To say right now that Russia's invasion of Ukraine is causing inflation, price increases and a slowdown in Spain's GDP growth, as Pedro Sanchez did this Wednesday in the Congress of Deputies, is, sincerely, to say almost nothing at all. Proposing a package of economic measures, many of them lacking in detail, on the price of energy, whether petrol at the pump or in electricity bills, reopening the door for ERTO furlough schemes as during the pandemic, and raising lines of credit for the affected sectors, is not a plan against the crisis. A plan is something different - one only needs to ask the many companies affected how they have reassessed the falls in their own revenues and the rampant growth in spending. At best, what the Spanish prime minister is trying to do is throw off the illness, which is serious and profound, and not just about the pandemic and the war, by taking aspirins. And this, surrounded by a dubious credibility, since the forecasts of a couple of weeks ago made by deputy PM for economy Nadia Calviño were this, predictions that failed to focus on the harsh reality that has finally arrived.
With the announcement this Wednesday, still provisional, that Spain's year-on-year inflation is at 9.8% ―by the magic of politics, Sánchez tries to counter-programme the news in the Congress of Deputies with promises that have no cost and always provide juicy and generous headlines― we are taken back to the year 1985. Thirty-seven years ago we paid our bills in pesetas, Spain signed the treaty of accession to the European Union, abortion was partially legalized, Felipe González ruled, Jordi Pujol had an absolute majority in Catalonia, the bodies of Lasa and Zabala were found, unemployment reached three million in Spain, 17% of the workforce, and it was beginning to be seen that it would end up being an endemic problem for the economy, and at Eurovision, Paloma San Basilio sang La fiesta terminó - the party is over. A title that is certainly current, although the last to realise that are certain politicians.
We are facing a perfect storm that will make us a poorer country all of a sudden, because this almost ten percent inflation, which will not be offset by a similar increase in wages, will be as if salaries suddenly drop by that percentage. Shortages of raw material supplies are already beginning to be noticed and, pending the release of data from the eurozone as a whole, Spain will be among the worst hit, if not the worst hit, by inflation. Because it is true that it has shot up everywhere, but 6.1% in Germany is not the same as 9.8% in Spain. We will also see how the growth forecasts are being clearly adjusted downwards, and the Germans have already done this, winding a 4.6% growth forecast for this year right back to 1.8%. All this in a framework of uncertainty that has the war as an important issue, but not the only one.
The severity of the situation, and the level of concern that the Spanish executive has about it, are illustrated by the government's move this Wednesday to authorize, as an exceptional and temporary measure, it says, for supermarkets to limit the quantity of products that customers can purchase to avoid running out of stock. Such a measure has never been passed on to retailers, and there have been severe economic crises in recent years, although it is true that they have not been quite like this, and if this sounds like anything to the oldest members of the population, it is rationing, a truly ugly word. At the political level, perhaps the most worrying thing is that in previous economic crises, such as the financial crisis, the protest was channeled into movements such as the Indignados, whereas now, if we look at the polls, it is far-right Vox that hopes to ride the wave of popular protest.