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More pain in Spain

Michael Reid: Bello columnist; senior editor, Latin America and Spain, The Economist, MADRID

A weak government looks to Europe for help

HOW FAR behind the rest of Europe will Spain’s economic recovery lag? And will the
resentment of the many losers from the covid-19 crisis translate into destabilising
support for extremist forces? These are the big questions facing the country in 2021.

A long and severe lockdown, the wiping-out of the tourist season, disruption caused by
renewed outbreaks of covid-19 and less fiscal firepower than some of its neighbours all
conspired to plunge the country into a deep recession. The economy shrank by around
12% in 2020 with the loss of 1m jobs. Recovery has begun but it is complicated by a
strong resurgence of the virus and renewed restrictions on leisure activities.

The recovery is also lopsided. Spain is unusually dependent on tourism (12.3% of GDP
in 2019 ) and other face-to-face businesses. Nobody wants to go back to a generalised
lockdown, but some regional governments will struggle to organise effective tracking,
tracing and isolation of those infected with the virus.