The governor of the Bank of Spain,
Pablo Hernández de Cos
, foresees "a decade" of adjustment measures in Spain to face the structural deficit dragged down and multiplied by the pandemic.
During his speech at the Expansión International Economic Forum, Hernández de Cos has identified the sustainability of public accounts as one of the structural damages of the pandemic.
"We were already starting from a fragile situation with a very high structural deficit and it is
going to be a hindrance that will have to be tackled,
" said the governor.
He believes that adjustment measures will be necessary with "an increase in income or a reduction in public spending in the next decade
that will have negative effects on growth but are absolutely unavoidable
."
The governor has intervened in a discussion moderated by the president of Unidad Editorial -editora de
Expansión
and EL MUNDO, among others- Antonio Fernández-Galiano, and, without making direct reference to the Budget project presented by the Government, has marked distances with the current government policy.
In addition to missing the Executive to expose a path of adjustment in the medium term, he has asked
"to refocus economic policy in the coming quarters"
considering that the one launched in the pandemic to help companies through guaranteed loans is no longer so useful by the ICO.
"This crisis seems to be very persistent and we are going to leave with a clearly more indebted business sector."
Therefore, it thinks that it is necessary to
"replace the indebtedness by direct subsidies, participations in the capital or relief of the enterprise debt
".
He has also warned against holding companies that are no longer viable, due to the damage that zombie companies end up doing to the economy.
In the opinion of Hernández de Cos, the reforms necessary after the pandemic are so far-reaching that state pacts are required more than ever.
From left to right the president of BBVA, Carlos Torres, and the governor of the Bank of Spain, Pablo Hernández de CosANTONIO HEREDIAMUNDO
Aznar and the alliance of moderates
On this point, the former president of the Government,
José María Aznar
, has assured that, "leaving radicalisms aside", he sees "
space to forge an alliance of moderates and modernizers of Spain under the umbrella of the Constitution and the European Union
and not for a legislature, but for several decades. "
But he also sees the danger of emerging from the current pandemic with "more populism, authoritarianism, interventionism, dependence and less individual economic freedom."
"The liberal order is threatened", in his opinion, and he has highlighted the value of freedom with this criticism: "
Six-month states of alarm and curfews are proclaimed legally, because someone who was passing by says so."
"Spain has a complicated future, if it separates from the Constitution and the EU", he has come to say.
Torres: reforms and investment
The president of BBVA,
Carlos Torres
, has agreed that it is necessary to build trust to get out of the crisis.
"
What is coming I would summarize in reforms and investment
(...) The focus must be to attract investment and that requires generating confidence and reforms that can help investment take risks."
Among the reforms, he highlighted that of education, the labor market and the digitization of the public administration, and stressed that public-private collaboration is "essential" for economic recovery.
Galiano has put on the table of the colloquium that "the pandemic has come to complicate more the problems in which the world was already entangled".
Former Minister
Josep Piqué
has agreed, but remembering that the world has overcome other pandemics and greater evils.
The problem he sees is that "to eliminate the uncertainty
is to get the diagnosis right, but the current patient gives confusing and contradictory signals
."
For now, "the only way to combat this uncertainty is through messages from political power, which must be clear, defined and based on the maximum possible consensus and thinking in the long term."
By videoconference,
Valerio De Molli,
president of The European House-Ambrosetti,
has joined
, who has exposed with data how the world is experiencing the worst global socio-economic crisis in 20 years and how Spain is in the world "top ten" in bad health data and even of leadership in the economic collapse.
It has also warned of the lack of confidence that causes the savings rate to skyrocket in Europe.
That is why the governor of the Bank of Spain has insisted that "the only way for them to consume and invest is a certainty about what will happen in the future", which in his opinion must be achieved with long-term visions in the ruling class.
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