The Minister of Economy and Competitiveness, Luis de Guindos, has participated today in the 18th Annual Goldman Sachs European Financial Conference that is being held these days in Madrid. During a meeting with investors, the minister stated that “as a consequence of the measures adopted in the last two and a half years, the Spanish economy is already on the path of growth and presents an upward profile. With the second quarter of this year, there will be four quarters of consecutive growth. All the indicators that we know point to the fact that the second quarter could be better than the first. ” "The government's projections are below consensus," he added.
“At the beginning of the legislature, the Spanish economy was facing a situation of serious economic crisis and credibility, due to the accumulation of macroeconomic imbalances and inaction. Today, after the adoption of far-reaching measures, among which it is worth highlighting the consolidation of the financial sector, fiscal consolidation and labor reform, Spain has returned to the path of growth and job creation, on solid foundations ”. He also highlighted the "effort" of Spanish society and now that effort "must be rewarded".
Regarding the Spanish financial system, De Guindos said that "it has undergone an unprecedented exercise in transparency and consolidation, which allows it to face the exercise of asset valuation and stress tests with full guarantees." The main lesson of this process is that "transparency is much more important than capital."
Asked about the future presence of foreign capital in Spanish credit institutions, the minister noted that "the Government has no preconceived ideas about the ownership of Spanish entities by foreign investors." “Sales of nationalized entities have already been made to foreign investors, which shows the investor interest in Spain. At the present time, the FROB is negotiating the Catalunya Caixa sale and this will take place before August.
Asked about the context of low inflation in the euro zone, he pointed out that it is important to differentiate between deflation and low inflation. In the case of Spain, low inflation has had positive effects in two main areas, the improvement in the competitiveness of the Spanish economy and the increase in purchasing power of families. This has facilitated the internal adjustment that had to be carried out to correct the main imbalances accumulated in the past by the Spanish economy. In the case of the euro zone, the European Central Bank has reiterated its commitment to meeting the inflation target within its monetary policy mandate.
Finally, the minister reiterated that in the face of situations like the one Spain has gone through in the last two and a half years, each country must apply its own policies depending on its circumstances. It is essential to make a correct diagnosis and to be determined to apply the necessary measures to correct it. In his opinion, it has been demonstrated that the recipe that combines fiscal consolidation measures and structural reforms gives good results.