Last Thursday, March 2, I was able to listen, on the radio, an interview with the Spanish Minister of Economy, Industry and Competitiveness, Luis de Guindos. It seemed like a very interesting interview and I would like to share it with you; but, as it is a little long, I will try to summarize it.
The Minister begins the interview by commenting on the EPA (Active Population Survey) data, which appeared on the same day: growth of 0.7% of Gross Domestic Product (GDP), in the fourth quarter, and 3.2%, in the whole of the year. In this sense, De Guindos says: "This is a very positive fact, because we are growing twice as much as Europe is growing ... and, besides, it is not only the intensity of growth, but also the quality, ie , it has occurred with a recovery of the domestic demand, but with a lot of contribution of the exports. Spain has a historical record --that never had had-- of Current Account Surplus / Balance of payments, of more than 2% of the GDP, for the fourth consecutive year ... And, as a last resort, it is not the quantity, but the quality: when one sees the quality of the fundamentals of growth --which is accompanied by a very positive evolution of the labor market--, this Is an indicator that, in the future, the first quarter of this year will continue with a positive growth, with employment generation and that we started 2017 with a remarkable inertia”.
The Minister assures that “the growth of 2.5% is practically guaranteed”. De Guindos says that, in the Ministry of Economy, they are satisfied, because their projections are being fulfilled and this is not only important to correct, but for a very important principle in Economics, which is: credibility.
By the way of this datum, he says that “In this quarter, we will be at the level in which we were in the pre-crisis income: this is a partial consolation, because we are going back to the year 2007, but ... of course, Spain has lost a decade ...! --because Spain should have to have grown from 2007 to 2017--, then, we are at that starting point in 2007 --for example, if Spain had grown, by an average of 1,5% annually, now we would have an income of between 15 and 20% higher--...., we lost 10% of our wealth, at the beginning of 2013 ..., that we have just recovered, but we have to recover it that we have stopped growing, because of the worst crisis of the history, that we have suffered from 2007 to 2014”.
De Guindos comments on the latest Survey of Active Population, about employment in Spain, in the last quarter of 2016, --according to the APS, unemployment fell by 9,355 people and Social Security membership increased by 74,080 people-- and he says : "Well, February is a month of transition ...., we are getting closer to the good season ..., there has been a drop in unemployment, there has been an increase in affiliations ..., they are certainly positive data and this indicates that the Spanish Economy continues to grow, continues to create jobs ...., there is still a lot to do, of course --we still have 18.6% unemployment in Spain--, but it is evident the strength that we had, in 2016 and in 2015, and this data ratify it. The employment data is a consequence of economic growth and economic growth is a consequence of the reduction of macroeconomic imbalances, and these are indicators on this trend is perfectly feasible in the coming months and in the next quarters”.
The presenter of the program asks: "When will we have the pre-crisis unemployment data?" and the Minister answers: "Well, we need about a million and a half job creation. We have recovered more than half, in terms of affiliates, in terms of APS; If we can keep the rhythm of job creation, around half a million jobs a year, we still need 3 years, that is the goal: to go to 20 million employees, as we had at the pre-crisis level, and so we still need a Million and a half; So we have to continue making every possible effort --the Spanish Government and Spanish society .....,especially the private companies, which are the ones that create jobs-- , to continue with the effort”.
De Guindos talks about quality in employment, from now on: "The issue of quality is very important, but if we look at the data of employees in Spain, according to the Survey of Active Population, the 75% have an Indefinite Contract, there has been a change in the Economic Model, which has led to an increase, in the number of workers, in the labor market. Undoubtedly has a significant impact, from the point of view of employment --for example, the Construction was the main source of growth and employment generation, in the years 2005, 2006 and 2007, now this is not happening, now they are exports and , logically, the workers, who are in different sectors to the one of Construction, need a type of formation, a type of abilities different from the ones that they had before, because Construction did not demand a specific type of formation; that is why active policies and training policies are vital; It is necessary to try that those workers, who have lost their employment in Construction, are going to be placed in other sectors, that have more to do with the Export sector, which also gives more stability to the Spanish Economy”
The Minister wanted to highlight “the enormous effort that Spain has made to reduce the Public Deficit, which was at 11% and now, this year, we have to go 3.1%”. And he also emphasizes that “the tax collection, in January and February, has increased notably; he says that “we have entered with a cruising speed of 3%, in 2017 --it is feasible to reach 2.5%-- ; and this optimism is due to the reforms that we did in 2013, 2014 and 2015. And Brussels has positively valued those reforms. Spain, now, is not in that uncertainty, that we had, facing Europe”.
Well, the interview was longer, but I think I have offered you enough information, about what the Minister De Guindos thinks about our Economy.
I hope that you have liked this interview.
Until my next post, kind regards,
Luis.
Sponsored by Costaluz Lawyers.
Please click below:
