The strict economic measures imposed by the European Union on the Spanish State have been implemented in various steps. At the beginning of the recession, measures were taken in favour of “competitive devaluation”. With the increase in the unemployed, a rapid fall in the wages of the workers was sought. To this end, the key was labour market reform. In the absence of devaluation of the currency, within the euro, the only way to improve competitiveness was the fall in labour costs. Job losses and wage cuts led to a marked decline in both income and social contributions. These decreases had an immediate effect on the fall in public revenue.

The second step was cuts in public spending, especially in social spending. Using the logic of the decrease in the financial resources of both the governments of Madrid and Vitoria and Pamplona, there have been strong cuts in education, health and other social services and qualifications. We now know, for example, that the hole in pension funds – EUR 16.5 billion in the state – has been a slight increase in social contributions due to the reduction in wages.

Now comes the time when the increase in social and economic inequalities is set. The report presented two weeks ago by Oxfam, the NGO federation, clearly shows that: After Cyprus, the Spanish state has been the country where there has been the greatest increase in inequalities in income distribution between EU countries since 2007. As a result, 30% of Spaniards are at risk of poverty or social exclusion. Conversely, companies listed on the Ibex35 in the first nine months of last year achieved a 22% increase in profits. Considering the size of unemployment (21.2%) and the low quality precarious employment that is being created, social cohesion can increase further in the future.

The 3% increase in last year’s GDP and the additional EUR half million in Social Security are positive macroeconomic data for a long time. But in view of the serious problems facing the Spanish economy at the moment, the seven-year recession is not going to end. First, public debt has grown very strongly in recent years to reach 100% of GDP. Moreover, if public money received by banks is included, public debt is 132% of GDP. Last year's government deficit was 4.5%, three tenths above the limit set by the European Commission. And the external debt is also huge for the Spanish economy. In total, the Spanish State is in the eighth country in the world in terms of total debt.

The deficit target imposed by Brussels in the last eight years could not be achieved by the Spanish Government and it is difficult for the next government, whatever its color, to meet the 2.8% of GDP target set for 2016. Compliance with this objective will require an additional reduction of EUR 9 billion (amount earmarked for infrastructure in one year). The new government will therefore have to resort to deepening cuts.

After a long period of austerity, the increase in social spending has increased, as we have seen in the last election campaign. But it is difficult for the new government to give an adequate response, insofar as the chances of rising tension with Brussels are wide. The new government will have to knock on the door of the Commission to call for more flexibility. It is normal that an extension of the deadline is required to meet the public deficit target. But some of the members of the European Commission, including Social Democrat Pierre Moscovici, want stricter measures, want the new government to bring forward additional adjustment measures and do not want to extend the deadline to meet the deficit. The seven years lost have not been enough.