The politics of Troika avoidance: The case of Spain
Although Spain was able to escape the strict monitoring of the Troika (the combined forces of the International Monetary Fund (IMF), the European Commission and the ECB), unlike Greece, Ireland, Portugal and Cyprus, Prime Minister Mariano Rajoy and his government had to pledge to introduce major reforms in the Spanish economic system in order to increase competitivity in the long run. As a trade-oﬀ, in June 2012, the Spanish government received conﬁrmation of a loan of up to €100 billion from the European Stability Mechanism (ESM) to resolve the country’s ailing post-crisis banking sector. Spain is therefore an interesting case study: as one of the larger member states in the European Union (thus entailing much stronger negative systemic repercussions on the EMU should it fail), it was able to prevent the intervention of the Troika in its domestic endeavours. This chapter will focus on the relations between Spain and the European
Union during the period of economic crisis that started in 2008 and is still ongoing. In order to explain the emergence of the economic crisis in Spain, the following section will describe the development and main features of the Spanish economy. A discussion of the most important aspects of the economic crisis is then presented. This is followed by two separate sections on how the crisis was managed by the Zapatero and Rajoy governments. Finally, the political and social impacts of the crisis are analysed, and some conclusions are drawn.