03/12/2011
http://assets.fundacionfaes.org/Home+FAES/2011/11/DSC_7519_d1.jpg Luis de Guindos: The problem of the economic slowdown is, firstly, that since the world has a very high debt volume, any bad news about economic growth immediately impacts the perception of the private and public sector's potentiality to pay their debt. This is what lies behind the capital markets' concern
The main goal of what an economic policy should do is sparking the necessary confidence and credibility to effectively modify the current closing situation of the stock markets
The important issue here is correcting the imbalances of Spanish economy. Austerity is needed, and this is a crystal clear priority, but not the only one
Reducing public deficit is important, otherwise nobody's going to finance us
The most urgent thing is setting the bases to effectively generate an element of credibility and confidence on the Spanish economy's recovery capability in the next quarters. And this is made through economic reforms
Spain has huge difficulties because of its labour market, the situation of the financial system and of the banking sector, it has difficulties in the sphere of territorial administrations?we are definitely paying for that now
But also, and this is the element for hope, the Spanish economy has a notable improvement margin when the appropriate measures are taken. The important thing is keeping the capability and autonomy of the future government in order to implement the reforms that must be made. And I am convinced that this will be done
Joaqu?n Trigo: The Administration must administrate, supervise, not substitute the private sector. It has to be better, not bigger, and this is what it has to do for its own good and that of the citizens
With regard to the labour market, we must reduce labour costs not related to wages and level the severance payment to the EU's average. Not above it, not below it, but level with the average
The Administration has to be effective and also efficient. If it's not efficient we will encumber recovery
The energy price should be real otherwise we could have a greater problem that we think
We should have incentives to make companies invest
Juan Jos? Toribio: Is a new recession possible given the current international economic context? It is possible in advanced economies, but not likely, and it is not possible in emerging economies, but they can suffer because of the diminishing exports and the lower price of commodities
The economic policy challenges in the world, according to the International Monetary Fund, are:
1. Fiscal consolidation, in other words, the need to cut budgetary deficits in the advanced economies, and not too quickly because that would generate a recession, and not too slowly because that would foster a loss of credibility. That is the great argument. However, we don't have such an argument in Spain because we don't have time.
2. Rationalising the financial systems of many world countries. Recapitalising banks with two aims: opening those markets that are closed due to lack of confidence and restoring the ordinary credit flow back to world economy.
3. External rebalancing
The Eurozone is a part of that slowdown and the most immediate challenge stems from the necessity of funding a series of countries which have lost market confidence and cannot find the necessary resources to fund themselves because they have an important budgetary deficit and/or a high public debt
Juan Velarde: Addressing the challenge of competitiveness is the first problem that the Spanish economy has now. It is related to another one, also very important, which is the deficit of the public sector, but the competitiveness one should be tackled immediately
Technology is the necessary condition, but not sufficient, for competitiveness to emerge. There are other very important issues: human capital, energy independence and cheapness, an adequate company management or taxation, amongst others
The road to competitiveness in Spain must be paved through ten means:
1. The work market, especially with regard to collective bargaining
2. Energy, which must follow conditions of cheapness, abundance, good quality, an adequate index of effectiveness, a high national percentage
3. Suppressing bureaucratic work which only hinders the development of companies' activities
4. Making free market more of a reality, making it much freer than it now is
5. An infrastructure policy that takes advantage of Spain's location
6. A tax system adapted to the new necessities and specifically the companies tax
7. Changing the funding system of pensions
8. A radical modification of the education system
9. A transformation of our scientific-technological system
10. A collective awareness that if we continue without addressing the issue of competitiveness, we won't be finding a way out of the crisis grieving us