tardigrade

A new fiscal model proposed by Spain's finance minister for its regional governments has faced a heavy backlash from regional leaders, who accuse the central government of toying with public finances to win political favours as it struggles to hold its fragile coalition together.

The Socialists, who head a minority coalition government, struck a bilateral deal with Catalonia at the behest of separatist party ERC that guarantees the region will receive the same amount in services as it pays in taxes, while other governments receive varying amounts.

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That has infuriated the country's other regions, with some threatening to take the state to court for, they claim, contravening the constitutional principle that no territory should be given a financial advantage over another by the central government.

Economists and ratings agencies have also expressed concern over an additional 21 billion euros promised in the model by the state to regional governments, worsening Spain's fiscal position when it is already buckling under the strain of higher pensions and pressure to boost defence spending.

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Spain's central budget is still being rolled over this year from its 2023 version after it failed last November to secure backing from the conservative opposition People's Party, hard-right Vox and hard-left Podemos for a new proposal.

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Serbia entered 2026 in full pre-election mode — even though a date for a parliamentary election has not yet been set.

After more than a year of protests, student blockades and political tension, Serbian President Aleksandar Vucic has accepted the challenge posed by students and citizens who have been demanding a snap election.

Nevertheless, just when the president will call that election remains to be seen.

Over the course of the past few months, Vucic has gradually narrowed down possible dates for a poll, moving from a vague promise that the election would take place "before the legal deadline," through information that it would be in "late 2026 or early 2027" to the latest announcement that suggests a vote could be held in October, November or December.

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By the end of 2025, the mass protests that had been taking place across Serbia since November 2024 had largely subsided: Faculty blockades were lifted, and students returned to class.

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In related news, the upcoming visit of the mission of the European Parliament’s Committee on Foreign Affairs (AFET) to Belgrade has triggered a harsh reaction from Serbian high officials, including President Aleksandar Vučić and Speaker of the Parliament Ana Brnabić. They claim that the MPs were coming to the country “uninvited”, stressing that they had no intention of meeting the delegation from Brussels ...

The members of the European Parliament are scheduled to visit Serbia from 22 to 24 January, in order to assess the situation on the ground, speak with relevant actors, and, based on that, define the next steps of the EP towards the country.

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Aleksandar Vučić said that he did not want to see or talk to the MEPs from Brussels “who are coming to Serbia uninvited”.

“I have no intention of wasting my time… The EP delegation decided on the timing of their visit on their own… I will be at the World Economic Forum in Davos during their visit”, Vučić stated during his visit to Abu Dhabi.

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He clarified that the delegation, which comprises MEPs from various political groups, aims at “gaining a complete picture of the situation in Serbia, through direct conversations with those who reflect the sentiment of the Serbian people”.

The Serbian opposition parties strongly criticised the officials for their unwillingness to meet with the EP delegation. Stefan Janjić, a MEP of the “Serbia Centre” party, denied the claims by Ana Brnabić that she was not informed about their arrival in Serbia.

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On 10 November 2023, Hungarian Foreign Minister Péter Szijjártó travelled to Caracas, the capital of Venezuela. His visit came 31 years after the last time a Hungarian foreign affairs delegation had visited the country. Szijjártó justified the visit with “the changed international context”. He met with president Nicolás Maduro, Minister of Oil Pedro Rafael Tellechea and Foreign Minister Yván Gil. Gil and Szijjártó even signed an agreement between the two countries.

Based on the communiqué about the visit and Szijjártó’s posts from the time, the Foreign Minister had high hopes concerning Venezuela. For example, he posted a photo of himself and Maduro, commenting that they agreed that “amidst the current changes in global politics, the main responsibility of elected officials is to defend their country’s sovereignty and to resist external attempts at interference. According to another one of his posts, “Venezuela is opening up to the world, and the Western world is also opening to Venezuela. Whoever is here first will reap the benefits”.

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The ... Hungarian Ministry of Foreign Affairs published at the time ... wrote about Venezuela’s vast oil reserves and its gas extraction, which is why the representatives of MOL and MVM (Hungary’s two energy giants) also accompanied Szijjártó. According to the statement, they started negotiations about the possibility of importing natural gas from Venezuela, while Szijjártó argued for the easing of the sanctions which were in place against the country.

This could easily make one believe that Venezuela is an important ally of Hungary and the Hungarian government ... Although many have now recalled that in 2024, Hungary vetoed a joint EU statement on the disputed results of the Venezuelan elections, the truth is that it joined the initiative with a delay. But following Maduro’s kidnapping by US forces on 3 January this year, only 26 of the EU’s 27 member states called “for calm and restraint by all actors, to avoid escalation and to ensure a peaceful solution to the crisis". There was one country which did not support this: Hungary.

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It would therefore seem logical to think that Hungary stood up for its partner with whom it had sought an intensive economic relationship, but the comments coming from the government are telling an entirely different story. Balázs Orbán, the Prime Minister’s Political Director [not a relative to the PM], for example wrote that “the hundreds of Hungarians evacuated from Venezuela have told us about the oppressive dictatorship that had been established there”. And pro-government Mandiner’s journalist, Mátyás Kohán was quick to present the insignificant data relating to the trade between the two countries. He wrote: “Here, you can see proof of the friendly relationship and the huge deals between Péter Szijjártó and his “buddy”. This, as you see, equals zero. There has never been any strategic agreement, gigantic deal about energy resources.”

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The events of the past few years therefore show that the Orbán government has long approached Venezuela without any moral compass or sense of values: when the need arose, they rescued people from there; when there was an opportunity to do so, they sought to do business there; and now they are calling the country a narco-state, even though a little more than two years ago, Szijjártó was full of smiles in Caracas. It is telling that the otherwise hyperactive Szijjártó did not post anything about Venezuela until Monday evening – except to write about Hungarians affected by the situation – and said nothing about what will now become of the secret agreement signed between the two countries in 2023.

At his press conference on Monday, Viktor Orbán actually admitted that the Hungarian position is that they do not want to take a moral stance on the US intervention: in his view, international law no longer matters, what matters is what the great powers want to do. "It happened, it is what it is, and what we are concerned with is whether it is good or bad for Hungary. And it is good for Hungary." Apparently then, two and a half years ago, Maduro was good for Hungary, but now, it is his downfall that is deemed beneficial.

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Archived link

cross-posted from: https://scribe.disroot.org/post/6596962

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An investigation by the Institute of International and European Affairs urges the Irish government to speedily publish a National Security Strategy.

The report, co-produced by Deloitte Ireland, drew on interviews and discussions with public and private sector leaders that took place last September. In its interviews, business groups called on the Department of Justice to expedite high-level security clearances for staff applying for sensitive posts in critical infrastructure and services, because of “elevated” attempts by foreign intelligence agencies to infiltrate their businesses.

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Kieran O’Neill, a defence and security partner with Deloitte, said companies have real concerns over attempts by agencies in China and Russia to plant operatives.

“Ireland is a target,” he said. “Many organisations here are directly involved in countering Russian cyber threats in Ukraine, implementing sanctions on Russian officials, and involved in countering disinformation. “We don’t have the security architecture in place to expedite that security clearance process for people working in government and the private sector,” he added, saying more needed to be done to either “prevent that threat of espionage, or to detect it very quickly”.

The report tries to separate Ireland’s neutrality from the issue of protecting the country’s assets at a time when the security environment is at its most “challenging” and “dangerous” in recent history.

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“Of greatest concern is that the possibility of an armed attack on an EU member state — and its consequences for Ireland — are no longer outside the bounds of possibility,” the report warned.

Among the recommendations are that the Government should follow Sweden’s example and issue fact-based pamphlets to citizens on the risks in times of crisis.

Mr O’Neill said the Russian attack on Ukraine was the “pivot point” for European security, and events since then have elevated instability and tension.

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The report also urges the Government to develop a strategy to allow Ireland’s technology sector engage with the EU’s defence programme, which has allocated €150bn to boost investment in Europe’s defence industry.

“Ireland has a strong technology sector with dual-use potential, and with the increased focus on security and defence spending across Europe, there is a significant economic opportunity for Ireland that can also support efforts to lift our own security and resilience posture,” Mr O’Neill said.

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The threats have been acknowledged by Garda Commissioner Justin Kelly, who said last year that “hostile state actors” posed a threat to national security.

Irish exposure to security risks was highlighted last month by the five unidentified drones that appeared during the visit of Ukrainian president Volodymyr Zelensky. The drones hovered over an Irish naval vessel that was guarding the flight path of Zelensky’s plane, before disappearing. They were later tracked to an unidentified ship.

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However, years after a National Security Strategy was promised, it is still being finalised. Work on developing a new National Security Authority to oversee high-level security clearances has only just begun.

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[Chairman of the Oireachtas Foreign Affairs Committee John] Lahart said he supports Irish neutrality, but believes “neutrality is nothing if you cannot protect it and ensure it continues”. He said Ireland needed to cooperate with others in order to protect Irish assets.

“That is not about joining Nato. But it is about ensuring that whatever we do on the security front is inter-operative at a very basic level,” he said.

The changing global climate has driven much of the debate about Ireland’s neutrality, with one issue being the Government’s plans to change the “triple lock”, which means the large-scale deployment of Irish troops abroad can only happen with Irish Government, Dáil and UN Security Council approval.

The Government wants to change the triple lock, arguing it gives Russia and China a veto over Irish peacekeeping missions.

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Meanwhile, former taoiseach Bertie Ahern believes Ireland needs to work with other countries to protect Irish undersea assets amid the growing geopolitical turbulence.

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Mr Ahern said he was doubtful that Trump would stage a military takeover of Greenland, as to do so would “wreck Nato” ... “I don’t think he’d try and take it over by military force,” said Mr Ahern. “I really don’t. If he did try to do that, it would wreck Nato and destroy confidence between the European Union and America.

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“If I was on the other side of the negotiation table, I would say to Trump: ‘Well, what are you looking for here? Are you looking for rare earths? Are you looking for oil? Are you looking for US security?’ And if it’s US security that he really wants, then let’s talk about putting back some military bases there.

“But if he wants it for rare minerals, then I think we’re all into a very difficult position, because if he were to pursue that, I cannot see how you could get an agreement. I can’t see Denmark or Europe agreeing to that position.

“If he really wants it, what he should be doing is compromising with Denmark and Greenland and with Europe to put back in his military bases.

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Archive link

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An investigation by the Institute of International and European Affairs urges the Irish government to speedily publish a National Security Strategy.

The report, co-produced by Deloitte Ireland, drew on interviews and discussions with public and private sector leaders that took place last September. In its interviews, business groups called on the Department of Justice to expedite high-level security clearances for staff applying for sensitive posts in critical infrastructure and services, because of “elevated” attempts by foreign intelligence agencies to infiltrate their businesses.

...

Kieran O’Neill, a defence and security partner with Deloitte, said companies have real concerns over attempts by agencies in China and Russia to plant operatives.

“Ireland is a target,” he said. “Many organisations here are directly involved in countering Russian cyber threats in Ukraine, implementing sanctions on Russian officials, and involved in countering disinformation. “We don’t have the security architecture in place to expedite that security clearance process for people working in government and the private sector,” he added, saying more needed to be done to either “prevent that threat of espionage, or to detect it very quickly”.

The report tries to separate Ireland’s neutrality from the issue of protecting the country’s assets at a time when the security environment is at its most “challenging” and “dangerous” in recent history.

...

“Of greatest concern is that the possibility of an armed attack on an EU member state — and its consequences for Ireland — are no longer outside the bounds of possibility,” the report warned.

Among the recommendations are that the Government should follow Sweden’s example and issue fact-based pamphlets to citizens on the risks in times of crisis.

Mr O’Neill said the Russian attack on Ukraine was the “pivot point” for European security, and events since then have elevated instability and tension.

...

The report also urges the Government to develop a strategy to allow Ireland’s technology sector engage with the EU’s defence programme, which has allocated €150bn to boost investment in Europe’s defence industry.

“Ireland has a strong technology sector with dual-use potential, and with the increased focus on security and defence spending across Europe, there is a significant economic opportunity for Ireland that can also support efforts to lift our own security and resilience posture,” Mr O’Neill said.

...

The threats have been acknowledged by Garda Commissioner Justin Kelly, who said last year that “hostile state actors” posed a threat to national security.

Irish exposure to security risks was highlighted last month by the five unidentified drones that appeared during the visit of Ukrainian president Volodymyr Zelensky. The drones hovered over an Irish naval vessel that was guarding the flight path of Zelensky’s plane, before disappearing. They were later tracked to an unidentified ship.

...

However, years after a National Security Strategy was promised, it is still being finalised. Work on developing a new National Security Authority to oversee high-level security clearances has only just begun.

...

[Chairman of the Oireachtas Foreign Affairs Committee John] Lahart said he supports Irish neutrality, but believes “neutrality is nothing if you cannot protect it and ensure it continues”. He said Ireland needed to cooperate with others in order to protect Irish assets.

“That is not about joining Nato. But it is about ensuring that whatever we do on the security front is inter-operative at a very basic level,” he said.

The changing global climate has driven much of the debate about Ireland’s neutrality, with one issue being the Government’s plans to change the “triple lock”, which means the large-scale deployment of Irish troops abroad can only happen with Irish Government, Dáil and UN Security Council approval.

The Government wants to change the triple lock, arguing it gives Russia and China a veto over Irish peacekeeping missions.

...

Meanwhile, former taoiseach Bertie Ahern believes Ireland needs to work with other countries to protect Irish undersea assets amid the growing geopolitical turbulence.

...

Mr Ahern said he was doubtful that Trump would stage a military takeover of Greenland, as to do so would “wreck Nato” ... “I don’t think he’d try and take it over by military force,” said Mr Ahern. “I really don’t. If he did try to do that, it would wreck Nato and destroy confidence between the European Union and America.

...

“If I was on the other side of the negotiation table, I would say to Trump: ‘Well, what are you looking for here? Are you looking for rare earths? Are you looking for oil? Are you looking for US security?’ And if it’s US security that he really wants, then let’s talk about putting back some military bases there.

“But if he wants it for rare minerals, then I think we’re all into a very difficult position, because if he were to pursue that, I cannot see how you could get an agreement. I can’t see Denmark or Europe agreeing to that position.

“If he really wants it, what he should be doing is compromising with Denmark and Greenland and with Europe to put back in his military bases.

...

Archive link

Late last year, most major U.S. telecoms were the victim of a massive, historic intrusion by Chinese hackers who managed to hack into U.S. communications networks and then spy on public U.S. officials for more than a year completely undetected. The “Salt Typhoon” hack was so severe, the intruders spent another year rooting around the ISP networks even after discovery. AT&T and Verizon, two of the compromised companies, initially didn’t think it was worth informing subscribers this happened.

Like most hacks, the scale of the intrusion was significantly worse than originally stated. And it keeps expanding. This week, lawmakers finally revealed that they only recently realized that the same Chinese hackers accessed email systems used by some staffers on the House China committee in addition to aides on the foreign affairs committee, intelligence committee, and armed services committee: “The attacks are the latest element of an ongoing cyber campaign against US communication networks by the Ministry of State Security, China’s intelligence service. One person familiar with the attack said it was unclear if the MSS had accessed lawmakers’ emails.”

Which means that they almost definitely had access to confidential lawmakers’ emails, something it will take our Keystone-Cops-esque government another six months to admit.

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It can’t be overstated what a complete and massive hack this was. The Chinese government had broad, historic access to the sensitive phone and email conversations of a massive number of sensitive U.S. public and government figures, for years. Thanks, in large part, to big telecoms like AT&T leaving key network access points “secured” with default administrative usernames and passwords.

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Last June, NextGov reported that lawyers at big telecoms had started advising their engineers to stop looking for signs of Salt Typhoon intrusion because they were worried about bad press and liability. Due to this coverup and a lack of transparency by the dying U.S. government, it’s likely we still don’t know the full scope of the intrusions.

Meanwhile, the Trump administration has responded by gutting government cybersecurity programs (including a board investigating the Salt Typhoon hack), dismantling the Cyber Safety Review Board (CSRB) (responsible for investigating significant cybersecurity incidents), and firing oodles of folks doing essential work at the Cybersecurity and Infrastructure Security Agency (CISA).

Trump’s courts have made it impossible to hold telecoms accountable for privacy violations. His earlobe nibbler at the FCC, Brendan Carr, constantly undermines efforts to improve security in Chinese-made smart home devices, and is dismantling what little telecom oversight we had. Their big “win” on “national security” was transferring TikTok ownership to Trump’s unethical billionaire friends.

The Chinese hacked into most of our sensitive systems and spied on powerful people, across the entirety of U.S. governance, for years. The companies involved covered it up and the Trump administrations’ “fix” was to destroy our cybersecurity protections and corporate oversight.

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Archive link

• Orban faces toughest challenge of his 15-year rule
• Economy mired in three-year period of stagnation
• Cost of living, economy, health dominate election concerns
• Veteran leader racing against time to turn economy around before the election in April 2025

Hungary's [prime minister] Viktor Orban may have got a brief poll boost last month from a costly pensions sweetener but he faces a race against time before April's election to turn the stagnating economy around enough to extend a 15-year grip on power.

Orban's reelection bid will be watched far beyond Hungary. A thorn in the side of the European Union, the nationalist leader counts U.S. President Donald Trump as an anti-EU ally and maintains close ties with Russia's Vladimir Putin.

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While the inflation surge has lifted Hungarian food prices close to EU average levels, the annual average full-time salary per employee was third-lowest in the bloc and pension spending is also among the lowest as a share of output.

The pension top-up, aimed at Hungary's 2.4 million retirees who make up over a quarter of the electorate, will cost $454 million next year, with its price tag rising each following year as it is phased in over the next government cycle.

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The pension moves will have a far larger cost in the long run. In August the IMF warned that, without reforms to its pension system, Hungary was set for "explosive growth" in borrowing beyond 2030, with its public debt estimated at a staggering 255% of output by 2054.

Some public comments to Orban's Facebook post announcing the pension top-up were critical of the move, calling instead for hikes to smaller pensions or indexation to wages, while others derided it as a "joke" or "vote buying".

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"The problem is that (sentiment) is still negative and it cannot be changed dramatically in a few months. The time is too short and the amount of money to be distributed is limited," 21 Research Centre Director Daniel Rona said.

cross-posted from: https://scribe.disroot.org/post/6255687

Several thousand activists from across Serbia joined student protests in the country's southwest on Sunday, rallying against what they describe as government pressure on state universities.

The demonstration, part of a wider movement confronting political interference in higher education, was the first of its kind in Novi Pazar, a town with a majority Bosniak Muslim population.

It is among many protests organised after the collapse of a railway station roof last year in the northern city of Novi Sad, which killed 16 people ... [The station’s modernization was a symbol of Serbia’s growing cooperation with China. Completed in the summer of 2024, the $1.5 billion project – funded through a loan agreement between the Serbian government, China’s Exim Bank, and the Russian government under the China-CEEC cooperation framework – but had come to symbolize systemic issues of corruption, secrecy, and a lack of accountability.]

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Throughout the day-long protest, participants observed a moment of silence for the victims of the roof collapse. They waved flags representing their towns and universities, whistled, and chanted their signature slogan: “Pump up!”

The protest movement - led by students, academics, and opposition figures - accuses Serbian President Aleksandar Vucic and his populist nationalist party of fostering corruption, poor public services, nepotism, and restrictions on media freedom. Vucic and his party deny the allegations.

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Several thousand activists from across Serbia joined student protests in the country's southwest on Sunday, rallying against what they describe as government pressure on state universities.

The demonstration, part of a wider movement confronting political interference in higher education, was the first of its kind in Novi Pazar, a town with a majority Bosniak Muslim population.

It is among many protests organised after the collapse of a railway station roof last year in the northern city of Novi Sad, which killed 16 people ... [The station’s modernization was a symbol of Serbia’s growing cooperation with China. Completed in the summer of 2024, the $1.5 billion project – funded through a loan agreement between the Serbian government, China’s Exim Bank, and the Russian government under the China-CEEC cooperation framework – but had come to symbolize systemic issues of corruption, secrecy, and a lack of accountability.]

...

Throughout the day-long protest, participants observed a moment of silence for the victims of the roof collapse. They waved flags representing their towns and universities, whistled, and chanted their signature slogan: “Pump up!”

The protest movement - led by students, academics, and opposition figures - accuses Serbian President Aleksandar Vucic and his populist nationalist party of fostering corruption, poor public services, nepotism, and restrictions on media freedom. Vucic and his party deny the allegations.

...

cross-posted from: https://scribe.disroot.org/post/6255345

Spanish Prime Minister Pedro Sanchez's scandal-hit Socialists endured a crushing defeat in a regional election in Extremadura on Sunday, which saw far-right Vox make big gains.

The Socialists, who lead the minority national coalition, have been rocked by corruption and sexual misconduct allegations and the vote in the rural southwestern region was seen as an indicator of the party's wider prospects.

They won just 18 seats in the 65-seat assembly down from 28, their worst-ever regional result in Extremadura.

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It was the first regional election since a court ordered Jose Luis Abalos, a former top aide to Sanchez, to stand trial over claims he took kickbacks related to the awarding of public contracts.

The prime minister's wife, Begona Gomez, and younger brother, David are also facing graft allegations.

David Sanchez is set to go on trial for influence peddling in May along with 10 other defendants including the Socialist candidate to head Extremadura's government, Miguel Angel Gallardo -- who called Sunday's election results "really bad".

The Socialists have also come under fire in recent weeks for allegedly failing to address sexual harassment by senior male officials.

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Sunday's vote will be followed by regional elections in Andalusia, Aragon, and Castile and Leon during the first half of 2026.

Spanish Prime Minister Pedro Sanchez's scandal-hit Socialists endured a crushing defeat in a regional election in Extremadura on Sunday, which saw far-right Vox make big gains.

The Socialists, who lead the minority national coalition, have been rocked by corruption and sexual misconduct allegations and the vote in the rural southwestern region was seen as an indicator of the party's wider prospects.

They won just 18 seats in the 65-seat assembly down from 28, their worst-ever regional result in Extremadura.

...

It was the first regional election since a court ordered Jose Luis Abalos, a former top aide to Sanchez, to stand trial over claims he took kickbacks related to the awarding of public contracts.

The prime minister's wife, Begona Gomez, and younger brother, David are also facing graft allegations.

David Sanchez is set to go on trial for influence peddling in May along with 10 other defendants including the Socialist candidate to head Extremadura's government, Miguel Angel Gallardo -- who called Sunday's election results "really bad".

The Socialists have also come under fire in recent weeks for allegedly failing to address sexual harassment by senior male officials.

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Sunday's vote will be followed by regional elections in Andalusia, Aragon, and Castile and Leon during the first half of 2026.

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Arguably the biggest misconception of all [about Spain]... is that Spain’s economy, the EU’s fourth-largest, is “booming”. According to numerous key metrics, including productivity growth, unemployment, and (most tellingly) surveys of the country’s actual citizens, it isn’t.

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Compared to other EU countries, it is true that Spain’s GDP growth has been extraordinario in recent years. CaixaBank, the country’s largest domestic lender, reported earlier this week that Spain’s output has risen 10% since 2019, well above the eurozone average of 6.4% and a whopping one hundred times more than Germany’s anaemic 0.1% expansion.

The swift growth also shows little sign of subsiding. Earlier this month, the European Commission and the Bank of Spain both hiked their Spanish growth forecasts for this year to 2.9% – more than double the EU’s 1.4% average projected expansion. “Real GDP growth is expected to remain strong in 2025,” the Commission noted, adding that “economic activity” is also expected to “remain robust” until 2027.

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But as José Boscá, an economist at the FEDEA think tank in Madrid, points out, Spain’s GDP data “is not so promising” when adjusted for its population growth, which has also swelled in recent years. “If we only assess economic growth based on GDP data, there are factors that we are not taking into consideration,” Boscá said.

Indeed, Spain’s GDP growth is largely a direct consequence of its growing population. Soaring immigration – especially from Latin America – has caused Spain’s overall population to surge in recent years, and, predictably, has also caused its total output and consumption to rise.

According to the Elcano Royal Institute, the country’s immigrant population has risen by roughly 600,000 people per year since the end of the pandemic, pushing its population to a record high of just under 50 million. Roughly one in five people now living in Spain were born abroad.

In addition to boosting net output, the influx of workers has boosted government revenue and, by tempering wage rises, has helped keep inflation barely a fraction above the European Central Bank’s 2% target rate.

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But it has also exacerbated Spain’s chronic shortage of affordable housing and compounded the country’s cost-of-living crisis – especially for young people, the vast majority of whom still live with their parents and a quarter of whom are currently unemployed. According to the latest available data from Eurostat, the average Spaniard only leaves home at the age of 30: well above the bloc’s average of 26.

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Profound structural obstacles remain. These include high government debt-to-GDP levels inherited from the eurozone crisis and pandemic; widespread unemployment; and political instability partly engendered by Prime Minister Pedro Sánchez’s minority government, which has been mired in corruption scandals involving his inner circle. Due to the political dysfunction, Spain hasn’t managed to pass a new budget since 2022, forcing the government to rollover the 2023 budget, even as its booming population and robust tax revenues have created a new reality in the country.

That said, not even a new budget would address Spain’s biggest problem: low productivity. Boscá noted that this is largely a result of the composition of Spain’s industrial sector, where 99.8% of firms are small and medium-sized enterprises consisting of fewer than 10 employees. This industrial landscape inevitably curtails productivity growth and domestic investment.

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Spain, in short, is growing – just not in the way many headlines suggest. Strip out the population surge and the picture looks far less miraculous. And unless productivity finally stirs, the boom will remain more statistical than real. For a country long burdened by clichés, it may turn out that the greatest misconception of all wasn’t about siestas or sangria, but about the strength of its comeback.

Archived link