Should this be confirmed, besides the need for monetary policy to maintain a prolonged, very accommodative stance and for the selective extension of certain ERTE support measures at the national level, an expansion of the support measures for the financing of firms would be advisable, in order to sustain the recovery. In any event, in this second phase of the economic policy response, credit support mechanisms should focus on prioritising access to these funds for firms with  See Banco de España (2020), Annual Report 2019, Box 4.3, “Developments in bank finance for productive activities in the context of the COVID-19 crisis”, and R. Blanco, S. Mayordomo, Á. Menéndez and M. Mulino (2020), Spanish non-financial corporations’ liquidity needs and solvency after the COVID-19 shock, Occasional Paper No 2020, Banco de España. 3  4  sound viability prospects, with a view to providing for the necessary cross-firm and crosssector reallocation of productive resources. Also, it should be acknowledged that the number of financially vulnerable firms will rise significantly as a result of COVID-19. According to analyses by the Banco de España, this increase will be more marked in the SME segment and among firms pursuing activities in the sectors most exposed to COVID-19. An initial factor to be taken into account when assessing the impact of the COVID-19 crisis on the corporate sector’s solvency is the future decline in the return on firms’ assets.
At the same time, persistently high public debt (as will inevitably be generated by this crisis) would reduce the scope for action in response to future adverse shocks, expose the economy to a situation of chronic vulnerability and limit its growth capacity. In this situation, we should accept that the necessary short-term fiscal expansion must be accompanied by an ambitious reform agenda to address the structural challenges facing the Spanish economy and a fiscal consolidation programme, to be implemented as soon as the recovery firms. Without doubt, further analysis and experience will be required before we can draw all the lessons from this crisis. However, we should be aware, in any event, of the unprecedented scale of the collective challenge that we as a society face to return to a path of prosperity and opportunities for all. Hence, once again, I advocate broad-based agreements to shape the urgent, ambitious and comprehensive growth strategy that Spain currently needs. The financial system can and should make a significant contribution in this regard. Thank you for your attention. 17