Jose Maria Aznar demands elections to recover credibility and restore financial credibility

Ex Premier of Spain, Jose Maria Aznar, who was defeated by the Socialist Zapatero in 2004 after a flubbed attempt to blame Al Qaida terrorist attacks on ETA, the Basque terrorist organization, has an op-ed in the WSJ.  Aznar, who is a pro-market conservative, tends to blame the crisis on pro-Socialist policies of his predecessor. 

Although, I would tend to agree on policy more with Aznar than I would with Zapatero, I must point out that financial crisis affect both Socialist and free-market economies alike.  Ireland, arguably the most free-market low tax and regulation economy in Europe has come to the EU and IMF for a bailout. 

I would argue that free-market economies are not best at avoiding financial crisis, but they are best at recovering from them. 

Aznar Via WSJ:

The roots of Spain's crisis lie in the political decisions made in 2004 to abandon the modernizing process that Spanish society began more than 30 years ago. At that time, Spaniards decided by consensus to consolidate our democracy and its institutions after nearly 40 years of dictatorship. The next step was to enter the European Union and later the euro, and converge economically and socially with the most thriving nations of Europe.

Then in 2004 Madrid changed direction. The government rejected the settlement embodied in the 1978 constitution and ruptured the makeup of the Spanish state. Different areas of the country were pitted against each other. The effect has been to erase much of what joins us as Spaniards and to turn Spain into a country that is very difficult to lead.

In the economic sphere, once Spain adopted the euro and currency devaluation ceased to be an option, the government abandoned its commitment to budget stability and the constant process of reforms necessary to remain competitive in global markets. These economic errors can be seen in the government's arbitrary interventions in business life, with flagrant contempt for the rules of the game—even the European rules. We also saw unprecedented growth of government spending and in tax hikes across the board.

Spain's current place in the international sphere reflects its declining weight in the world. The government has relinquished its responsibilities and has failed to defend its national interests abroad.

Only a new government can recover credibility, and that demands general elections.

A new government could call on the Spanish people to undertake a great national project for recovery, regeneration and reform of the nation. For this there are no miracles or shortcuts—there never were in the past and there won't be now. With a new national political project and the implementation of the appropriate policies, Spain can recover international confidence and credibility and Spanish people can recover confidence in themselves and in their nation.

An essential part of this political change will be for Spain to immediately acknowledge that the state has to limit its economic and social role, and open new areas of freedom and dynamism for society and private entrepreneurship. Spain needs to accomplish deep reforms in its administrative structure, including eradicating bureaucratic and public bodies and rationalizing public expenditure. Spain cannot delay any longer in reforming its welfare state, but must start now to restore the conditions for a thriving society that is open to all.

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