Large companies called for political stability and transformation of the production model in Spain from the La Toja Forum

These are some of the topics covered in this colloquium titled ‘An agenda for Spain’, led by an IE Business School professor. Paloma Baena and here is the president of Abanca, Juan Carlos Escort; CEO of Iberdrola Spain, Mario Ruiz-Tagle; CEO of IAG Group, Luis Gallego; and president of Deloitte Spain, Hector Florez.

Baena was at Illa da Toxa in O Grove, right where the PP leader Alberto Núñez Feijoo, It faces a second investment vote in Congress that will likely fail.

At the international level, the former OECD Director talked about the ongoing “uncertainty” in the economy due to factors such as the previous financial crisis, the Covid-19 epidemic and the war in Ukraine. In fact, most of the “black swans” that have hit global stock markets over the past century have occurred “in the last decade.”

In this context, Abanca warned the president that Spain “shows a clear difficulty in transforming its production model.” According to the figures provided, following the Covid crisis, the country suffered a 14 percent loss of productivity compared to the European average, and the sector’s weight in GDP is now “only 15 percent”, five points less than 15 years ago. when the ensemble average is 20%.

The “necessary transformation of the production model” that Escotet speaks of requires European “leadership and momentum”; However, without rejecting Europeanism, on the contrary, he warned against Europeanism. the risk of becoming “too Eurocentric” and “Neglecting Spain’s allies Latin America. The US and China are in a “better position” in this area.

Regarding the Spanish banking sector, the Abanca president said that “interestingly, in the last 10 years” it has become the sector “with the greatest convergence with Europe”, from a “significant part” of the banking sector a decade ago. these entities received aid from Europe.

Escotet emphasized that this depends on the efforts made by the industry, for example “Reducing industry oversizing“, resulting in thousands of office closures and a reduction of 112,500 jobs.

Bank tax “bad example”

However, the head Abanca Called for progress towards a single European marketbut this also includes ending “significant differences” in local regulations. He added that the biggest “bad example” of this was the “misnamed capital tax on banks” promoted by central government.

This is a “serious tax increase” that, as he criticized, “not only penalizes access to other markets” but also “penalizes credit and competitiveness” relative to other European states and affects “legal security for investors”.

Deloitte’s counterpart in Spain highlighted that the country has “pioneering companies” that are “heavily invested in its transformation”, although they are concentrated in sectors that “do not represent the global nature of the country”.

According to Héctor Flórez, Spain has a “less intensive model in innovation and technology” and therefore “with lower productivity and long-term growth potential”. In this context, it will be necessary to “double the growth potential” of Spain in the next decade, which will require a “forced transformation” in the economic model: “If we grow faster and better, other problems will be more manageable.”

Deloitte’s president then listed three challenges: “address the structural productivity gap“reforms supporting business transformation in the public sector; an “increasing drive” towards more valuable economic activities, exemplified by the hotel sector; and “dependence on energy, food and defense”, with a strengthening of “commitment to strategic sectors”.

“This is where Spain can be a solution,” he concluded, without neglecting to mention the opportunities provided by the European ‘Next Generation’ funds.

CEO of IAG Group, parent company of airlines such as British Airways, Iberia and Vueling, Transformation in tourism after the Covid crisisa sector that has been “mistaken to the downside” in its recovery prospects: “Travel has become a priority.”

However, Luis Gallego noted “very strong uncertainty” about “how long this strong demand will last.”

ecological transition

The CEO of Iberdrola Spain focused on the ecological transition in the face of the global crisis. risk of “arriving late” climate changeAlthough in this regard the country is in a “consolidated position”.

“There are opportunities to realize the transformations that Spain needs,” Ruiz-Tagle insisted, but this requires progress on “political compromise” and “structural reforms.” The energy transition and renewable energy should be a “lever for growth” in this area.

Moreover, the energy commissioner fears high tax burdens and demands to follow the example of the United States, which “first encourages you, then controls you” in terms of public support. He also requested a shorter delay in processing European funds.

In terms of sustainability, aviation is, as the IAG Group CEO explains, “Opportunity to lead production of the vehicle called SAF (sustainable fuels). Although there is a commitment that all aircraft will use this energy source by 2030, “today we only have a 25% guarantee,” he warned.

After a while, Gallego thought, “Aviation will either be decarbonized or there will be no aviation.”

The ‘war’ of digitalization

In his second intervention, the Abanca President advocated a solution proposal. New momentum for R&D&D SpainWith 2020 and 2021 data, these investments represent 1.4% of GDP, while in Europe this rate is 2% and in the United States this figure is almost double.

Warning that “We are clearly losing the digitalization war,” Juan Carlos Escotet pointed out that the banking sector should provide “support” in this process.

On sustainability, Abanca’s president confirmed this commitment, but refuses to turn the financial sector into a “green gendarmerie” because, in his view, the role “imposed” on banks is too demanding and “does not match” with that of other areas.

He therefore brushed aside the complex legislation in this area: ““It needs to be more progressive.”