FT: Cost of living in Spain shakes Pedro Sanchez’s popularity

High unemployment rates and the cost of living make up an explosive mix that gives the People’s Party the lead, the Financial Times notes in its report.

“Sanchez is facing the most difficult year since he took office four years ago,” says Luciá Méndez, one of the founders of El Mundo. Polls give the conservative opposition a nearly 9-point lead. “It’s the first time polls show him losing ground, at a time when the economy is getting worse.”

The state of the economy will determine the outcome of the election. However, Sanchez will delay holding elections until December 2023 – as long as he can – in the hope that the economy will recover in the meantime.

And while the unemployment rate fell to a 14-year low in the second quarter of the year, a small increase recorded in July caused much concern. As Pablo Simón, professor of political science at Carlos III University in Madrid, explains, “No economic issue is more important in Spain than unemployment. If it starts to rise again, it will be a major issue in terms of elections.”

In Spain, the unemployment rate continues to be one of the highest in the European Union, reaching 12.6% in July 2022 while, for example, in Greece the rate is at 11.4% in the same month (down from 12.3% in June).

Last week the Spanish parliament instituted measures to save energy in the country. Among other things, limits are provided for the temperature of the air conditioners.

Sanchez sought to regain momentum with a $9 billion package that includes pension increases, tax cuts and benefits to support households struggling to cope with rising energy costs and inflation that has reached 10 .8% in July (the highest rate in the last 38 years). At the same time, he imposed high taxes on banks and energy companies.