Cercle d'Economia questions Madrid's role as "a vacuum cleaner of resources"

BarcelonaIf the financial crisis of some thirteen years ago highlighted Spain's dependence on bricks and mortar, the covid-19 crisis has shown that the only thing that has been done is to change the sector. That is, to become dependent on mass tourism. This is pointed out by the Cercle d'Economia, which in its latest opinion piece criticises that for decades homework is not done. According to the entity, practically the only opportunity to reform the production model now are the European funds, and to take advantage of them requires long-term political consensus, in addition to public-private collaboration and address the debate on the territorial model.

Because, they argue, the proposals they make in this paper are difficult to address if the tension between the centre and the periphery is not eased. And the centre, they say, has to assume its part: "The capital of Madrid cannot act as a vacuum cleaner of resources from the rest of Spain. Failure to assume a conscious position of its role as capital can lead to a strong disaffection in the rest of the country". In fact, they concede that centralisation works against Catalonia, that it is an underfinanced community and that it has been subject to an outdated model of autonomic financing for years. However, they also criticise the effects of the Catalan independence bid, which they believe has monopolised the political debate. "Sovereignism has to put its lights on and understand that its project, if it is viable, will be long-term", they say. And they add: "In the meantime, we have to do politics in Spain". 

The country portrait in this document is devastating: the State, it remarks, has the highest rate of structural unemployment in Europe, an education system that is not adapted to the needs of the real economy, lack of investment in R & D and stagnant productivity. They also point out that politically little has been done to reverse the situation.

"So far our country has taken little advantage of the opportunities offered by European funds, so it is urgent to lay the organisational foundations that are needed for this opportunity to be taken advantage of", says the entity. In this sense, the most imminent goal for the Cercle is to ensure that the industrial sector accounts for 20% of Spain's GDP, and not the 16% it is now. "Although we would still be far from 26% of Germany, this would clearly reverse the trend", they say.

To achieve this, several changes are needed, including not ignoring the aforementioned debate on the territorial model, but also working to ensure that political pacts are made with a reformist and long-term will, or overcoming the mistrust between the public and private spheres that was generated by the corruption associated with the real estate boom and the financing of political parties.

The "great reconstruction" meeting

Beyond this opinion note, the Cercle d'Economia has also formally presented on Friday the 36th edition of its annual meeting. This meeting takes place next week, and is expected to be attended by King Felipe VI; the president of the government, Pedro Sánchez; the Italian prime minister, Mario Draghi, and the Catalan president, Pere Aragonès, in addition to a large group of businessmen from all over the country. The plan of the entity is that this meeting will serve to lay the foundations of what they have called "the great reconstruction".