The Minister of Economy, Commerce and Business, Carlos Body, defended today that The agreement between the PSC and the ERC respects the principles of fairness, sufficiency and interterritorial solidarityThis is what he said during his participation in the first session of the cycle. “Conversations with Toni Roldán”, organized by EsadeEcPol, where he stressed the importance of this agreement to advance the reform of the regional financing system.
Corps stressed that the challenge now is to “anchor” these principles in practice, while addressing the necessary reform of the financing system, which, he noted, is “ten years behind schedule.” The minister considers this update essential for improve the distribution of resources between autonomous communities and ensure a fairer and more balanced system.
Likewise, Corps stressed that the financial autonomy of the communities must be accompanied by shared fiscal responsibility. “At European level, we are very used to applying it, but it is also essential to implement it at national level,” he stressed, highlighting the need for regions not only to manage their revenuesbut also assume their joint responsibility in tax matters.
Fiscal rules require a long-term approach
Asked about the pension system, the Minister called for moderating alarmism around the sustainability of the pension system and public finances, stressing that there are mechanisms to implement additional measures if necessary. He explained that the sustainability of the pension system is guaranteed by two key elements: the budgetary rules and the pension reform itself. Regarding the fiscal rules, New regulations require a long-term approachstipulating that countries’ spending must increase over the next four years to reduce long-term debt.
The body stressed that Behind these rules lie complex calculations related to future expenses and income.such as economic growth capacity and the impact of population ageing. Spain is currently negotiating its structural budgetary trajectory with the European Commission, which will set the framework for the next four to seven years. This budgetary adjustment already takes into account the expected increase in pension expenditure.
At the national level, The recent pension reform aims to ensure the viability of the system. However, it also establishes mechanisms to address possible deviations from the initial assumptions, such as changes in population or life expectancy. The Independent Authority for Budget Responsibility (AIReF) will assess next year whether further adjustments are necessary.
“It is essential to moderate alarmism around the sustainability of the system and public finances in general,” Body concluded, stressing that there are mechanisms to take corrective measures if necessary.
Impact of reforms before and after the “Next Generation EU”
The body noted that One of the key factors in the recovery of the Spanish economy after the pandemic has been the “success” of European funds. New generation EUThe Minister stressed that these funds have not only helped support European economies in the most difficult moments of the Covid-19 crisis, but have also been fundamental in promoting the modernization of economic activity in the beneficiary countries.
Body stressed that this investment has had a positive impact on Spain’s economic growth and has served as an incentive to carry out the structural reforms that the country needed. In this sense, he indicated that asked the European Commission for a comparative analysis of the degree of implementation of these reforms before and after the arrival of the ‘NGEU’ funds. For Corpo, it is important to highlight and deepen the success that these funds have represented for the country and Europe as a whole. In fact, he indicated that there are companies that have been able to make investments thanks to these funds, which if they had not been there, would not have been available, they would have done so.
Good news for Spain
The Minister also highlighted, during his speech, the persistence of good news regarding the country’s macroeconomic parameters, which leads to a constant revision of growth prospects by national and international organizations. In this sense, He recalled that the Bank of Spain raised its GDP growth forecast for this year to 2.8% and improved its forecast for 2025. Furthermore, he highlighted the recent upward revision of GDP by the National Institute of Statistics (INE) for the years 2021, 2022 and 2023, in line with what other European statistical institutes are doing. This improvement is due both to a mandatory methodological review at European level and to the regular annual update of data. Specifically, Spanish GDP growth in 2023 now stands at 2.7%, two-tenths more than the initial estimate. For 2022, this figure rises to 6.2% (four tenths more) and for 2021 it reaches 6.7% (three tenths more). This means that the Spanish economy has recovered from the pandemic more robustly than initially thought.
Body stressed that economic growth, which was already considered strong and balanced, now appears even more solid and sustainable, with an increase of one point in real terms. He also stressed that Spain has overcome the crisis caused by the Covid-19 pandemic without structural scars, thanks to measures such as the ERTE and ICO credits.
However, the minister acknowledged that Challenges persistlike the improving the quality of employment and the need to reduce youth unemploymentwhich is still high. He stressed that a youth unemployment rate of 25 or 26% cannot be accepted and advocated continuing to work to improve these figures, which are at the top of European indices.
Likewise, he stressed that Spain is among the OECD countries where real disposable income has increased the most, which he attributed to both income support and the gradual moderation of prices.
The head of the Economy also presented his proposal for create a “regime of 18”with the aim of reducing the operational barriers that companies face within the country. This initiative aims to simplify the administrative burden that currently limits the activity of companies. In fact, Corps announced that it will meet this afternoon with representatives of the autonomous communities and city halls to promote this proposal, which provides for the creation of a “virtual community” that allows companies to operate more efficiently throughout the national territory.
The minister explained that the long-term goal is extend this idea of a single market to Portugalstressing that he has already started negotiations with his Portuguese counterpart to move forward in this direction. The body is waiting for you, within three months, before the end of the yearnot only is a clear diagnosis made, but concrete measures are also implemented at the sectoral level that benefit companies. The minister highlighted the importance of this initiative to improve the productivity of companies, stressing that it is about “freeing up unproductive hours” and addressing one of the great challenges of the Spanish economy.
Furthermore, Corps stressed that Artificial Intelligence (AI) represents a great opportunity for SMEs in Spain. As he explained, the government is developing specific AI tools to facilitate the management of small and medium-sized enterprises. “Bureaucracy is like an iceberg for SMEs,” Body said, referring to the administrative difficulties they face. The objective of these tools is to make it easier for SMEs to access resources and services such as those offered by the ICO, ICEX, and different regulations or aid. In this way, in addition to adding new opportunities, the objective is to lighten the daily operational burden of SMEs, improving their efficiency and competitiveness.
Teresa Ribero is “up to the task”
The minister stressed the Spain’s growing weight in the new structure of the European Commissionhighlighting the appointment of Teresa Ribera as European Commissioner for Competition and Executive Vice-President for the Green Transition. Body described the appointment as “in line” with the influence that Spain has had in the European Union in recent years, stressing its importance at a key moment for the bloc.
The minister stressed that the new leadership of the European Commission will have to face common challenges, for which Mario Draghi’s competitiveness report could serve as a reference point. According to him, the European Union must exercise “strategic leadership in the future”, while warning of the need to recognize and take into account certain specificities.
Body stressed that, Even though the EU approaches international relations with a multilateral and open approach, one should not be “naive”. The minister stressed that on some occasions European companies do not compete on an equal footing with other regions, which must be a key element of the European economic strategy.
