While Cataluña plays around with an unfeasible independence, Spain is gradually becoming Europe’s tiger economy.
It caught my attention last Wednesday to hear from Monica Oriol, president of the pro-business lobby Círculo de Empresarios, that Spain is becoming Europe’s tiger economy. Oriol represents the interests of more than 200 Spanish businesses accounting for around 15 percent of our GDP, and thus her words should be assessed having this in mind. However, she chose a timely expression in a week characterized by positive signs for Spain.
That same Wednesday, French automaker Renault announced that is looking to hire 1,300 workers for its four plants in Spain following a new deal with local unions. This bit of news highlights the relative strength of our country’s automobile sector compared to those of other European economies. Furthermore, it underscores our growing competitive advantage within the European region.
This latter assertion is vindicated by Simon Nixon, a journalist with the Wall Street Journal in London. He acknowledged in an article this week that Spain is making more progress in tackling its problems than is sometimes recognized. Read with pleasure Nixon’s narrative:
Export growth has been a major surprise, matching Germany throughout the crisis, while imports have fallen rapidly; the balance of payments was in surplus in September. The flip-side of cripplingly high unemployment is that unit labor costs are falling fast, competitiveness is being restored and productivity is improving, vital to future growth. There are signs structural overhauls are working, particularly in the labor market, with individual firms successfully cutting deals with unions. And the latest bank clean-up program — the fourth since Mr. Rajoy took office less than a year ago — will lead to about 40 billion euros of new equity being injected into the system, the creation of a 90 billion euro bad bank and substantial branch closures when details of the next phase of the plan are announced this month.
The financial Anglo-Saxon press is now giving us some credit while knocking on France’s door to address its structural inefficiencies. I will not write about that today. But it reminds me of a recent experience I had with four representatives of a North American company that came on a business trip to Madrid two weeks ago. The company wants to invest in Spain but there are some regulatory uncertainties that it needs to assess beforehand. The goal of their trip was to address these uncertainties with government stakeholders, and I advised them along the way. The experience could not have been more encouraging. Our government and public administration representatives were welcoming, professional, they knew the issues and were willing to collaborate with efficiency and expediency. “Here we talk little and we execute fast,” said a state economist in one of the meetings. Representatives of the company were at awe. The company’s General Director, who happens to be French, said in a thank you email:
This trip has exceeded my expectations at many levels and I was impressed by the professionalism and support of the contacts we met. My main take-away is that we seem to have a path to enter Spain with minimal risk based on the guidance and candid feedback from Spanish authorities. I look forward to preparing our market entry to Spain!
This is certainly the Spain we all want now. Oriol’s characterization of our country is on its way.