In some ways life will become easier for the minority left-wing coalition government of
Pedro Sánchez, the Socialist prime minister. A decision by Ciudadanos, a centre-right
party, to rally round seems likely to help him pass a budget. He will hope to avoid
having to reduce emergency aid to workers and businesses too soon. If things go well,
the economy could grow by 7% or so in 2021. The government places high hopes in the
€140bn ($165bn) it expects over time to get from the European recovery fund. Most of
this will go on projects such as renewable energy, digitisation or reforms of training
schemes that will yield benefits only in the medium term.
So far Spaniards have been admirably stoical. But as they endure the second economic
shock in a decade their patience may wear thin. The previous crisis gave birth to
Podemos, a far-left party that is now the junior partner in the government. The current
one may boost Vox, a hard-right party which became the third-biggest force in
parliament in elections in 2019. Despite falling support for independence in Catalonia,
the separatist parties there will hope to benefit from the apathy of their opponents in a
regional election due on February 14th.
Mr Sánchez will muddle through. If the economy recovers strongly and the pandemic
recedes he could call a snap election before the inevitable fiscal adjustment of 2022. His
Socialists would hope to make gains at the expense mainly of Podemos. However, the
likelihood is that Spain faces more years of weak government.
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