Defender of free enterprise and the freedom of corporate choices, the president of the Spanish Confederation of Small and Medium Enterprises (Cepyme) is skeptical of using the minimum interprofessional wage as a social policy. He warns that the country risks losing competitiveness, forecasts tough times for SMEs, and expresses concern about equality among Spaniards and about the separation of powers.
What is the stance on the government’s proposal to raise the minimum interprofessional wage? How would it impact the economy?
SMI should not be treated as a social policy. It is a benchmark. In Spain, there are 46 provinces where the SMI exceeds the regional average salary for SMEs. In fact, for SMEs, the SMI already accounts for about 70 percent of the typical regional pay. This creates a serious competitiveness gap. The government seems to blur the line between social policy and an economic indicator. The best social policy is employment itself, not decreeing wage increases from above. Intervening in the market makes it hard for SMEs to sustain further rises in the minimum wage.
Is the competition problem amplified by applying the same SMI nationwide, without regional or sectoral adjustments?
The minimum wage is not the same as the salaries in Madrid or Barcelona. Over the past five years, productivity in Spain has fallen by 3.8 percent. Countries like Ireland increased wages by 25 percent, while Portugal, with a social democratic government that values business and competitiveness, boosted productivity by 4.6 percent in the same period.
What would be an appropriate placement for the SMI?
This topic is not productive. Inflation should reflect productivity, employment, and the overall economic situation since the SMI is just an indicator. If some regions cannot reach certain levels, social policies must come into play. Intervening in wages would be an intervention in the economic system, and it would undermine more than 4,500 regional and sectoral collective bargaining agreements that determine pay in different contexts.
In this case, collective bargaining could be seriously damaged.
When discussing social dialogue, the government appears to sidestep it. Proposals like reducing the working day to 37.5 hours disregard sector and regional differences. Will working hours be cut by decree? The social dialogue framework should guide such changes. The peace achieved through social dialogue has set a global example. In the 1970s, strikes cost hundreds of millions of hours, while in 2018 the figure dropped dramatically.
Productivity fell 3.8% over five years. It rose 4.6% in Portugal
This issue also reveals tensions within the government.
Now subsidies and baskets are at play. An open conflict exists between factions within the administration. There is agreement with the Ministry of Economy that Sepe needs reform. What qualifies as regulation, and why rely more on subsidies? The path to employment should be about creating jobs, not expanding the subsidy regime. Spain should help its companies grow, not shelter them from competition. Many firms, especially smaller ones, lag behind the European average. If the average European company size is approached, around 1.2 million new jobs could emerge, potentially boosting GDP by about 5 percent and lifting incomes by more than 20 billion. A hundred obstacles to growth have been cataloged, and tackling them is critical.
All of this can also be seen in the realm of social contributions that directly affect employment.
Yes, completely. In recent years, social contribution bases have climbed by about 50 percent on the low end and around 20 percent at the top. This makes the business environment less competitive. A recent study from the Institute for Economic Research indicates labor costs have risen about 17 percent while productivity is sliding. Without reform, competitiveness will erode, and weaker firms will be pushed out of the market.
Is this scenario survivable for SMEs in the current panorama?
The measures in place do not yield immediate results. What is sown today may bear fruit years later. Over time, small and medium-sized Spanish firms face greater exposure, risking reduced competitiveness. A decisive choice is necessary: either back the enterprise or brace for a very difficult period.
The communist wing of the government thinks only public companies are possible
Experts note that European funds lean heavily toward the public sector.
SMEs feel the funds do not reach them. There is a perception that the last-mile coverage is only a fraction of what is promised.
Is the lack of funds solely due to management inefficiencies?
Multiple factors converge. A centralized design at the highest level created hurdles for SMEs: complicated access to funds, tight deadlines, programs that are too specific, and, most often, a failure to identify SMEs because small and medium-sized firms lack dedicated administrative, legal, and financial departments. The biggest problem remains co-financing. The SME had to fund a large share of investments while Europe contributed the remainder, a burden that many Spanish firms could not shoulder. Efforts are underway to fix this with the government.
You asked which of the 100 growth obstacles deserve the most attention.
One striking point mentioned by the Bank of Spain is the 50-employee threshold. When a company grows from 49 to 50 workers, new liabilities emerge—unions, labor measures, invoicing complexities, and new benefits. The Bank of Spain notes that once a firm hits 50 employees, growth tends to slow significantly.
We are determined not to be a competitive country and to push companies out of the market
How is this legislature envisioned?
The government shows clear ideological differences, making long-term structural policy hard to approve. The concern is that the rule of law and the equality of Spaniards could be put at risk. There is talk of catalyzing a return of companies that relocated to Catalonia, but without certainty and stability, reinvestment becomes unlikely. The safest environment for business is essential if firms are to return.
Why is there ongoing pressure against business people? Is this a softening trend?
The focus has shifted from business leaders to broader debates about assignments and agreements. Yet it should not be forgotten that in recent months both firms and their leaders faced scrutiny. If progress is to be made, the current approach should stop targeting individuals and start building a healthier climate for enterprise.
Will Catalonia’s debt forgiveness affect activity?
Equality among Spaniards wherever they reside must be respected. If the principle of equal treatment and the separation of powers is endangered, the system becomes unstable. Beyond that there is the debt question. Casting forgiveness as a universal solution invites questions about who bears the cost.
Are there any public or private bodies currently advising against investing in Spain?
Some investment funds classify Spain as non-investable. The Spanish brand could suffer, but the more troubling issue is that investments often stay on the shelf because the regulatory environment shifts daily.
Is there a debate about greater state involvement in company capital?
The belief remains in free competition and private initiative as the engine of progress. Interventionism may appear appealing to some, but the broader view prefers a balance where public activity supports private enterprise and the welfare state without crowding it out. The objective is a thriving private sector capable of funding the welfare system.
There is also a new European rule that shortens payment terms.
Late payments are a serious problem for Spain, with SMEs financing roughly 2.4 billion euros of commercial debt. This money should be directed toward innovation, digitization, and wage improvements. The typical payment period has lengthened and now exceeds 82 days. Addressing this is a clear priority before it festers into a larger issue.