The inflation monster had already come to see us. It is not idle to remember that during the governments of the so-called economic 'miracle' of the PP, for example, the Secretary of State on duty appeared to analyze the CPI data that the National Statistics Institute (INE) offered monthly. The figure was so important that even concepts such as the evolution of 'the underlying' were in the public domain. In fact, although far from those figures of over 20% that democratic Spain suffered in silence after the dictatorship, the turn of the century found the then 'boss' of the economy, Rodrigo Rato, dealing with rates around 4 % that then seemed like a drama as long as they were light years away from the 2% target set by the European Central Bank (ECB). "It is not sustainable that Spain maintains an inflation differential of between 1.3 and 1.6 points with respect to the EU average," the then almighty vice president confessed. What's more, it was the year 2002 and the Madrid politician openly recognized that price drift was the Achilles heel of an economy whose cruising speed was the envy of Europe and was praised by the most prestigious international media.
In that context, intermediate positions in those governments, such as José Folgado -sad victim of Covid-; Elvira Rodríguez -now in charge of the PP's economy- or Luis de Guindos himself -heavyweight in the ECB-, insisted on the same mantra. See, that an out-of-control CPI should not cause a "price-salary spiral", that is, that the rise in the cost of living should in no case affect the principle of salary moderation and be incorporated into salaries via collective bargaining . Other somewhat more sophisticated formulas were also used to say the same thing. It was not uncommon to hear the argument that "short-termism" should be avoided at all costs, which involved indexing long-term worker remuneration with strictly temporary phenomena. In those days, with the documentary support of the Bank of Spain, the theory that wages should not be increased in line with inflation, but rather with productivity, made a fortune. A desideratum of useless theoretical confrontation but one that collided with a Spain that is as much or more dependent on the service sector than today and with too many jobs without generating added value.
All these arguments, more than a decade later, have been revived in recent months, causing a disturbing 'déjà vu' among locals and strangers. To begin with, December ended the year with an annual growth rate of 6.5% in the CPI. The question is not trivial, since these are figures that have not been seen in the last 30 years. "We have to avoid the second round effect, that this rise in prices ends up impregnating the entire economy, salaries, food prices...", explained Pedro Sánchez at the start of the year, recovering those arguments that so His 'popular' rivals reeled well in their day… and their 'populist' friends criticized so much. "Inflation derives from the resounding absence of economic policy," the PSOE general secretary, José Luis Rodríguez Zapatero, reproached José María Aznar almost 20 years ago. The same could be applied now to Sánchez and his Minister of Economy, Nadia Calviño, who are watching from the sidelines and as if it were not with them a scenario that was then temporary and motivated strictly by energy prices. If that were the case, only the 'paper' in the challenge of the Minister of Ecological Transition, Teresa Ribera, would have deserved a decision.
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However, and in contrast to the official theses, there are many instances that already warn that the phenomenon will last longer than predicted by the Executive. Without going any further, the General Council of Economists started the year warning that the increase in energy prices has already spread to other products and that, therefore, the second round effects are already a reality. Luis de Guindos himself, in the end, the authorized voice of the community supervisor, has also freely admitted that the episode of inflation threatens to become a saga and that this may "not be as transitory" as initially thought. The Federal Reserve (Fed) itself has considered it "justified" to advance a rise in interest rates in view of the trajectory set by prices and the German bond traded positive last week for the first time since 2019, due to fear of a withdrawal of stimuli. From here, the question is clear. How do we harmonize economic orthodoxy, which invites wages to remain unchanged, with the needs of families that have just suffered the impact of a pandemic and are having trouble making ends meet?
The same theory that supports the theses of our illustrious leaders also reminds us that inflation is one more tax, silent and consequently more lethal, that drains income and impoverishes households, which at the end of the day can acquire fewer goods with the same money. Is the empathy of the Government towards these families only enough to ask them for patience, tell them that it will go down and that they endure the pull? Something more would be expected. In fact, the evolution of prices hits a country with exceptionally low salaries when compared to those raised by others in its environment. For example, the 2,038.6 euros of average gross monthly salary that, according to the INE, Spain scored in 2020 are in line with those of Cyprus or Greece, but they are far from the 38,000 euros per year in France and light years from the 47,000 from the United Kingdom or 52,000 from Germany. A simple division is enough to verify the difference. Better not to consider the blow that inflation supposes for pensioners, especially for retirees, who on average barely reach mileuristas. It does not seem easy for the discourse of wage containment in the face of the CPI explosion to reach those who face so many difficulties in their day-to-day lives, while they see a non-transparent distribution of billions in European funds.
For two decades, politicians of both sides have been fighting every day with the knife between their teeth to gain a foothold in the political fray. The controversies, mostly sterile, come and go at breakneck speed as appropriate to the potion of the ideologue on duty. The 'Italianization' of Spanish politics, made flesh in the months before and after the motion of no confidence that evicted the PP, has prevented any substantive debate on the long-term road map. For this reason, there was little doubt that Sánchez would raise the CPI for pensioners and whoever protests the most... when it is time and as long as it benefits his electoral objective. In a society that has cultivated a culture of benefit, it is easier and brings fewer complications than undertaking a real change in the pattern of growth of the economy, essential to implement a new income policy that helps to cope with specific vicissitudes. It would be about getting on the train of the new value-generating sectors, those that increase the total productivity of the factors, from engineering to biotechnology through the development of artificial intelligence. It is not done in a day, but the path has been known for decades. Lost time.