As in all economic crises, the most difficult thing is to land in the harsh reality. 2008 saw the last crisis, denied until it was inevitable. It is happening again even if, this time, no longer any prestigious economist denies the evidence after an accumulation of indicators reflecting symptoms that were already there at the beginning of the year, if not before, which now reemerge reinforced. From Brexit to trade escalation between China and the United States; from the slowdown of the German economy to the alarm in the stock exchanges; from the decline of production levels in EU countries to the unusual behavior of US Treasury bonds that already give long-term (ten years) less profitability than short-term bonds (two years). We could go on, but it would be in the same direction.
While economists debate on three fundamental questions, whether the crisis will begin in this fourth quarter or at the beginning of 2020, whether it will be long or short and whether it will be as deep as the last one, here the acting Spanish government is still in a dream world. Pedro Sánchez enjoying his holiday in Doñana while we know nothing about the contingency plans that the minister of economy, Nadia Calviño, should be making, once her hopes of getting the general direction of the International Monetary Fund met with reality and Spain had to withdraw her candidacy due to lack of support.
The Spanish economy fears these three issues: a Spanish public debt totally out of control, above 100% of GDP and growing; the withdrawal of stimuli to the Spanish economy, with the ECB that is not going to lend Spain any money and will require that the money borrowed is returned at an interest, and Spain's nil capability to enact an action plan since what lies ahead is Pedro Sánchez's investiture which he cannot face with economy cuts. However much the Spanish authorities refuse to hear of it, nothing has been learned from the previous economic crisis, the fragility is the same but greater and there is noting left to the citizens but wait and see when they will be told the truth.
Regarding Catalonia, little can be expected of folders that should be unlocked: the new autonomic financing system will have to continue waiting, even if it has expired since December 2013; the general budgets will have to adapt to this reality and investments in infrastructures that are urgent will have to be forgotten; and we will see a Sánchez who will do as former PM Mariano Rajoy, and as before him Zapatero, new cuts to the welfare state. Depending on how things go, it will not be Sánchez who will not seek the agreement with Podemos. It will be Pablo Iglesias who will not be able to assume the economic policy that Europe will impose on Spain.