Spanish experts, businessmen and leaders show their support for the Draghi report’s diagnosis and demand relax competition rules create European giants and enable the European Union to compete with the world’s leading economies. This is one of the main conclusions of the economic and commercial consensus, corresponding to the fourth quarter of 2024, that PwC has been preparing since 1999.
89% of experts agree with the diagnosis and recommendations because “this is what Europe needs”. In this sense, 48% think it will be achieved “because it is what Europe needs”while 31% are not as optimistic because “States will not implement it because it amounts to admitting a loss of sovereignty”. In turn, 21% believe that “the fragmentation and political polarization of the Brussels Parliament will prevent the implementation of the proposals”.
Among the measures that have received the greatest support to start creating a single market and for the European Union to compete with the United States and China, isWith 82% in favor, it is a question of relaxing the rules of competition which, in the opinion of those interviewed, “have significantly slowed down European industry”. In this sense, 58% of respondents, and supported by Draghi, go further and are in favor, in the specific case of the automobile sector, of the imposition of customs tariffs on Chinese electric vehicles since the Asian giant is tackling the free jurisdiction. However, 35% are wary of this measure, already approved, because they believe that “it will generate a trade war with bad consequences for everyone.” Furthermore, 3% consider that this will be a harmful measure “because it will harm European producers based in China”, underlines the report prepared by PwC.
Excessive regulation
In general, 70% of experts, managers and businessmen agree that Excessive regulation is the main cause of the EU’s ineffectiveness, while 18% think that it is the factor which promotes “the bad image that the EU has among citizens”.
The Draghi report proposes a series of recipes that can be implemented in Europe to stimulate the economy. Respondents chose as the two highest priority measures to accelerate innovation and promote investment. Other measures have been left on the back burner, such as revitalizing competition, reducing the skills and capabilities gap (difference between the skills of employees and those that the company needs) and, finally, strengthening of European governance.
Respondents are divided when asked whether, in their opinion, a public-private investment of between 750,000 and 800,000 million euros is feasible. that the report proposes: 46% respond in the affirmative and consider that this is feasible if joint debt issues and private capital mobilizations are carried out, while 52% consider the opposite, partly because they believe that the Companies are not able to invest these amounts of money. In this sense, almost 60% warn of the risk that these investments will end up increasing the EU’s debt.
Finally, another measure proposed and supported by the majority of respondents is to reform the EU R&D&I framework program to allocate more resources to disruptive innovation and reduce bureaucracy (98% ), as well as the creation of an organization responsible for critical raw materials. Platform that operates centrally (69%).
Slow-down
The experts, businessmen and executives who make up the PwC economic and commercial consensus panel recognize the good moment that the Spanish economy is going through, being 72% consider it excellent or good. But the optimism and good opinions about the progress of the Spanish economy are no longer a question of feelings, since the European Commission, the IMF and the Independent Fiscal Authority corroborate the good macroeconomic figures of Spain, even if they recall that the deficit and the public debt precisely now, taking advantage of a favorable environment.
It’s because in a year, Opinions (60.5%) point to a slowdown in activity but this is considered a natural phase of the economic cycle. and not necessarily with a negative situation. The average of expert estimates puts the growth of the Spanish economy at 3.4% in 2024 and 2.1% for 2025.
Thus, when asked about the future and how we will be in a year, only 11% believe that it is better than today and 56% indicate that it is “worse”, compared to 29% who had a negative opinion in June 2024. . . While, For 33% of experts, “it will remain the same”.
If the macroeconomic data are finalized, we see that 93% believe that the situation of families is fair or good and for the next six months we expect family consumption to remain stable (65%), and 25% that it increases.
Concerning the demand for housing, those who expect an increase go from 28% to 38% while 49% believe that it will remain stable and 13% that it will decrease.
Two other relevant variables are the prospects of the exports and competitiveness. In both cases, the conviction is that the situation, in a year’s time, will remain the same as it has been until now. There are virtually no variations from the previous Consensus responses, although there is a slight increase (from 15% to 23%) in those who think the outlook for the foreign market could deteriorate.
Regarding the evolution of interest rates, The arrival of Donald Trump in Washington and the announcement of inflationary measures, such as the mass expulsion of immigrants or the imposition of customs duties, could modify the plans of the Federal Reserve, which has announced possible rate cuts . Therefore, the majority of respondents expect a drop from the current rate of 3.75% to levels between 3% and 2.75% in June 2025, and between 2.5% and 2.2% in December next year. But experts are also banking on a slight drop in inflation, For next year, they place it at 2% in June 2025 and 2.1% for December of the same year.
