the truths of a spanish – l’Express leader of the Spanish Medef

Tourism, diversified economy, population growth … Spain has solid assets. But to maintain the rhythm, it needs a private sector capable of investing, which supposes less paperwork and taxes, pleads Iñigo Fernández de Mesa, the vice-president of the Confederación Española de Organizaciones Empresariales (CEOE) , the MEDEF equivalent on the other side of the Pyrenees, also president of the Rothschild & Co business bank in Madrid.

L’Express: Have Spain’s excellent growth figures surprised you?

Iñigo Fernández de Mesa: At the CEOE and the Institute of Economic Studies, we have always been realistic regarding the growth of Spain. We do not think that the economy works like a perfectly oiled machine, but we do not believe that it encounters serious difficulties. For some time, it is true that the Spanish outside sector is doing very well. We record historic figures in tourism, with 95 million visitors, practically two tourists per capita. A trend that has been observed since the covid crisis. Exports of non -tourism services also record good performance. Domains such as engineering, for example, have been very successful. We cannot ignore that public spending has represented 60 % of Spain’s economic growth over the past four years. Another major factor: population growth, up to 1.3 million people in three years.

What risks could nevertheless weigh?

They are first external: geopolitics, customs barriers, Trump policy and the situation in Europe. Then, economic growth cannot be based solely on public expenditure, especially since the public deficit remains very high – it still exceeds 3 % despite strong growth in GDP. Admittedly, household consumption could progress more, because the level of savings is historically high, but for that, it is necessary to give more space to the private sector. As for the investment, it remains lower than the levels before the COVID crisis.

Finally, housing is a crucial issue in Spain, with a number of households that increases at a rate of 200,000 to 250,000 per year, while only 70,000 dwellings are built each year. This imbalance poses a serious problem that could also weigh on growth.

Can current dynamism continue, despite the global economic slowdown?

Spain is the most open economy in Europe and is very competitive. Our exports are strongly diverse, both sectoral and geographic. We sell almost everything: automobile components – a capital sector -, equipment, chemicals, pharmaceuticals and non -tourist services.

In addition, we do not depend only on the United States and China – the weight of these two countries is less than in other European countries. Of course, Germany and France are our main business partners, and if their economy slows down, Spain will inevitably suffer the consequences. Indirectly, therefore, we will feel the impact of the global situation. But directly, our economy has a great resilience capacity thanks to its diversification. I will add that in Spain, the debt of companies is lower than in other countries, which gives them more room for maneuver in the face of an increase in interest rates.

What are the expectations of Spanish companies today?

They aspire to more political stability, a need shared throughout Europe. On the legal level, the rules of the game should not change permanently. We also need a lighter taxation, because if the United States is implementing major tax reductions for businesses, we risk seeing European companies lose competitiveness.

In Spain, the tax burden has increased considerably in recent years. About 80 % of this increase has weighed on businesses. For us, taxation is an essential lever to encourage greater investment dynamics, which remains one of the major challenges of our economy. Administrative simplification is also a subject. Many companies, especially SMEs, encounter great difficulties due to bureaucracy.

Does the government support companies sufficiently?

We do not think that the private sector needs subsidies, but rather adequate regulations. In Spain, there are a multitude of different rules depending on the autonomous communities. We should move towards a real internal market in Spain and in the European Union, in accordance with the recommendations of the Draghi report.

The main thing is that the government establishes clear and simple rules, as well as a tax system favorable to businesses. These, for their part, will take care of investing and generating profits. It is counterproductive to modify the labor regulations each year, to vary the taxation permanently or to impose too heavy a tax pressure.

What are the levers to modify the rules and facilitate investment?

At European level, the Draghi report pleads for strengthening the domestic market. In Europe, there is still a lot to do in terms of R&D and in the banking, defense, energy and telecommunications sectors. In Spain, certain autonomous communities led by the People’s Party [droite] have launched initiatives to guarantee the unit of the market. If a standard is valid in an autonomous community, it should be everywhere else. This would greatly simplify the regulations. It is also fundamental to improve the efficiency of public spending. It is not a question of reducing public services, but of offering the same services, even better, at a lower cost thanks to more efficient management.

In what sectors should Spanish companies still develop? Artificial intelligence, for example?

Spain has launched certain public initiatives in artificial intelligence, but in general, it remains, like Europe, late compared to the United States and China in this area. The key is not so much a national action as a European strategy that values ​​talent and investment capacity of the continent.

Could Spain bring out European champions? Should it encourage more business mergers?

90 % of Spanish companies are SMEs and VSEs. However, we are starting to see larger companies emerging in sectors such as the food industry, pharmacy and cosmetics. For example, the company Puig [NDLR : maison mère de Paco Rabanne et Jean-Paul Gaultier] has recently returned to the stock market. It is essential to implement policies that encourage business growth. Do not be afraid of pan -European consolidation. In the banking sector, for example, it would be beneficial.

Does Spain have the potential to become one of the main European economies?

It has a clean and inexpensive energy source, as well as leading companies on this market, both in renewable energy production and in the manufacture of equipment for the sector. With the Nordic States, we are the country of Europe where energy is the most affordable and clean.

Then, Spain has a 4G and 5G infrastructure on a global scale and benefits from a privileged geostrategic position. Important data transmission cables connect the country to America, Asia and Africa. This makes it a very attractive destination for investing in data centers, a sector which currently arouses great interest and where many projects are in development.

Finally, the country is also a reference destination for tourism and retirement. In a world where the population is aging, it has leading infrastructure, advanced health services and a quality leisure offer, making it a privileged place for visitors and investors. For all these reasons, Spain has the potential to become a leader in Europe.

More and more French companies are investing in Spain. How do you see this evolution?

It is a very good thing, just as it is important that their Spanish counterparts can do the same in France and in similar conditions. Bilateral investment is essential. Moreover, at the CEOE, we have excellent relations with MEDEF, and the annual meetings between our two organizations favor these exchanges.