Spain is caught in a vicious circle of debt crisis, low productivity, unemployment, public mistrust and centrifugal forces from which it does not seem to be able to emerge. At the end of April 2013, the government had to correct its economic forecast: The economy will shrink by 1.3% in 2013, compared to a previous estimate of 0.5%. Furthermore, a new record number of 6.2 million unemployed was announced. The government had to admit that the results of the previous reforms have not yet shown the expected results. On Friday, 29 of April, under pressure of the EU, Mariano Rajoy’s government presented a new austerity package to tackle public debt and the economic crisis. What is striking in the new reform package is a firm commitment to reduce the budget deficit. But the package does not include new measures; most are an extension or deepening of previous reforms.
What is even more striking is the government’s lack of commitment to in depth institutional reform. The conservatives are not willing to open the debate about the institutional changes that are requested by the citizens and necessary for economic recovery. An in depth assessment of the key democratic institutions, governing aspects such as the electoral law, the party law and the structure of the state, while advocated by many political actors, the civil society and the academia, are not being addressed by the traditional two parties – PP and PSOE.
To overcome the current economic and political crisis, Spain needs more than new policies, it needs a new institutional framework.