ON THE face of things, eight months without a proper government have not hurt Spain. Between April and June, the economy’s quarterly growth was 0.7%, only marginally less than in the first quarter, and it added 271,400 jobs. Unemployment is down to 20% from a peak of 27% in 2013. That is partly because of the prospect of a booming tourist season, with many visitors flocking there after being scared away from the beaches of Egypt, Tunisia and Turkey. It is a tribute to the maturity of Spain’s institutions that the country has gone about its normal business—which, at this time of year, means going on holiday.
But Spain’s political deadlock, in which a stable two-party system gave way in an election last December to a fragmented parliament, comes with a rising cost. Business confidence is starting to flag, as is the pace of job creation. With the euro zone buffeted by Brexit, Spain’s economy is forecast to slow this winter. To boost productivity and cut long-term unemployment, it needs more reform. There are decisions to be taken, on everything from the budget to Catalan separatism—and it needs a government to take them.
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