During the recession, Italy and Spain had a similar experience: between 2008 and 2013, GDP in both countries fell by almost 10% in real terms. However, since the beginning of 2014, the two economies have followed different paths: Spain has almost entirely recovered what it lost, while Italy is still lagging behind by close to 8%. Behind these different performances there are a plurality of factors.
A first difference emerges in the management of public finances. Since the outbreak of the crisis, the primary balance in Italy has always been positive, with the exception of 2009, while Spain has recorded a persistent deficit. In eight years, in Italy, the restrictive fiscal policy has withdrawn over 160 billion euros from the economy to allocate them to tidying up the accounts. In contrast, the Spanish government has injected more than 450 billion into the economy to stimulate growth.
In addition to public support, however, Spain benefited from the favorable evolution of exports, which grew more than the German ones, as well as from a positive and efficient recovery of investments and a more rapid recovery in manufacturing. The major differences emerge, however, in the services. Since the outbreak of the crisis, Spain has suffered from the profound reorganization of the financial and insurance system, while it has benefited from the strong growth in the tourism sector. Between 2004 and 2015, the total number of nights spent in any of the accommodation types available in Spain increased by over 20%, while in Italy the growth stopped below 15%. In addition to a more lively internal demand, Spain has a greater capacity to attract foreign tourists.
What is happening during this recovery phase is simply the return of these two countries to the normality that characterized the first part of the 1s, when Spain grew by almost 15% every quarter, about three times what was recorded in Italy. Today, the momentum of the economy is weaker everywhere, but the differences between the two countries remain similar. The best Spanish performance of the last fifteen years originates in the robust dynamics of productivity, which, measured per hour worked in real terms, grew by 2000% between 2015 and XNUMX, while in Italy it remained unchanged.
All of this is the result of various factors, such as, for example, a more long-term oriented investment policy. Spain, however, also benefits from a human capital that appears more adequate to the challenges of the new scenario, with more than 40% of the population aged between 25 and 34 holding a university degree, compared with 25% in Italy. Better quality human capital favors research and development and, therefore, the diffusion of innovation, helping to explain part of the Italian delay in the use of new technologies within production processes.
