• Forecasts: The OECD places Spain at the head of the world economic collapse in 2020 with a fall of 14.4% after the virus

José Ángel Gurría (Tampico, Mexico, 1950) has been Secretary General of the Organization for Economic Co-operation and Development (OECD) since 2006. On August 1, he will announce if he resigns to apply for a new re-election at the head of this organization to the belonging to the most industrialized countries.

You are a veteran of the world economy, have you seen something similar to what we are experiencing? In the OECD we have been around for 60 years and we had never anticipated a 6% drop in the world economy like the one we project for this year, and that in the best case scenario, because if there is a re-emergence, the drop could reach 8%. In OECD history, we have seen such falls in individual countries, but not such a dire situation worldwide. France is paying unemployment to half the population and similar circumstances are seen in Germany, Spain or the United Kingdom. Benefits are being paid to millions of people, but there will come a time when we will have to stop doing it and we will have to see how to help the most disadvantaged. It is very worrying. But there will be a recovery in 2021 ... Yes, but even if there is a rebound, by the end of 2021 it will not have reached the 2019 levels. The 2020 coup will be very negative. We are not going to have a recovery in a joke, it will be U-shaped and it remains to be seen how long the line below the U will be. It will depend on the policies that are made. When we take off again we are going to need a longer runway, stronger engines and even so, when we start to move our wings we will notice that they are heavier, because governments, companies and families are going to have more debt, because they are doing the right thing, employing everything you can to win the war against the virus and its consequences. But you have said that the Great Depression will not be reached ... It cannot be compared. The Great Depression was very local with an American origin and it moved slowly, it took years to get from one place to another. This crisis surpasses any imagination with a health crisis with hundreds of thousands of deaths and serious economic consequences. Fortunately, in Spain and other European countries the situation improves, but not in Latin America or Africa, where they have neither the infrastructure nor the financial capacity to react that the OECD countries do. You have to be alert. At the OECD we have produced 115 documents on Covid and we evaluate the measures that are being taken, the capacities ... We are turning to trying to contribute that on our website and that the best practices of others can be seen. hard scenario of regrowth ... The truth is that we do not know what will happen. In the US, for example, we do not know if what is happening is a regrowth, that they never controlled the virus, or if it is a mutation ... What we do know is that the countries that were stricter in confinement, such as Spain, do better. The economic blow is being very strong but thousands of lives are being saved, but the OECD places the Spanish economy as the one that will fall the most in the world this year, why? Because this crisis is a perfect storm against a country like Spain. It has a productive structure for SMEs in which tourism is very important, above what it represents in Germany or in other countries. The success story of Spain, which is the envy of the entire world for receiving so many millions of tourists, turns out to be where the virus hits hard. In addition, Spain is an open country that depends on exports and trade stopped. It also depends on foreign investment and it also stopped. The fall figures are also similar in Italy or France. What should the Spanish economy do? The first problem is that it rains on a wet basis internationally and there are decisions above what the Spanish Government can do. Things were not going well before Covid. We had a problem of trade tensions that caused uncertainty in investment. It wasn't just between China and the US, but also threats of a trade war over digital taxes. Let's not aggravate things. I know that trade policy belongs to the European Commission, but Spain has a voice there. Then it is necessary to rescue the summer. It must be rescued with balance, reviving tourism, but without causing a second wave of the virus. In addition, the most vulnerable must be cared for. The elderly, women, young people always suffer more, and the least prepared, those with less qualifications. These are more threatened by today's situation. They are the ones who have to go out and cannot telework. You have to recycle them, but you cannot turn all the workers into computer experts. And the first thing, the vaccine ... It is the basic problem, the first thing is to kill the virus. But we know that there is no vaccine and we have to spend between a year and 18 months learning to live with the virus. The day they discover it, it will take another six months for it to reach everyone. It is a disease that affects every country in the world. From there there are a lot of decisions that are not properly Spanish but there are others that you can make, such as the investment plan in renewable or digital energy. You have to rebuild and rebuild better. You have been asking for reforms for years to make the Spanish economy more competitive, but they have not come ... Reforming is a state of mind, it never ends. There is always something that can be improved. Even when you have already reformed a sector if the circumstances change, you have to act again. No one knew he was going to hit us with this magnitude, with this force. But you have to do the reforms. The unemployed must be cared for, but also the companies. Which will survive? SMEs have one or two months of liquidity, but three months they cannot. They need the government guarantee and it must be assumed that these guarantees can end in a public deficit. The Spanish government wants to repeal the labor reform, does the OECD still believe that it was positive for employment? I have followed the Spanish debates. Before Covid, half a million jobs were being generated a year in Spain and that is not only the result of the labor reform, but it was a sign that generated confidence. Now is the time in Spain to speak with CEOE and employers' associations and at the same time with unions before any measure. The problem is that in these crises the positions become very polarized and everything turns black and white. Not so, gray is the color. The less dialogue there is, the blacker everything is going to get. Solutions that take everyone into account may be imperfect, but they are the ones that can be approved. If not, we are going to have a permanent debate in Las Cortes and we are not going to be able to make substantive decisions or face the problem that is coming with more force than until now. But the Government is parliamentaryly weak to make reforms ... Welcome to the club, is what is happening everywhere. It is almost the rule in all countries. This is not the time to see who represents more to the left or to the right, we are in a war. And in a war the parties agree and the national interest is made. We see political debates, as if nothing happened, we are in a terrible black hole and just beginning. We are going to have very bad numbers, with false starts, with partial confinements again. I insist that it will be 12 or 18 months before there is a vaccine available to everyone. If they charge $ 2,000, how many people can afford a treatment? We are talking about extraordinary problems. Generosity and high-mindedness are required. Would it be time to abandon dogmas and electoral programs and try unprecedented consensus? Exactly. We have never had anything like this. For example, the minimum vital income was discussed as a theory and now it is probably the waterline of hundreds of thousands of people. This means that it is time for the conservative parties to accept the minimum income and the left, labor reform and flexibility In the labor market? Exactly, more eclectic and high-minded solutions are needed in Spain and everywhere. The Spanish do not have a monopoly on fragmentation or leaders who try to bring the water to their mill. When people are dying every day you have to agree. Is it time to spend now for the State, but reduce the deficit after the virus? It seems like a contradiction, but to win the pandemic you have to put everything it is possible of deficit and what the central banks can do, but these cannot be the only heroes. Right now, the choice between economics and health is a false dilemma. We must win the battle against the virus to, among other things, mitigate the economic cost of unemployment and bankruptcy of companies. It is important not to make the same mistake of the 2008 crisis when we started tightening our belts too soon and the recovery was delayed and also employment. This is not to rescue Lehman, it is that while the virus is still there, everything necessary must be done. Activity is gradually recovering, but there is always another regrowth and it must be tamed to avoid the second wave at all costs. A regrowth would delay economic recovery. That is, when there is a vaccine, start tightening the belt ... And before tightening it, generate growth. If GDP grows faster than debt, you are doing well. Now it is the other way around, debt rises and GDP falls, which is the worst of all worlds. Debt will exceed 100% on average in the OECD and will be an inheritance for years. In all cases there will invariably be increases in indebtedness, but interest rates will remain low for a long time. That will make the situation manageable in the short term and then yes, it will be necessary to be careful with public finances, but the fundamental thing is a return to growth. The Spanish Government has announced that it will raise taxes to improve the deficit, but businessmen warn that that would harm growth ... That is a dilemma for tomorrow, but one that we must start talking about today. And it is a classic. I have been finance minister and whenever the government requires more resources, the private sector says that it is best to stimulate economic activity. I think that before raising taxes, it will be necessary to see how each country looks after the virus and it is also true that several companies are going to be in the ICU and for some time they are not going to be an important source of taxes. If the recovery is weak, more work will be needed on the income side. What now seems like a contradiction is going to be more in three months, but it will have to be addressed and resolved. That is, first generate growth to improve collection and only if it does not work, think about raising taxes? Yes, but the issue is that when the private sector is touched by the crisis, the burden falls on the public sector in a scenario of less income and more spending, so there will have to be a period of flexibility in fiscal requirements, which is the first thing the Commission did European. Now is not the time for deficit parameters. And in the so-called Google Rate, should we wait for the US? The US is still on the table, it never left. He proposed a pause and has been part of the job for the past two and a half years. The question in the digital tax is whether it applies only to digital companies or to what we call public-facing businesses that are practicing a digitized economy. As proposed by Spain, you can go first with what is digital and in the second stage, the rest. The US wants to slow down, but if we interrupt now everything is delayed and we must continue working. What if there is no agreement on the digital tax? The terrible alternative is that there are 30 countries that are on their own and that is going to be a disaster . The trade wars so far are a joke compared to what is coming, because there are 30 to be launched, among them fifteen Europeans who feel the moral and equity imperative to collect taxes from these technology companies. The agreement will be the most convenient for them, because if not, they will want to get many more resources from countries that will be in great need. It is better stability and certainty. Will you stand for reelection in the OECD? That has its times. On August 1st I have to tell the members if I show up or not. There are no term limits. Once I say whether I'm going or not, other candidates come forward and the actual election would take place in January or February of next year. Do you think Nadia Calviño would be a good OECD secretary general? I'm from Nadia's fan club Calviño. I have worked with her a lot because Spain is the ministerial president of the OECD. Nadia plays a prominent role as always.

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