Strong attention from the Economic Circle in the Opinion Note prior to next week’s XXXVIII Meeting in which they warn of the impoverishment of Catalan and Spanish society compared to Europe over the last fifteen years. The institution chaired by Jaume Guardiola recalls that, “while before the financial crisis Spain’s per capita income was 9% lower than the European one, by 2022 the gap had increased to 17%” (see chart).
When the figures for the Catalan economy are analyzed, they are even more negative, because not only has the situation worsened in relation to Europe, but also in relation to Spain. In Catalonia “since the beginning of the century there has been an absolute stagnation of the standard of living and a relative decline compared to Spain and Europe”. The figures show that “in 2000 the per capita income in Catalonia was 24% higher than in Spain and 20% higher than the EU average. In 2021 these percentages had been reduced to 17% and 1%, respectively”.
The reasons that explain the decline in Catalonia and Spain are due to low productivity and the lack of a match between the demand for labor and the supply. In a press conference to present the Opinion Note, Guardiola added that another of the major obstacles to the growth of wealth in Spain and Catalonia has been the absence of a reform agenda due to the impossibility of the parties to reach to consensus
In the case of Catalonia, additional elements are added as a result of the independence process of recent years. El Cercle quotes one: “The flight of companies, especially the largest ones, as a result of the process has aggravated this problem. The most worrying thing of all is not only the direct impact of this exit, but also the reputational effect it entails, which penalizes Catalonia for the location of business decision centers”.
The note adds that “the poor performance of the Catalan economy has gone hand in hand with a progressive deterioration of some basic social services in Catalonia, increasingly strained by growing demand and an obvious lack of resources”. and cites “primary healthcare and public transport”. For this reason, he considers that an improvement in regional financing is necessary.
Guardiola emphasized that the “stagnation” of Catalonia and Spain is one of the axes on which this year’s Note of Opinion and also the next meeting revolve. Guardiola and the other members of the Circle will be able to convey this concern both to the president of the Spanish Government, Pedro Sánchez, and to the president of the Generalitat, Pere Aragonès.
The institution also claims that there is a lack of leadership from the Spanish and Catalan governments to push ahead with projects such as the airport. “It is necessary to act with determination and speed. Doing nothing, everyone knows, has and will have an astronomical opportunity cost for the Catalan economy”, he adds.
In the face of the elections, the Circle asks the political parties for a long-term vision. “Today the main difficulty in Spanish politics is a dynamic of parliamentary polarization of the two major parties which has worrying consequences from a legislative point of view and in the implementation of a reformist agenda”.
Regarding the design of the Generalitat’s action, the general director of the Circle, Miquel Nadal, called for changes in industrial policy to make it “more proactive and powerful”. In his opinion, this policy must be more “selective” with the projects that are chosen and there must be more collaboration between the three administrations.
With regard to pensions, Guardiola warned of the imbalance which means that retirees see their benefit increased the same as inflation and, instead, workers are asked for moderation. According to the Circle’s opinion, “including pensions in these moderation agreements would have been an act of intergenerational justice”.
To the questions about why the Circle has taken so long to warn of the loss of wealth of the Spanish and Catalan economy compared to the European one, Guardiola replied that “we have lived through two crises in a row and we have a strong tendency to evaluate the short deadline and it’s hard for you to look up”. To summarize, Guardiola assured that after the dictatorship Spain lived 25 years of clear convergence with Europe and another 20 years of stagnation.
