would they hold a referendum on Catalonia’s independence?

But the biggest fear was that the ministers of Unidas Podemos would cause the collapse of the Spanish economy. However, so far the relevant doubts do not seem to be confirmed.

According to the Banca de España, the country’s central bank, the growth rate for the current year is estimated at 4.5%, while unemployment stands at 14.5%, a rate very low for the Spanish data. Despite the effects of the pandemic and a less than satisfactory tourist season, Spain is recording a trade surplus for another year, according to the Statistical Office (INE).

Forced co-government with the communists

Prime Minister Pedro Sanchez had no choice but to accept the Communists’ participation in the government. After all, these are just two ministers, but in key positions for the financial staff: Labor Minister Yolanda Diaz and Alberto Garthon, who holds the portfolio for consumer protection. As a counterweight, however, Sanchez took over the ministry of economy from Nadia Calvinio, an internationally renowned economist. As for Sanchez’s “godless friend” in the old Podemos, Pablo Iglesias, he has left since February. As a result, the 50-year-old Diaz now gains complete control of the party.

One of Diaz’s most unusual initiatives at times, perhaps the most unusual, was the recent private audition offered to her by Pope Francis. She says she had a discussion with him about the difficult conditions the Spanish working class is experiencing. The opposition reacted with scathing comments, among other things, why the Minister of Labor used a government plane to attend the meeting with the Pope.

The communist “influence” on the economy

The fact is that thanks to the pressure exerted by the ministers of Unidas Podemos, the minimum wage in Spain has increased significantly from 860 to 1,125 euros gross per month. Even the conservative economist Javier Moriah Gomez, a board member of the Spanish Court of Auditors, admits that the development of the economy is “surprising” and the government’s willingness for dialogue. For his part, Jose Manuel Coralles, a professor at the European University (Universidad Europea), believes that the communist ideology does not really influence the decisions of the Sanchez government in economic policy, despite the claims of the opposition, the Spanish media and the media themselves. Unidas Podemos on the contrary. “Spain had a lot of territory to cover in the field of social security, in securing the rights of the worker and the consumer,” he points out. “Perhaps that is why many of the changes that have now taken place are considered Marxist.”

In conclusion, says Professor Coralles, Spain has managed to reach the necessary compromises. To do so “certainly helped the terror of the pandemic, climate change, the experience of unstable governance and the slim majority in the previous coalition government, but also the 140 billion euros disbursed by Brussels.” In contrast to the 2012 financial crisis, this time Spain has the opportunity to implement economic reforms with a broad social consensus and not on the backs of workers.

The ideological barriers are receding

Until recently, Antonio Garamedi, head of the Spanish Employers’ Association (CEOE), was one of the most outspoken opponents of the left-wing government. Many times he ostentatiously left the “table of social dialogue” convened by the Minister of Labor. And yet, last summer, even Garamedi spoke for the first time in positive terms about the government’s decision to pardon incarcerated Catalan separatists. He was later criticized by the opposition, but the government took the message and returned to the offer of “social dialogue”.

The fruit of the dialogue was the “education pact”, while Garamedi is now negotiating with the Minister of Labor and the unions a “reform” for the labor market. The minister herself now accepts flexibility in labor relations, although already today one in four contracts signed in Spain is “fixed-term”. Another Diaz retreat concerns compensation in the event of dismissal. As has been the case in recent years, those who lose their jobs are compensated with an amount equal to 33 days’ wages per year of work and not 45 days, as was the case before the crisis. In return for this retreat, Diaz is urging companies to be more willing to hire and retrain employees.

Changes in the real estate market

Finally, the Unidas Podemos tried to curb arbitrariness in the real estate market with new legislation, which provoked a strong reaction from the conservative opposition, although in reality it is doing nothing but adapting Spanish legislation to what is happening in the rest of Europe. The left-wing government of Madrid, for example, has set some kind of fair rental rates, such as in Germany (Mietspiegel), so that each tenant can be informed of the average rent in each city and neighborhood. and decide accordingly on his next moves. In addition, the Spanish government increases the tax burden on those properties that remain uninhabited and strengthens the construction of social housing.

All this meets the conditions set by the European Commission in Brussels, in order to disburse significant funds from the Next Generation Fonds fund (70 billion euros in direct grants plus many more in the form of a loan). And so, says Professor Corals, the “communists” are the ones who will remind the socialist Sanchez in the years to come that “there is still much to be done until social policy in Madrid approaches the standards that apply in countries like Germany.” .

Source: Deutsche Welle

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