Luis de Guindos advocates the need for an integrated European market for goods and services
The integration of the single market for goods and services is a reform of crucial importance for the European Union (EU) explained Luis de Guindos, Vice-President of the European Central Bank (ECB), during his speech at Esade Madrid. “The main difference for an international investor is that the United States is a single jurisdiction with homogeneous rules, whereas here we still have a situation in which the markets for goods and services are not integrated”, he said during his conversation with the director of the Esade Center for Economic Policy, Toni Roldán. “It’s very difficult to integrate capital markets if goods and services markets are not integrated,” he added.
During the ‘Conversations with EsadeEcPol’ series, De Guindos and Roldán addressed the crucial moment facing the euro zone economies in a landscape of unprecedented change.
For the ECB Vice-President, defense is currently the central priority for the EU institutions, as the EU needs to become independent and gain autonomy from the United States in this area. He pointed out that it is not merely about spending more, “but spending in a much more coordinated and better way”. In his opinion, in the long term it will be necessary to create a joint European defense financing instrument, similar to the Next Generation Funds.
Regarding tariffs, De Guindos feels that the agreement between the EU and the United States has managed to avoid a trade war - despite an average increase of 10 points in tariffs - and that the pact yet to be reached between Washington and Beijing in this respect is of worldwide importance.
Housing and productivity: the other side of Spanish growth
In his analysis of Spain’s current economic growth, De Guindos highlighted structural changes such as the strengthening of the financial sector and the increase in competitiveness — with Spain’s improved export position — and noted the positive impact of immigration on the economy.
On the other hand, the ECB Vice-President pointed out a low increase in national per capita GDP, due to the limited rise in productivity per employee, with economic growth driven by the addition of more workers to the workforce.
For De Guindos, the Spanish economic model has a clear bottleneck: “Housing is a problem, and the rental market does not work; there is very strong demand and supply regulation that is not adequate.” According to the former Minister of the Economy, housing is a personal problem but a problem for the economy too because it hinders, for example, job mobility.
As for Spanish politics, De Guindos said that the inability of the two main parties to reach agreements is not positive for the country.
