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the Esade business school believes that the Spanish economy will end this year with a contraction of more than 10% of its GDP, but that in 2021 will register a growth of between 6% and 7%, “provided that does not go back to live a second episode of confinement as experienced in the spring”. So says in its Report Economic and Financial Esade (July 2020), where it is also predicted an increase in the public deficit above 10% of GDP , and that the public debt will be higher than the 115% by the end of 2020.

For Esade, the recession of the Spanish economy “will be higher than in other countries” due to its nature, which is oriented towards services that require a social contact high and “will be more affected during more time”, and the Spanish business fabric, “which is home to a large percentage of small or very small firms and will require specific measures of funding”.

Their forecast, which envisages a deficit of over 10%, and a debt of 115% of GDP in 2020, are conditioned by the evolution of the pandemic, has explained the director of the report, Jose Ignacio Conde-Ruiz, since may experience changes in case of a new confinement, or the discovery of a vaccine or effective treatment.

“The crisis is going to be harder in Spain than in other european countries, has pointed out, because of its model of growth-oriented tourism, catering, leisure and transport , its business fabric formed mainly by smes, the labour market precarious and dual with a high percentage of temporary workers and their lower fiscal capacity.

it Is important to “deshibernar the economy, and make a bridge between prepandemia and postpandemia,” said Conde-Ruiz, who has been considered that the desescalada of FATE should have encouraged more output from workers and introduced more flexibility to the time to return them if necessary.

“you should Not force to go out, because you can generate insolvency in the companies, but provide generous incentives to not be afraid to do so, and with total flexibility to re-enter,” he added. Conde-Ruiz believes that, sooner or later the Government will have to address the solvency issues in business , providing measures of debt restructuring, raising public-private partnerships and facilitating mergers, but protecting the single market.

Incentives for the employment

According to the authors of the analysis of conjuncture of the Economic and Financial Report of Esade, the recovery will depend on the correct desescalada of the Temporary layoff of Employment (ERTE), to the suggest a scheme, flexible employment incentives , in order to avoid that they become in ERE (or layoffs).

Also consider that it will depend on the specific aid to sectors that are most affected, and that in some cases will require the activation of the application; the credit so that the lack of liquidity of the firms did not result in a lack of solvency and of the future European Fund for Economic Recovery.

In his opinion, this fund is intended to protect the european single market, and compensate those countries with less fiscal space so that they can compete in equality of conditions in the euro zone. This reinforcement should arrive mainly via transfers, not credit, for that does not end up impacting on the debt and public finances, which will be subject to a significant stress in coming years.