Goirigolzarri warns that the pre-Covid GDP level will not recover until 2024


The president of CaixaBankJose Ignacio goirigolzarrihas called to “avoid extremism” when speaking about the evolution of the Spanish economy and has encouraged consideration of the current complicated framework after the coronavirus pandemic and in the midst of the war in Ukraine. A) Yes, after a “magnificent” summer, has considered that in the next two quarters “there will be an evolution of GDP around zero”. It is not as optimistic as the government in its GDP predictions, but it does not foresee “a significant drop in GDP” either, as it has been pointed out at an event in Pamplona organized by DN Management and reported by Europa Press.

On the other hand, it has ensured that the European Union is in a range between +1% and -1%, which at the national level would translate between “0% and 1%”, a job market “at levels similar to current ones”, a inflation between 4.5% and 6%and some types of interest “around 3%. For the president of CaixaBank, the “weak point” of the Spanish economy is productivity and the “vulnerability factor of public accounts”. Regarding this last aspect, he has contrasted the “effort” of “reducing debt” by private agents against public accounts with a “structural deficit and a debt that is at levels of 110-115%. Expenditures, he said, “have increased its weight on GDP by 6%” and has called for “redirecting this situation”.

As to lack of productivity, has stressed the need for “very complex” reforms that are “difficult” to carry out with the current “parliamentary arithmetic”. He has especially highlighted the importance of education and training, not only for young people but throughout their professional life “to adapt to the needs of the labor market.

“Insufficient profitability” in the financial sector

The president of CaixaBank has ensured that the Spanish financial system “It is in a better situation than in 2009-2010.” However, he has highlighted great challenges, including the fact that Spanish and European banks have had a return “below the cost of capital” for the last 7 years and are trading “below their book value”. “When you are in a situation of insufficient profitability you cannot increase your capital and therefore you cannot give credit and finance the economy”he stressed, to stress the need for banks “to achieve a reasonable return above their cost of capital”.

Another of the challenges, he said, is that of “the reputation“. He has admitted that “undoubtedly the image of the bank has never been extraordinary” and “it was greatly affected by the financial crisis, in which it was unable to assist companies and families, there were unorthodox practices and a high level of litigation “.

However, he has ensured that the sector “has changed a lot in recent years and today these clichés are not applicable”. He has highlighted “a quality of service” comparable to that of the European banking challenge. A “very clear” example, he said, has been the pandemic, in which 1.2 million moratoriums have been carried out and 1.5 million ICO credits have been granted. “There is a lot of noise but this must be conveyed because a powerful financial sector with good governance is essential for the well-being of society and the individuals”.

asked about its benefits of financial institutions in recent years, he has assured that they are not “extraordinary” benefits but that “we are in a normalization process”. The rise in interest is “beneficial for banks” but, in turn, “has the consequence of an economic slowdown that increases defaults.”

It is questioned whether globalization is beneficial

goirigolzarri pointed out that “we live in very special moments” in which the two trends: the fight against climate change and the digitization, accelerated by the pandemic that “made us rethink our supply chains.” To this is added the invasion of Ukrainewith “difficult to predict” geostrategic effects and the impact of the 2008 financial crisis.

All this in a current context where globalization is “questioned” that, “with all its limitations, it lifted hundreds of millions of people out of hunger and poverty,” although has created “inequalities” in the developed world. He has opined that this debate is the “tip of the iceberg of an ideological discussion” between people, among whom he has included, who are committed to multilateralism, international trade and the “defense of the freedom of individuals”, compared to others to advocate for bilateralism, protectionism and that prevail safety.

“We have a confrontation between a vision of a democracy based on the rule of law and a rise of authoritarianism”

Asked about the Russian invasion of Ukraine, he acknowledged that “it is difficult to know who is going to win and who is going to lose”, although he has stressed that, globally, “we are talking about a confrontation between the United States and China” and has advocated a “some deal” attitude globally. He has remarked that “we have to think about europe and what should the European situation be” and pointed out that, although Europe “has more affinities with the US”, it also has “its own issues and problems”.

Europe rises to the challenges

In this regard, the president of CaixaBank has highlighted the “excellent performance” from Europe in the face of the “crises we are experiencing”, with special emphasis on “great unity” in the response to the pandemic, and now with a “common front” in the face of the invasion of Ukraine.

At the European level, he stressed that there are “great challenges ahead”, including “complete our union” and has indicated that “we have not yet achieved a banking union” which “is relevant so that Spanish companies can compete on equal terms with German companies”. On the other hand, it has indicated that “with the crises we have realized about what Europe needs levels of autonomy far superior from the point of view of security, technological and energy“.

However, it has valued “the privileged situation we have”, representing Europe between 6 and 7% of the world populationthe 17% of global GDP and a 47% of global OECD spending. “We have formidable competitors who want to have the same position as us”, he stressed, to call for “exercising pedagogy, remembering the values ​​of the culture of effort, which is the opposite of passivity or complacency on the part of European society”. .

In this environment, goirigolzarri has called that “Spain make your voice heard” in Europe, where it has a “preponderant role”, especially after the Brexit. He has also stated that Spain is “unique” and “privileged” within European societies with a “clearly Europeanist” citizenship. “Something very important because it removes from the debate a sterile question that is whether or not we have to belong to Europe”, she has valued.

Source: lainformacion.com

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