I already wrote that inflation was the most fearsome enemy of Sánchez and Calviño. Last week I insisted that world inflation, which has changed the monetary policy of the United States, and the tensions with Russia over Ukraine would mark 2022. And on Friday the managing director of the IMF, Kristalina Georgiev, stated at the opening of the Davos conference, this virtual year, that the global recovery will continue “but that it is losing strength due to much more persistent inflation than expected”.
And the CPI, the consumer price index -not Pablo Casado, nor the permanent fights with Podemos- is the evil enemy of Pedro Sánchez that can break the not very high confidence of the Spaniards in their Government. True, Sánchez resists. On Thursday he won a relevant battle in the Supreme Court, when the Third Chamber refused to even consider “due to lack of legitimacy & rdquor; the resources of the PP and Vox against the pardons to Catalan politicians. And recent reliable surveys – that of ‘El País’ and ‘El Confidencial’ – give a slight electoral advantage to the PSOE. The one drawn by the CIS is even greater, but the Tezanos CIS is highly discussed today. For his part, the minister Write, more combative than expected, has announced that In January, employment continued to be created (about 60,000). For the month of the famous slope is not bad.
On the other hand, Sánchez faces a difficult vote in Congress to validate the labor reform agreed with the CEOE and the unions. And if he loses it, the slap will be strong. And sounded. But his great challenge is not so much the political one as the inflation that can ruin the rosy horizon that Calviño has been painting.
The proof is found in a simple rule of three. U.S it is growing strongly and unemployment has fallen to 3.9%, almost full employment, but Americans are unhappy because inflation has reached 7%, the highest in 30 years, and they are losing purchasing power. The response of Powell, the president of the Federal Reserve, according to Biden, has been to make it official that it is not convenient to stimulate the economy, that it no longer needs support, but to fight inflation by withdrawing money from the economy and raising interest rates. Curb consumption and investment so that inflation does not end up punishing them even more.
The rise in prices is the great enemy of all governments because it silently pierces the pockets and savings of citizens
The United States, with 3.9% unemployment, can afford it. May Spain with similar inflation, but with 14.57% unemployment? Obviously not. In addition, it could not do it either because monetary policy depends on the ECB. Y Christine Lagarde, with an average in Europe of 5% believes -or wants to believe- that inflation is circumstantial and fortunately resists raising interest rates.
But, then, is Spain condemned to coexist in the coming months with high inflation that, sooner rather than later, could trigger the price-salary spiral and further aggravate the very delicate and crazy political scenario? Well yes. It does not seem that the Government contemplates another option than pray that natural gas and electricity moderate their rise (difficult due to tensions with Russia) and that wages are contained. Javier Pacheco, leader of the CCOO in Catalonia, speaks of reasonable increases of 3.1%, the average inflation of 2021, and the governor of the Bank of Spain asks for an income pact. Calviño sighs because the ECB is right and finally the IPC ends up moderating. But what if it isn’t?
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Also, with a inflation 1.5 points higher than the European average, Spain is already walking on the wire, which cannot fail to have negative consequences. The CIS Consumer Sentiment Index, which ranges from 0 (low) to 200 (high), recovered quite a bit last June (when we took off our masks) to 97. And it remained above 90 until October. But now – inflation and omicron through – it has fallen back to 81 in December, which can only contribute to degrading the economic and political climate.
For all these reasons, whatever the result of Castile-Leon on February 13, winter will be hard for Sánchez. And when spring comes the battle of Andalusia. But the IPC is its great enemy because it treacherously pierces the pockets and savings of voters.