As I have said on previous occasions, the greatest cause for concern at present should not be predicting exactly when positive quarter-on-quarter growth will resume, but rather determining to what extent the Spanish economy is ready – or not – to move into a long phase of robust growth. During the last upturn, the Spanish economy built up some significant imbalances, such as the excessive weight of real estate activities, a swollen external deficit, a relative loss of competitiveness, and high corporate and household debt. Over the course of the crisis, some of these imbalances have begun to be corrected, but others are still significantly holding back a pickup in growth. With the crisis, these pre-existing structural problems have been compounded by an increase in unemployment to levels far higher than those of any other developed countries and by the sharp deterioration in public finances. These are now undoubtedly the two main problems affecting our economy. To embark on a sustainable economic recovery, the imbalances built up by the Spanish economy before and during the crisis must be reversed. Job destruction must be halted and unemployment absorbed. And, further, an ambitious plan must be devised and set in place to cut the budget deficit, to redress the financial position of the private sector and, in sum, to mitigate all those structural shortcomings that are currently weighing on the recovery and contributing to reducing the growth potential with which our economy will face the new expansionary cycle.
If, on a firm-by-firm basis, workers and managers decide to adjust their conditions to the changes in demand, the highest possible number of firms and jobs can be preserved. Furthermore, by improving productivity in those firms which will perceive the favourable change in the economic environment, the labour reform would enable workers’ wages to be improved and thus increase domestic demand without impairing the competitiveness of the economy. The list of necessary reforms in Spanish labour institutions is very long. But two of them are vital in order to judge the extent of the reform finally undertaken. The one to which most media attention is devoted is the issue of a permanent employment contract that does not deter those businesses which wish to create jobs. Although hiring is important, at this point in time I feel that it is particularly urgent to address the change which has to be made in collective bargaining. At this juncture it is of paramount importance that the trade unions and employers’ associations – which in complicated situations in the past have made telling contributions to the Spanish economy – should now let the workers and entrepreneurs of Spanish firms decide how they can best save their businesses, preserve their jobs and even expand their workforce. Quite another thing is that they may give guidelines or advice to firms in the negotiation of wages and other working conditions.