In a previous episode (Madrid: the Capital of Capitalism), we explored the nature of governance in Spain's capital. However, the bigger picture for the largest country on the Iberian peninsula is one of political turmoil and deadlock. Economist Daniel Lacalle joins us for a thought-provoking discussion and a somewhat cautionary tale for the Caribbean region.
The current political stalemate stems from the 2017 Catalonia Declaration of Independence, which Lacalle describes as more of an unconstitutional pantomime of an actual coup d'état. Despite having no legal or even historical basis for independence, Lacalle notes the knock effects that this event has had on Spanish politics even to this day. The parties who engineered and participated in the coup have been allowed to form a coalition government which is unsurprisingly and consistently at loggerheads with the ideologically dissimilar ruling party it is now bonded with. A major point of contention is a recently passed amnesty law that allows the most egregious offenders, to be pardoned for sedition and thus remain in power. The result is a stagnant legislative and executive arm of government that is paralyzed by infighting.
How does Spain's prosperity persist against these odds? Lacalle posits that the country is not where it should be economically. And that the government's growth reports are mostly deceptive, hiding inflationary gains following the downturn from the COVID-19 pandemic. This resembles the reporting from some Caribbean countries, keen on maintaining the delusion of a rebound after the hard-hitting effects of global tourism shutdowns.
The key takeaway is the air of distraction from the real economic and political thorns in Spain's proverbial sides and the lengths to which a discordant government will go, to deflect from these issues. Once again, how can the Caribbean region learn from the pitfalls of political fracturing that can grossly impede the progress of even the world's largest economies?
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