Together for Spain

While in Madrid it is discussed whether Pablo Iglesias will comply or not with the responsibilities that Sánchez is willing to assign to such decisive organizations as the Ombudsman, the CNMV or the CIS (Research Center), in Christine Lagarde , the Candidate to preside over the ECB in the next eight years. Lagarde has stressed that his mandate will have to move in a dislocated world: tensions between China and the United States, environmental deterioration, unemployment and inequality and the rise of populist parties - identity and anti-globalization - that call into question the liberal order that we gave ourselves after the World War II and the European project.

Christine Lagarde arrives in very different circumstances than her predecessor arrived: the European economy is in a better position than the one Draghi inherited , but in recent months it has entered a period of slowdown and, worse, on the horizon it They look at clouds. And it is a fact that today we have less gunpowder to fight a possible recession. Monetary policy cannot give much more of itself, and it is utopian to believe that we can pull budgetary policy when we are indebted to the eyebrows. Nor does it seem that there are leaders capable of launching an ambitious structural reform process. As Juncker , the outgoing president of the Commission, remembers, our leaders know what needs to be done, but they don't know what needs to be done to win an election after having done what had to be done. But let's go in parts.

The main economic indicators warn that we can enter into recession within a few months . Each time the yield of the ten-year sovereign bond has been lower than that of the three-month bond, a crisis has occurred sooner rather than later. That is what happened in France (1970), in the United Kingdom (1980), in Germany (2000) and in the United States (the dotcom crisis of 2001). The American performance curve was reversed in March and the thing remains the same now. The purchases of the companies have fallen in recent months, as well as the average hours worked in the manufacturing sector. It is true that the figures for growth and unemployment, and the American stock indices indicate that the period of growth of the American economy has been the longest since World War II. But that is nothing reassuring because, as Genesis says, some years of fat cows are inexorably followed by others of thin cows.

What to do if these forecasts are confirmed? The most important thing is to make a correct diagnosis. Nouriel Roubini ( The Anatomy of the Coming Recession ) believes that the coming crisis will not be a demand crisis like the one in 2008 but a supply crisis caused by three causes: the commercial and currency war between China and the US, the war for the control of new technologies and the possible rise in the price of oil if the situation in Iran is complicated. Not to mention Brexit or Argentina. Notice to navigators: if the storm falls, Europeans will be the most affected because we depend more on exports than others: in 2017, they represented 27.9% of our GDP, while in the United States they did not exceed 12.1% . Lagarde has not explicitly shared this diagnosis , but I have deduced from his verbal language that he does agree and has said something obvious: it is not the same to fight against inflation, which is what we have done historically, than to fight against deflation.

Being different the nature of the disease seems obvious that the therapies cannot be the same. Lagarde hasn't got too wet; He has limited himself to pointing out that monetary policy must remain very accommodative on a predictable horizon, but he has not wanted to go much further. What he has specified - even strongly - is that he is not willing to act as the lone ranger as Draghi did ; It intends that the other European institutions and national governments collaborate with it in keeping the ship afloat. In budgetary matters, he has been in favor of making the Stability and Growth Pact more flexible and has invited the Germans to embark on a more aggressive fiscal policy. But where he has insisted more is on the need to address the reforms necessary to preserve the integrity of the eurozone .

As in Deusto they taught me to say things and not things I have finished my intervention with some conclusions in the form of questions. How far can interest rates fall without affecting bank profitability and financial stability? Will the ECB continue to hold on to the rule that relates what debt to buy with the size of the economy, or will it be more flexible to reward countries that embark on a reform process and penalize those that remain anchored in the past? Do you think the Central Bank should continue to limit its debt holdings to one third of the debt of each country or that it could stretch a little more? Will the ECB continue to prioritize the purchase of public bonds or will it buy more corporate bonds? Could the monetary easing policy be extended to the purchase of bank bonds? He has promised me that we will talk about that soon. I will tell you.

And that leads me to talk about Spain again. I don't need to extend much about the situation of our economy because my co-religionist Daniel Lacalle recently did it: "A country like Spain, with the second highest percentage of the world's external debt, high unemployment, a small and fragile business sector and significant fiscal imbalances and commercial, can not ignore the risks we face, especially when internal data worsens in the eyes ... it is time to leave demand policies and apply supply policies "(Argentina and Germany, more alarm signals , August 17). The conclusion that Lacalle draws from this data is the same as that advanced by Roubini: "It is time to leave the demand policies and apply the supply policies." And that requires taking the bull by the horns and reforming our productive system from top to bottom.

If I am allowed to smoke, I will remember that everything in Spain lasts 40 years ; the first Restoration lasted 40 years, which goes from Cánovas (1875) to Dato (1921); the dictatorship lasted another 40 years, (1936-1975); the Transition began in 1977 and ended when in 2015 and precisely as a result of the crisis, bipartisanship flew through the air. What we now have to do is start a second transition that updates our coexistence system: revision of the Constitution to adapt it to the new times, reform of public institutions (Senate, Justice), update of the tax system, including financing of the Autonomous Communities and of the Social Security and an aggiornamento of our productive system to gain in productivity and thus make possible the increase of wages and the maintenance of the Welfare State.

It is obvious that this second transition cannot be addressed without an agreement of the three great constitutionalist parties - the PSOE, the PP and Citizens. Neither the PP nor Citizens would ever accept in a coalition government with Sánchez separately because that would mean giving the other a monopoly of the opposition. Both have to enter. As I said on another occasion, knowing Sanchez, this grosse koalition will only be possible if it is based on a very specific agreement and for a certain period. More or less what was done in 1977 with the Moncloa Pacts and the 1978 Constitution. A kind of Union sacrée that could well be called Together for Spain. If we do not do it for patriotism, let us do it so that the crisis on the horizon does not take ahead of what many years it has cost us to do. Once the task is finished, the Courts are dissolved and to whom God gives it, Saint Peter blesses it .

José Manuel García-Margallo y Marfil, MEP, has been Minister of Foreign Affairs.

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