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estudios internacionales y estratégicos

The challenges facing the ‘new’ Spain

William Chislett. WP 14/2016 - 3/11/2016

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Index1

(1) Summary – 2
(2) Political scene: uncharted territory – 3
(3) Catalonia: no let-up in the push for independence – 7
(4) Corruption: a serious concern – 8
(5) The judiciary: not sufficiently independent – 10
(6) Unemployment: falling but still very high – 11
(7) Education: need for a political pact – 17
(8) Budget deficit: still struggling to meet the EU target – 20
(9) Exports: flourishing – 22
(10) Banks: in better shape – 24
(11) Foreign policy: punching below its weight – 26
(12) Immigration: well integrated – 28
(13) Demographics: a rapidly ageing population – 29
(14) Conclusion: consensus the watchword – 30
Appendix – 31
Bibliography – 32

(1) Summary2

Although some Spaniards joke that the country has got along fine with a caretaker government for 315 days, this year has been a lost one. There are some pressing issues that need to be tackled now that there is finally a functioning government. But the new Popular Party (PP) government no longer has an absolute majority. As a minority administration it will have to negotiate its laws and reforms in a deeply fragmented parliament, the result of the upending of the PP and the Socialist Party (PSOE) by two new parties, the far left Unidos Podemos (UP) and the centrist Ciudadanos (C’s). The government has a lot on its plate, including the following: (a) belatedly approving the budget for 2017 and meeting the EU’s threshold for the deficit (3% of GDP) in 2018 (a target imposed by Brussels that the PP persistently missed); (b) deciding what to do about the push for independence in Catalonia (the region’s government says it will hold a referendum on the issue in September 2017 regardless of whether the central government approves it or not); (c) cleaning up corruption in the political class; (d) making the judiciary more independent; (e) possibly deepening the labour market reforms in a bid to reduce the still very high unemployment rate (18.9%); (f) reforming an education system whose early school-leaving rate of 20% is close to double the EU average; (g) bolstering the ailing pension system hit by a sharp fall in the number of social security contributors and a rapidly ageing population; and (h) making its voice heard more in the post-Brexit debate.


1 Author of four books on Spain for the Elcano Royal Institute (all available as PDFs here) and of Spain: What Everyone Needs to Know (Oxford University Press, 2013). This Working Paper draws on conferences I gave during October at the Cervantes Institute, Dublin, NUI Galway and the Gibraltar Literary Festival.

2 I would like to thank José Herce, Valeriano Muñoz and María Romero for digging out some statistics.

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