[Heritage Foundation] The Spanish economy is under serious threat. The Sánchez Administration is using the excuse of a serious health crisis to enact policies that undermine investor and business security and restrict personal and economic freedom. Such interventionism will trap the economy by increasing fiscal imbalances—Spain’s historical mistake—and put the country on a destructive track that will erode freedom and result in excessive spending, more debt, and rigidity. The long-term social and economic consequences of these mistakes can be enormous. Instead, the government should implement serious measures to enhance economic freedom and allow a strong recovery soon.Spain’s economic 2020 freedom improved slightly, but many policies implemented by the current government threaten to derail or even reverse that modest progress.
The government’s priority is to defeat the pandemic and get the nation back to work. However, it should avoid unnecessary interventions in the economy to do so.
Spain should reduce non-essential government spending to zero, consider pandemic-related tax relief, and resist increasing structural spending imbalances.
Spain’s economic freedom, as measured by The Heritage Foundation’s annual Index of Economic Freedom, improved slightly in 2020. Many policies implemented by the current PSOE/Podemos government of Prime Minister Pedro Sánchez, however, threaten to derail or even reverse that modest progress towards greater economic freedom.
Of special concern are the many anti-free-market and anti-capitalist measures the government has put in place in response to COVID-19. Recommendations in this paper, if adopted, would help the Spanish people—at the very least—to avoid losing more economic freedom....