The gatopardismo strategy

Changing everything so that nothing changes is known as "gatopardismo" in reference to the novel El Gatopardo (The Leopard in English) by Italian writer Lampedusa. Spain runs the risk of becoming the victim of a kind of gatopardista political strategy if Prime Minister Mariano Rajoy doesn't make the most of the crisis to implement all the reforms that are necessary to modernize Spain's economy.

This is what really could turn around Spain's dire situation and boost growth in the country. Of course, cutbacks are necessary and the near term will determine some commitments that under no circumstance should it not be able to meet. But these agreements alone won't be enough. If the government simply follows through with balancing public accounts, the imbalances will return in time and so will unemployment. People must understand that Spain's models for production, politics and government are antiquated, which impedes progress toward stable and strong growth.

In the past several days the risk premium has dropped, reducing Spanish debt payments by 4 billion euros. This provides a certain calm, but it's not enough because these payments still surpass what Spain has budgeted. A bailout could bring even more restrictoins.

No matter what, Rajoy has a lot of work to do before year end. Time is running short to complete reforms of the fiancial sector, government and power sector reforms. The latter is experiencing delays due to political pressure from oponents. 14.5 billion in government worker cutbacks will help the budget, but not to modernize government. The current proposed changes are increasing frustrations and shortening the path to failure.