Spain's response to EC and OECD economic policy recommendations (Burguete, V.)

Source: IESE PPSRC
Type of item: Policy paper
Date: 24/11/2014

SPANISH REFORM POLICY BRIEF 1

Spain's response to EC and OECD economic policy recommendations

Víctor Burguete, PPSRC-IESE
November, 2014

This analysis overviews the relative progress of Spain in enforcing the economic policy recommendations issued by the European Commission (EC) and the OECD. To start with, the overall reformist progress of the Spanish Government is put in international perspective. Subsequently, the analysis compares progress in Spain across different policy dimensions. Finally, it describes how the OECD and EC reform priorities have changed over time since 2012. This work is part of the SpanishReforms project, whose objective is to regularly monitor the progress of Spain in making economic policy reforms. Accordingly, the overview is made following the classification of economic policy in six broad areas and 18 subareas.

1. INTERNATIONAL INSTITUTIONS RANK SPAIN AS A TOP OVERALL REFORMER

Table 1. Progress on economic reforms with respect to recommendations issued between 2011

2. SPAIN'S PROGRESS DIFFERS SIGNIFICANTLY ACROSS POLICY AREAS

Figure 2. European Commission and OECD assessment in 2014 of Spain's implementation of international recommendations

The SpanishReform project classifies economic policy in 6 broad areas and 18 subareas (see Annex 2 for details). This original classification allows the easy follow-up of international recommendations, evaluating government progress in different economic policy areas and highlighting those which are not delivering. Figure 2 shows the progress of Spain with respect to the recommendations issued in the OECD (2012) and in the Council of the European Union (2013).

3. EUROPEAN COMMISSION AND OECD REFORM PRIORITIES EVOLVE OVER TIME

Figure 4. Number of recommendations issued to Spain in the main reports of the OECD and the European Commission

4. CONCLUSIONS

International pressure, the Memorandum of Understanding (MoU) and the Excessive Deficit Procedure (EDP) forced Spain to commit to adopt economic policy reforms, mainly in the financial and the fiscal front. The OECD's and European Commission's assessments show that the reformism of the Spanish Authorities is noteworthy mainly when compared to its European peers. However, several reforms such as those on the active labour market and professional services are lagging behind, whereas other economic areas, where action has already been taken, are far from delivering appropriate results. More efforts are needed to fully follow international economic guidance.