Availing myself of my recent council member status, I would say that the guiding principle should be to avoid becoming complacent and, on the contrary, to harness the economic expansion so as to adopt the measures that may provide for sustainable growth, a greater degree of stability and more extensive room for manoeuvre in the face of potential future crises. This advice stems from a diagnosis that is worth emphasising: the Spanish economy still has significant factors of vulnerability. These include most notably high external debt, a level of public debt close to its historical high, an unemployment rate double that of our European partners and a financial system facing considerable challenges; and this in a scenario where the economy must face the impact of the phenomenon of population ageing and the structural problem of low productivity. It is further worth recalling that, although the recovery has rested on a diverse set of measures, in Spain and in Europe alike, it has also been underpinned by the support afforded by the European Central Bank’s extraordinarily expansionary monetary policy. Additionally, this expansion has been accompanied by a significant fiscal impulse in recent years. However, the effect of these monetary and fiscal impulses will tend gradually to fade in the coming years. Against this background it is necessary, firstly, to deepen the fiscal consolidation process.
The basis for establishing new businesses has not been as favourable as in Kongsberg, but there are now at last signs that the situation is improving. Kongsberg Våpenfabrikk was wholly state-owned. This was widely perceived as a guarantee for continued operations. The company repeatedly required state capital injections following unfavourable results. When the government allowed the company to fail, this also represented an important choice with regard to state ownership policy. Profit requirements bolstered discipline in the fledgling companies. At the same time, when the original company was split up, competencies and values became visible. The state still has extensive ownership interests in Norwegian business and industry, but it has adopted a completely different approach to the management of its interests following the experience in Kongsberg, Mo i Rana, Sulitjelma and Syd-Varanger. Corporate governance is now exercised through resolutions in general meetings and according to recommendations from nominating committees, and the board and management can run companies with the objective of increasing value. The state-  6  BIS Review 10/2006  owned companies are subject to exactly the same market discipline as other operators, with a required return and continuous adaptation and development. This is also the only way companies can avoid stagnation. Through the Government Pension Fund, the state owns equities worth more than NOK 500 billion, spread across nearly 3 500 companies in over 30 countries. The holdings are minority interests.