José Mª Gay de Liébana
Professor at the Faculty of Economics and Business of the University of Barcelona
Full academician of the Royal European Academy of Doctors-Barcelona 1914 (RAED)
The music you want to hear is one thing and the lyrics are another. Honestly, the greatest mobilization of resources in history announced bluntly by the Spanish president sounds, with all due respect, a joke.
Let’s go by parts. The first thing that is done, and it seems very good to me, is to safeguard our large companies by brandishing a protective shield against a takeover bid to prevent strategic companies for our economy from falling into foreign hands, from outside the European Union, that is to say, Chinese or North American primarily.
Let us briefly go to the core of the president’s announcement on Tuesday, March 17 in the afternoon, waiting to read the fine print of the Royal Decree, which offers, suddenly, an appetizing headline but at the moment of truth little or very little or almost nothing. 200,000 million euros mobilizes the Government!
Mobilizing is not the same as paying… And how is that mobilization? Well, of the 200,000 million, 100,000 million in public guarantees of loans granted by the bank, which is the first to scratch the pocket, the one that some government faction wants to grind to taxes.
Then, 83,000 million euros, pay attention here, it will be a mobilization of resources from the private sector, that is, it will be private and non-public companies that will bear the burden of putting that money in our economy. Which will be? We sense that those that provide certain public services or whose prices are regulated.
The rest to complete the 200,000 million euros, which are 17,000 million, will be direct State aid to the economy that, obviously, will constitute more public spending, not effort. More public debt and, consequently, later we will end up paying it cleavage.
Because then the recovery will come and there it’s, when returning to normality, when the moment of the tax stick arrives, which, in fact, is still in force in this emergency as well as the social contributions. Honestly, the announcement with emphasis from our president is nice to hear, although when interpreting it, it follows that the drastic adjustment that in today’s conditions requires our wobbly economy is far from real needs.
This was the time to launch a life preserver to the millions of companies that very atomically make up our business fabric, it was the opportunity to anesthetize the anguish and economic stress that our economy is suffering, hit hard by what undoubtedly constitutes a disruptive crisis that suddenly, in a few days, has torpedoed the business and family economy and bombarded the Spanish private sector.
With the package of measures implemented, unless when studying the Royal Decree some comforting surprise appears, which seems strange, the Spanish economy doesn’t emerge from the bottom of the well to which it falls. Nobody in the Government has remembered the companies that make their resistance the most edifying example of fighting against the disruptive crisis. Committed days await us.