How the pandemic is MAGNIFYING Spain’s failures

The coro­n­avirus pan­demic has shocked the world as few events in re­cent times have done, let alone the fi­nan­cial cri­sis of 2007-2008. The world econ­omy has ef­fec­tively been brought to a halt, with sup­ply-chains frozen and a total in­ter­rup­tion of world avi­a­tion. Con­se­quently, lay-offs and bank­ruptcy calls are hap­pen­ing from day to day, in al­most every cor­ner of the cap­i­tal­ist world. Fur­ther­more, the pan­demic has am­pli­fied the good and bad in gov­ern­ments. Bor­row­ing from the say­ing that some­one’s true char­ac­ter is only re­vealed in ex­treme sit­u­a­tions, the re­silience of na­tion-states is also tested when things get dire.

To be fair, given the sever­ity and sud­den­ness of the shock, no gov­ern­ment has been left un­scathed, one way or an­other. Yet, sadly, Spain is again among the worst per­form­ers, if not the worst, tak­ing into ac­count that it cur­rently leads the sta­tis­tics of deaths per mil­lion peo­ple, far above the fig­ures of its two neigh­bours, to take them as a handy bench­mark: with 386 cases, it is far above Por­tu­gal, with just 52 cases, and even France, with 229.

This hardly comes as a sur­prise in Cat­alo­nia, pos­si­bly be­cause things are seen with a less acrit­i­cal per­spec­tive than from Madrid, which gob­bles up al­most all the pub­lic opin­ion in the coun­try. Spain is once more bla­tantly fail­ing a big new test, pre­cisely at a time when the gov­ern­ing left-wing coali­tion could prove that the state has left be­hind for good its ghosts of the past. Hith­erto, as in re­cent sce­nar­ios, the recipe from Madrid for fight­ing back against the pan­demic has been to stub­bornly in­sist on the sacro­sanct unity of the state! Be­yond the rhetoric, this has meant that the re­gions’ ma­noeu­vra­bil­ity has se­verely been cur­tailed; para­dox­i­cally con­sid­er­ing that pub­lic health is in­deed a com­pe­tence of the au­tonomies them­selves. This con­trasts with Ger­many, which has pur­sued a ra­tio­nal di­a­logue be­tween the fed­eral gov­ern­ment and its re­gions, leav­ing them with al­most full dis­cre­tion.

Given the fac­tors above, the Span­ish strat­egy, rather than se­cur­ing the virus in Madrid (since the be­gin­ning, the cap­i­tal has been where the virus has been most se­vere), has de facto fa­cil­i­tated spread­ing it to the re­gions. Ac­cord­ingly, the gov­ern­ment in Madrid re­peat­edly ig­nored the Cata­lan and Basque gov­ern­ments’ claims for real au­ton­omy in man­ag­ing the pan­demic at the local level, thus wast­ing pre­cious time. Per­verse as it may seem, the script dic­tated by Madrid was that the cap­i­tal was not to be locked down, no mat­ter the cost (in­clud­ing in human lives).

The crude re­al­ity is that, due to its ever­last­ing bud­get im­bal­ances, the Span­ish gov­ern­ment has very nar­row room for ma­noeu­vre to face the eco­nomic strains of the pan­demic. As ex­plic­itly in­voked by the EU’s fis­cally or­tho­dox part­ners, Spain has not taken ad­van­tage of the past 10 years of eco­nomic ex­pan­sion to fix its pub­lic ac­counts, ba­si­cally by lim­it­ing its pub­lic spend­ing in-line with the coun­try’s means. That has made it es­pe­cially vul­ner­a­ble once ex­ter­nal shocks ap­pear. Con­se­quently, faced with the dire sit­u­a­tion ahead, of un­sus­tain­able fig­ures in its ac­counts (eg, a pub­lic debt jump­ing from the cur­rent one of 100% of GFP to be­yond 120%), these days the gov­ern­ment is gam­bling big: it is forc­ing peo­ple to go back to work to spur the econ­omy, hop­ing that the peak of the pan­demic is some­thing of the past.

Notwith­stand­ing the moral issue at stake here, given the pos­si­ble ef­fects in terms of human lives, need­less to say, all of this has a high eco­nomic risk: in fact, fu­ture peaks of peo­ple in­fected could mean an even higher bur­den on the cof­fers of the state. Hope­fully, within the gloom of the sit­u­a­tion, this could be an eye-opener for most peo­ple, re­gard­ing the ne­ces­sity that Cata­lan in­sti­tu­tions be no longer at the mercy of an in­com­pe­tent, un­sus­tain­able and un­re­formable state.