On Monday 28 September 2015, the Rafael del Pino Foundation organised a meeting entitled "A plural debate on the Spanish economy" in which Daniel Lacalle, Emilio Ontiveros and Juan Torres spoke on the occasion of the publication of their book "Talking is how people understand each other" published by Deusto. It is an essay that leaves aside political and economic ideology to seek common ground on how to revive our country.
Daniel Lacalle is an economist. He holds a degree in Business Administration from the University of Madrid, a CIIA (Certified International Investment Analyst) qualification, postgraduate studies at IESE (University of Navarra) and a Master's degree in Economic Research. His career in portfolio management and investment began at the hedge fund Citadl, in the United States and Great Britain, and continued at Ecofin Limited. He has been voted for five consecutive years in the Top 3 managers of the Extel Survey, the Thompson Reuters ranking, in the general, oil and power categories. Prior to his time as a manager, he worked as a financial analyst at ABC Amro (now RBS), and held various responsibilities at Repsol and Enagás, where he received the award for best IPO (IR Awards 2002). Daniel Lacalle writes a weekly column in El Confidencial, and is a regular contributor to CNBC, The Commentator and The Wall Street Journal. He has written the books "Nosotros los mercados" (2013), "Viaje a la libertad económica" (2013) and "La madre de todas las batallas" (2014), all published by Deusto.
Emilio Ontiveros Baeza is Professor of Business Economics at the Universidad Autónoma de Madrid (UAM), where he was Vice-Chancellor for four years. He is founder and president of Analistas Financieros Internacionales (Afi), a consultancy firm to which around one hundred professionals belong. He is the author of numerous academic works on economics and finance. His books include: La economía en la red. Nueva economía, nuevas finanzas (Editorial Taurus, 2001) Global Turning Points. Understanding the Challenges for Business in the 21st Century with Mauro Guillén (Cambridge University Press, 2012), translated into Spanish as Una nueva época. Los grandes retos del siglo XXI, with Mauro Guillén (Galaxia Gutenberg, 2012), El Rescate, co-authored with Ignacio Escolar (Aguilar, 2013), El ahorrador inteligente, with David Cano (Espasa, 2014) and A new era in Banking. Landscape after the battle with Á.Berges, M.Guillén and J.P.Moreno (Editorial Bibliomotion, 2014). He edited the journal Economistas del Colegio de Economistas de Madrid and is a member of several editorial boards of specialised publications.
Juan Torres López is Professor of Applied Economics at the University of Seville and author of numerous scientific and popular publications. On the economic crisis he has written books such as "Desiguales. Mujeres y hombres en la crisis financiera", with Lina Gálvez (Icaria Editorial, 2010), "La crisis de las hipotecas basura. ¿Por qué se cayó todo y no se ha hundido nada?" (Ediciones Sequitur, 2010), "Contra la crisis, otra economía, otro modo de vida" (Ediciones HOAC, 2011), "Hay alternativas" (Ediciones Sequitur, 2011) and "Lo que España necesita" (Deusto, 2011), the latter two with Vicenç Navarro and Alberto Garzón. Together with Vicenç Navarro, he drafted a basic document for the subsequent drafting of Podemos' economic programme.
Summary:
<strong> <em>People understand each other when they talk. A plural debate on the Spanish economy Daniel Lacalle, Emilio Ontiveros and Juan Torres (28 September 2015).</em></strong> On the occasion of the presentation of the book Hablando se entiende la gente. Un debate plural sobre la economía española, the Rafael del Pino Foundation hosted a debate between its authors: Daniel Lacalle, investment manager and columnist for El Confidencial; Emilio Ontiveros, Professor of Business Economics at the Autonomous University of Madrid (UAM) and President of Analistas Financieros Internacionales; and Juan Torres, Professor of Applied Economics at the University of Seville and one of the authors of the document that laid the foundations for the subsequent drafting of Podemos' economic programme. The debate began with an analysis of the results of the Catalan elections from an economic point of view. The three participants agreed on the need for dialogue in Catalonia in order to find a solution. Emilio Ontiveros stressed that "the markets do not seem to care too much" about the victory of the separatists because they do not believe that, with these results, Catalonia will separate from Spain. For his part, Daniel Lacalle warned that, since 2010, 3,900 companies have left Catalonia and foreign investment in this autonomous region has been reduced by 60% as a result of separatist tendencies. In turn, Juan Torres pointed out that "we still do not have a project for Spain that is attractive to all Spaniards". The debate then moved on to the content of the book and began to analyse, first of all, the causes of the economic crisis. The three experts agreed that the causes lay in macroeconomic imbalances, excessive indebtedness and the high degree of bankarisation of the Spanish economy. Lacalle also criticised the fact that the real estate bubble was replaced by another bubble as a result of the counter-cyclical measures implemented to tackle the crisis, and highlighted as positive elements the speed with which household and corporate debt was reduced, the financial reform and the speed with which macroeconomic imbalances were corrected. Torres, for his part, said that the crisis was also due to the concentration of economic power in a few hands, a lack of competition, an excessive dependence on public spending by companies and an asymmetrical labour market. Ontiveros, on the other hand, placed particular emphasis on the reduction in the economy's potential growth because all the elements that produce this growth have contracted: physical capital, technological capital, human capital and social capital (trust in institutions and in others). In his view, it is a priority to restore these four forms of capital, especially social capital. With regard to efforts to combat the economic crisis, the three experts agreed that monetary policy alone cannot solve the problems if it is not accompanied by other types of measures. Torres pointed out the need for fiscal policy to work well and criticised the fact that the monetary expansion being carried out by the European Central Bank is not reaching the economy. For Lacalle, the key lies in also taking measures to support the creation of companies and the generation of employment, and he cited the case of the United States as an example of success in this regard and how it is emerging from the crisis with economic growth of more than 2% and an unemployment rate of 5%. Ontiveros agreed with the latter assessment and stressed that the measures that have been taken in the US reflect the fact that they have a memory of the Great Depression, which justified the adoption of economic stimulus programmes and support for the creation of companies. In Europe, on the other hand, the first economic policy decisions taken further exacerbated the fall in demand, increased public indebtedness and led to the death of businesses. The problem now is the ability of economies to grow and service that debt. As far as the Spanish economy is concerned, the three experts agree that we are indeed in a phase of recovery, but, for now, it is fragile, not of sufficient quality for people to perceive the improvement, in the words of Ontiveros. For the UAM professor, the keys to the change in trend lie in the ECB's monetary policy, the rescue of our financial system, the depreciation of the euro against the dollar, the increase in the export propensity of Spanish companies and the greater geographical diversification of their foreign sales, the fall in the price of oil and the drop in wages. The problem is that the ECB's policy has an expiry date, that it is not clear that the euro will continue to fall against the dollar, that it is not known whether oil will remain low and that "it is not intelligent" to keep wages low because it slows down consumption and the process of reducing household debt. For Lacalle, the fragility of the recovery lies in the high levels of unemployment, the lack of labour mobility and the reduced spirit of entrepreneurship in Spanish society. In his opinion, in order to consolidate the recovery, it is necessary to improve the conditions for the creation of companies and for the development of their activity, and not to burden innovative, dynamic and efficient companies with the taxes of inefficient ones. In turn, Torres pointed out that the weaknesses of the recovery are to be found in an unsustainable increase in public debt, in the fact that the economic factors that explain it are, to a large extent, cyclical; in the political cycle that has boosted spending by local councils and autonomous communities; in the fall in wages and in a new model of labour relations that, in his opinion, represents a very significant loss of welfare. He also considers that the recovery could be threatened by an adverse international environment, especially in view of the situation in China, and by the institutional problems that Spain is suffering. What is the recipe of these experts for overcoming the crisis? For Lacalle, what needs to be done is to make it easier for companies to increase in size, to reduce the Spanish economy's excessive dependence on banks for financing and to ensure that fiscal policy does not punish those who survive the crisis. Torres, for his part, recommends increasing the weight of the wage bill in overall income, strengthening domestic markets, alleviating household debt, boosting business financing with the creation of public banks, regenerating institutions and opening a debate on European monetary union. For Ontiveros, what is urgent is to let the ECB work and make the budget deficit targets more flexible, and what is important is to promote competitiveness, improve the capital stock as a whole, especially technological capital, ensure that the banking system is well regulated and supervised, improve the culture and attitudes towards business and risk-taking, and reconcile with Europe. <em>This document summarises what was discussed during the meeting held for this purpose at the Foundation. The Rafael del Pino Foundation is not responsible for the comments, opinions or statements made by the people who participate in its activities and which are expressed as a result of their inalienable right to freedom of expression and under their sole responsibility.</em>
The Rafael del Pino Foundation is not responsible for the comments, opinions or statements made by the people who participate in its activities and which are expressed as a result of their inalienable right to freedom of expression and under their sole responsibility. The contents included in the summary of this conference, written for the Rafael del Pino Foundation by Professor Emilio González, are the result of the debates held at the meeting held for this purpose at the Foundation and are the responsibility of the authors.
The Rafael del Pino Foundation is not responsible for any comments, opinions or statements made by third parties. In this respect, the FRP is not obliged to monitor the views expressed by such third parties who participate in its activities and which are expressed as a result of their inalienable right to freedom of expression and under their own responsibility. The contents included in the summary of this conference, written for the Rafael del Pino Foundation by Professor Emilio J. González, are the result of the discussions that took place during the conference organised for this purpose at the Foundation and are the sole responsibility of its authors.
