WE MUST remember the words carved on the door of Dante’s Hell, which end with this “You who enter, abandon all hope”, because it is almost impossible that this year we begin to overcome a crisis that is worsening in almost the entire planet and without a truly clear course of action has been identified to get out of the problem.
In our country the bad prospects are officially recognized, finally. The Government foresees a decrease in the Gross Domestic Product (-1.6%), an unemployment rate of 16% and a public deficit of 5.8% of GDP. And it is that two of the engines of the economy are going to decrease: private final consumption (-1.5%) and gross fixed capital formation (-9.3%). The final consumption of public administrations grows, it was not lacking more, although only 2.1%.
In Andalusia the features could be more dramatic, according to the BBVA report presented last Thursday, and due to the greater relative weight of construction or tourism and other socioeconomic factors characteristic of the region. The unemployment rate could reach 22 percent and the decrease in GDP could be higher than the national one.
According to the Government, we will see the light in two years and this trusting in the impact of structural reforms that have not yet been implemented, such as, for example, the transposition of the Services Directive vetoed until now by Catalan politicians. The current socialist stage, on the other hand, has not shown much desire to undertake deep and uncomfortable economic reforms.
The truth is that no institution can predict with certainty when the world economy might recover and, what is worse, it does not seem that public actions are contributing to a quick and effective recovery. Such actions are the reduction of the interest rate of the central banks, the contribution of unlimited resources to the financial sector, meager aid lines for companies and the growth of public investment.
They will not be of much use, in the best of cases, if private consumption does not grow, as shown by the Japanese experience of stagnation compatible with low interest rates and high public investment. That should be the perspective of actions that are not only palliative. It is required, first of all, to stimulate people’s confidence in their own future and in the results of government management, which seems to me very difficult to achieve here and just what seems to be a quality of the new US president.
Secondly, citizens must have greater availability of money, which can only be achieved with a forceful reduction in taxes, such as the one announced in the US. In our country, its counterpart cannot be more of a deficit, but rather the reduction of public spending, which is perfectly expendable. And, in the meantime, to set an example and share the costs of the crisis, we civil servants should accept a freeze on our salaries, which is not much in return for job security.
