The first Christmas of the recovery

It seems that Hippocrates, the father of western medicine, used to believe that disease was your body’s reaction as it tried to regain by itself the balance lost as a consequence of inappropriate behaviour. There is an old saying that encapsulates this believe: vis medicatrix naturae, which roughly translates as “nature is able to heal itself”. This idea may help us to assess the statement by Rajoy that headlines this article and that we are likely to hear countless times, one way or another: even if it doesn’t feel like it, the recession is over.

Between the late 70s and mid 80s, amid a profound political and economic crisis, Spain managed to get in the right lane: the one that led it to join a democratic, productive and redistributive Europe. The reaction was exceedingly quick and, had we remained in that lane, there is no doubt that things would not be nearly as bad today.

So what when wrong? “¿Cuándo se jodió España?” (1) (“When did Spain get screwed up?”). In my opinion, very early on. We had not yet got over the recession when Seville was nominated for the 1992 World Expo (1983), Barcelona was shortlisted to host the 1992 Olympics (1986) and Madrid was picked to become the Cultural Capital of 1992 (1988). “Los fastos del 92” (1) (The pomps of ’92). But if I had to single out a specific time, I would choose the moment, in the summer of 1988, when the newly-appointed Transport Minister, José Barrionuevo, suggested to his cabinet peers that they change the Madrid-Seville railway line that had been approved two years earlier. Originally it was intended for both passenger and cargo trains with a top speed of 200 km per hour and Iberian gauge. They decided to make it a passenger-only line with a top speed of 350 km per hour and international gauge. The change was agreed after the works had already begun, without a supporting viability plan and they spent nearly all the funds originally allocated to upgrading the rest of the railway network. The Barcelona-Valencia line, which was supposed get a second track, hasn’t been fully upgraded yet.

1988. Although unemployment hovered at 19 per cent, every year there were half a million new jobs; GDP was growing at a rate of 5 per cent; public debt amounted to 40 per cent of the Spanish GDP and it kept diminishing as the economy expanded; that year European funds flowed in at cruising speed.

What came next, especially during Aznar’s two terms and Zapatero’s first, was fever pitch: the high-speed railway network (AVE), the airports, the deregulation of land use ... An excess that, in short, led to two phenomenal imbalances: a bloated construction sector and a deeply indebted population and banking system.

Since 2007 the recession has meant a correction of the former imbalance. As the construction sector shrank, jobs were lost: only two out of every five construction jobs that existed in 2007 still exist today, but the figure has stopped decreasing. Since exports and tourism are creating jobs, in 2014 more people are employed in Spain than in 2013 and from now on the number of people employed will rise year after year. However, four million jobs are needed for unemployment to be at a reasonable 7.5 per cent, while 2014 only saw 275,000 new jobs. At the present rate, we will need fifteen years of recovery to get there.

Can we expect a faster recovery? The one in the 80s was fast, as we have seen, but Spain had a younger body back then. Few of the workers who lost their jobs in the old dockyards, in the steel mills or the factories that manufactured household appliances ever worked again. But their children did; and they were many, coming out of school and college looking forward to living in a new Spain that was full of promises for them and for multinational companies. The young needed homes and the country needed infrastructures. And so they got down to building them enthusiastically.

Now there aren’t many young people and there are few homes and infrastructures that need building. The debt is huge and there is no way it will shrink. The recovery has begun and it will follow its course, but will do so slowly: at the pace that the exporting companies manage to set. Literally speaking, Rajoy is right. But that matters very little.

This is my conclusion: those who hope that the economic recovery will make Spain’s political regeneration redundant, are wrong. Anyone who tries to lead Spain without endorsing change will be engulfed by the wave of discontent that the economy will continue to fuel for many years to come.

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(1) N.T. the original sentence is in Spanish, not Catalan, which is the language of the original article.