I KNOW YOU HAVE BEEN BUSY WITH PITCHING TO INVESTORS WHAT TO
DO WITH CAPITAL. I KNOW YOUR GOVERNMENT HAS
SUGGESTED WE NEED TO TRANSITION FROM PANDEMIC TO ENDEMIC, AND
THAT MEANS RESTRICTIONS WILL OPEN UP AND GO BACK TO NORMAL?
NADIA: WHAT IS CLEAR IS OUR SITUATION
IS VERY DIFFERENT FROM THE PREVIOUS TWO YEARS.
THE VACCINATION PROCESS MARKED A TURNING POINT, AND WE ARE IN
THE THICK OF THE OMICRON WAVE, AND THE IMPACT IS DIFFERENT,
AND OUR ABILITY TO KEEP THE ECONOMY GOING IS DIFFERENT.
WE WILL PROBABLY SEE A TRANSITION TO THIS BECOMING AN
ENDEMIC DISEASE, WHICH MEANS WE STOP BEING PRUDENT AND WEARING
MASKS, BUT IT DOES SIGNAL WE SHOULD TAKE MEASURES WHICH ARE
DIFFERENT TO THE ONES WE HAD TO TAKE TWO YEARS AGO.
MARIA: ASSUMING THOSE ARE MORE LENIENT
AND OPEN, WHAT DOES THAT DO TO THE ECONOMIC FORECAST?
THERE WERE DOWNGRADES TO SPAIN'S GDP THAT YOU DISAGREED
WITH. WILL WE SEE UPGRADES THIS YEAR?
NADIA: WHAT WE HAVE SEEN FOR THE LAST
YEAR IS A LOT OF VOLATILITY IN TERMS OF ECONOMIC FORECASTING.
THIS IS A DIFFICULT EXERCISE NORMALLY AND TWICE IS DIFFICULT
WHEN WE ARE IN SUCH A DIFFICULT ENVIRONMENT, ALSO FROM A
GEOPOLITICAL POINT OF VIEW, AND IN TERMS OF THE HEALTH
SITUATION. WE HAVE SEEN IN THE COURSE OF
2021, UPWARDS AND DOWNWARDS REVISIONS.
YESTERDAY THE GOVERNOR OF THE SPANISH CENTRAL BANK SAID THEY
WILL REVISE UPWARDS THERE FORECAST. WE ARE IN AN
ENVIRONMENT THAT REQUIRES US TO BE PRUDENT AND MAKE OUR
DECISIONS, AND LOOKING AT REAL ECONOMY INDICATORS OVER MORE
FREQUENT NATURE, WHICH ARE CLEARLY SIGNALING THAT THE
RECOVERY WAS ACCELERATING IN THE COURSE OF 2021, AND GIVE US
A POSITIVE PROSPECT FOR 2022. MARIA:
THE EARLY INDICATORS THAT A SPAIN ARE PRETTY GOOD, BETTER
THAN EXPECTED. IN A SERVICE ECONOMY WHERE
INFLATION IS STILL HIGH AND ELECTRICITY PRICES ARE JUMPING,
YOU SUBSIDIZED SOME BILLS, BUT DO YOU WORRY THAT WILL REMOVE
SOME MOMENTUM? NADIA: THE AVERAGE INFLATION RATE LAST
YEAR WAS AROUND 3%. WE STARTED 2021 WITH 0%.
THE EXPECTATIONS TO A SHARP DECLINE IN THE SECOND PART OF
THE YEAR. I'M MORE CONCERNED ABOUT THE
UNDERLYING CAUSES OF THE PRICE SPIKES, BECAUSE HAVING A PRICE
REBOUND IS NOT SO SURPRISING WHEN WE HAVE A STRONG ECONOMIC
RECOVERY AFTER SUCH A RECESSION. I'M MORE CONCERNED ABOUT
BOTTLENECKS AND INTERNATIONAL SUPPLY CHAINS, AND ENERGY
PRICES. MFRANCINE:
HOW CONCERNED ARE YOU THEY WILL LAST THROUGH THE NEXT 12 MONTHS?
WHAT HAPPENS TO THE SUPPLY CHAINS, AND WHAT CAN WE DO
ABOUT ELEVATED ENERGY PRICES? NADIA: HAPPY NEW YEAR.
I THINK FORECASTING INSTITUTIONS AND LARGE
INTERNATIONAL SUPPLIERS AND LOGISTICS OPERATORS EXPECT THE
SITUATION PROGRESSIVELY WILL NORMALIZE IN THE COURSE OF THE
YEAR IN TERMS OF THE INTERNATIONAL SUPPLY CHAIN.
IN PARTICULAR IN THE AREA OF SEMICONDUCTORS, WHICH IS KEY TO
SOME KEY MANUFACTURERS LIKE THE AUTO SECTOR.
I'M MORE CONCERNED ABOUT ENERGY PRICES BECAUSE OF THE MANY
GEOPOLITICAL FACTORS DRIVING THEM UP, AND CREATING
UNCERTAINTIES. THAT IS WHY SINCE LAST SUMMER
WE HAVE BEEN PRESSING THE EU TO TAKE MEASURES AND TRY TO ENSURE
WE HAVE A STRONGER BARGAINING POWER WHEN NEGOTIATING WITH
LARGE GAS SUPPLIERS, AND OUR MARKET REGULATION SERVES A
PURPOSE. TOM:
INFLATION, AND THE ECB AND CHRISTINE LAGARDE HAVE TO WEIGH
UP, WE ARE NOT CLOSE TO NORMALIZATION WITH POLICY AND
THE EURO ZONE. THE TIME WILL SURELY COME, AND
THEY ARE ENDING THE PEP PROGRAM IN MARCH.
ARE YOU CONCERNED ABOUT DEMAND FOR SPANISH BONDS? NADIA: NO.
FOR THE LAST YEARS WE HAVE SEEN GROWING CONFIDENCE IN THE
SPANISH ECONOMY. IN THE LAST YEAR WE IMPROVED
OUR LONG-TERM SUSTAINABILITY.
OUR INTEREST RATE TO GDP RATIO IS BELOW 2%, AROUND 1.6%.
WE HAVE BEEN ABLE TO EXTEND THE MATURITY BEYOND EIGHT YEARS,
AND THE SCENARIO WE ARE WORKING ON IS ONE WHERE WE WILL
CONTINUE TO IMPROVE LONG-TERM SUSTAINABILITY IN THE COURSE OF
2022, EVEN IN A SCENARIO OF PROGRESSIVE NORMALIZATION OF
POLICY, WE DO NOT EXPECT PUBLIC STATEMENTS BY THE ECB, AND THAT
IS CONSISTENT WITH THE INFLATION FORECAST.
WE ARE PREPARED FOR AN ALTERNATIVE SCENARIO, OF COURSE.
MARIA: WHAT DOES IT MEAN WHEN YOU SAY
YOU ARE PREPARED FOR ANOTHER SCENARIO? NADIA:
EVEN UNDER A SCENARIO OF NORMALIZATION OF MONETARY
POLICY, AND VIEW OF THE MATURITY OF SPANISH SOVEREIGN
DEBT, WE ARE EXPECTING THE SITUATION TO CONTINUE TO BE
IMPROVING OVER 2022. IN THE LAST YEARS WE SAW AN
IMPROVEMENT IN THE LONG-TERM SUSTAINABILITY OF IT.
-- OF PUBLIC DEBT. MARIA: SPAIN WAS THE FIRST COUNTRY TO
RECEIVE MONEY FROM EUROPE. ANALYSTS SAY THIS IS DUE TO THE
COMPETITION WITH ITALY.
WHAT DO YOU THINK OF THE SECOND PAYMENT? NADIA:
I THINK WE ARE NOT COMPETING WITH ANYBODY IN THESE MATTERS.
THE STAKES ARE VERY HIGH.
THE AMOUNT OF MONEY, THE 140 BILLION THAT COULD BE MOBILIZED
IN PUBLIC INVESTMENT BETWEEN NOW AND 2026 IS UNPRECEDENTED.
IT EQUALS MORE OR LESS WHAT SPAIN HAS RECEIVED IN TRANSFERS
SINCE WE JOINED THE EU.
THIS IS A UNIQUE ONCE-IN-A-LIFETIME, ONCE IN
HISTORY OPPORTUNITY FOR THE COUNTRY TO UNDERTAKE AN
AMBITIOUS INVESTMENT IN REFORM PROGRAM.
WE HAVE EVERY INTEREST IN PRESSING AHEAD, AND THAT IS
WHAT WE HAVE BEEN DOING SINCE DAY ONE.
WE ACCELERATED THE EXECUTION OF THE INVESTMENT PROGRAM IN THE
SECOND HALF OF LAST YEAR WHEN THE PLAN WAS APPROVED BY THE
EUROPEAN INSTITUTIONS.
WE ARE GOING TO REACH CRUISING SPEED IN 2022, AND WE PRESSED
AHEAD WITH IMPORTANT STRUCTURAL REFORMS, INCLUDING LABOR MARKET
REFORM WHICH WAS ADOPTED IN THE LAST MINISTERIAL MEETING OF
LAST YEAR. MARIA:
IT IS STILL LOANS, YOU WANT THE FULL PACKAGE, THAT HAS NOT
CHANGED? NADIA: YES, OF COURSE.
WE STARTED WITH THE GRANTS, AND WE ARE WAITING FOR THE FINAL
ALLOCATION OF MONEY TO START REQUESTING THE LOANS BETWEEN
NOW AND 2026.