But in Spain, regardless of the political party in power, the pro-European approach is guaranteed, even when you look at the two extremes, Vox and Podemos. They don’t question the euro. Maybe they have different approaches regarding fiscal policy, but they don’t say they want to leave the euro. No, not at all. In fact, when you look at credit default swap (CDS) markets, the implied probability of Spain leaving the euro is very, very low. In the case of Italy, it is not very low. Is it possible, then, that part of the spread between Bonos and BTPs is due to that redenomination concern for Italy? Again, it’s not a matter of making comparisons between countries. In the case of Spain, the main reforms were labour market reforms and cleaning up the banks. Those are the drivers of Spain’s good performance, in my view. And those are the elements that have to be maintained over the coming years. De Nederlandsche Bank President Klaas Knot recently said that divergence among euro area countries is making it increasingly difficult to set a single monetary policy that fits all of them. He expressed concerns about the sustainability of ever-diverging trends. Would you agree with him? There are no ever-diverging trends. There is the concrete case of Italy, which is underperforming. But six or seven years ago the underperformers were Spain, Greece and Ireland, and now they are overperformers. It’s changed quite a lot.
The government’s planned infrastructure projects in the areas of road development, port and airport development, power generation and social infrastructure development, would also facilitate sustainable and broad-based growth. The external sector is expected to perform well in 2007 recording an overall balance of payments surplus of about US dollars 200 million, boosting the level of official reserves to US dollars 2,650 million or about 3 months of imports. Export growth is expected to continue in 2007 at around 10 per cent, benefiting from continuing high growth in the global economy, and opportunities offered by Free Trade Agreements. Imports are projected to grow at a higher rate of 12 per cent, reflecting increased demand for intermediate and investment goods. The Government’s Medium Term Macro Framework (MTMF) enunciated in the Fiscal Management Report 2007, indicates that the overall deficit in 2007 will be contained at around 7.2 per cent of GDP. To meet this target, adjustments have to be introduced in the areas of enhancing revenue through additional measures and improved tax administration, rationalisation of current expenditure and improvements in the government debt management. Public investment will also need to be maintained at a high level to provide complementary capital for private sector investment. In this background, the growth in Reserve money and Broad money for 2007 will need to be clearly targeted to support the smooth functioning of the economy while preventing the build-up of inflationary pressures and expectations.