"Public sector workers are highly likely be asked to work the same hours for slightly less salary, but this mustn't impair the quality of public services", announced Andreu Mas-Colell, Minister of Economy and Knowledge of Catalunya, at the latest Matins ESADE session, sponsored by Ernst&Young and La Vanguardia.
On this note, he pointed out that it is a question of increasing productivity by adding a few more minutes to the working day or reducing vacation days. "They are marginal austerity measures. If civil servants work 10 or 15 minutes more a day, public services will have the same quality, the only difference will be that real wages will have decreased slightly", explained Mas-Colell. He also added that "these are measures to help maintain the public sector and guarantee jobs".
The minister reiterated that the upshot will be a reduction in real wages, so "the same will happen to civil servants as has happened to the majority of other workers in our country". In his opinion, "stability and budgetary balance are totally separate factors if you are in favour of a more or less reduced public sector".
Saving banks stress tests
As for the bank stress tests that will be published today, the Catalan Minister of Economy and Knowledge considers that "the results will not be fair on Spain". He aired his criticism of these tests, as he believes they do not contemplate dynamic provisioning, a mechanism that, he recalled, was applauded by international institutions three years ago. "This may impact the results of some savings banks", he warned.
However, he appealed for calm, stressing that "if an institution does not pass the test due to dynamic provisioning not being calculated, it still deserves all our confidence, because it is a totally unimportant result and means that it is well led and has the same opportunities as those which do pass the test".
Lack of leadership in Europe
Mas-Colell pointed to Germany as the country to provide the leadership Europe is lacking in order to overcome the crisis. "We may not totally like Germany's vision, but it is necessary", he explained.
Meanwhile, he referred to the postponement of the debt crisis summit initially planned for this Friday, and condemned the fact that meetings are called and then called off. In fact, he added that "some of Europe's most important decisions have been made using video conference".
In any case, he warned that "the worst case scenario for Europe would be to head towards a situation of economic compromise due to a lack of decision-making capacities and leadership". "We know who stands in the way, but not who stands at the helm", he highlighted.
Factories offshored due to lack of technology
Mas-Colell described the service sector as a key player in job creation. However, he also pointed out that manufacturing plays an important role, because even though "it doesn't create mass employment, it is the source of high productivity". What's more, he vouched that "we won't get anywhere unless we have highly-productive sectors, and one is a manufacturing industry that is held in great regard".
On this, the minister mentioned the offshoring of certain Catalan factories, such as Derbi and Yamaha, and underlined the future importance of having decision-making and knowledge centres, as well as technology. "The problem with motorbike production is that we don't have the technology. When companies offshore to countries like Italy, it's clear that the problem is not to do with salaries", he explained.
The Catalan Minister of Economy also urged the Spanish government to publish economic data on fiscal balances this autumn, stressing that he would collaborate where necessary to make it comprehensible. On this, he cited the Catalan government's recently-created working commission to analyse Catalunya's fiscal indicators, which met for the first time today. "One of the things on our fiscal pact agenda is to make a list of 6 or 7 variables that help us understand the balances of Catalunya and Spain", he said.
Meanwhile, Mas-Colell admitted that the sovereign debt crisis in Europe is making the Catalan government's search for international funding "more difficult", although it "hasn't changed" the Generalitat's plans. As for the central government approval required to allow Catalunya to go into debt, he firmly believes it will arrive with time. "I have no doubt whatsoever that processes will be adjusted as the weeks go by. We have to be receptive to international markets", he concluded.
The Hon. Sr. Andreu Mas-Colell, Minister of Economy and Knowledge of Generalitat de Catalunya, will feature this new session of Matins ESADE.
Welcome and closing: Miguel Trías (MBA 89), President of ESADE Alumni
Introduction and presentation: Alfons Sauquet (MBA 90), Dean of ESADE and Professor in the Department of Human Resource Management
Conference: Hon. Sr. Andreu Mas-Colell, Minister of Economy and Knowledge of Generalitat de Catalunya
Discussion: Jordi Goula, economics editor at La Vanguardia
Born in Barcelona in 1944, Andreu Mas-Colell studied economics at the University of Barcelona and earned a PhD from the University of Minnesota. He also holds honorary doctorates from the University of Alicante, the University of Toulouse, HEC Paris and the National University of the South (Argentina). He is currently a Professor of Economics at Pompeu Fabra University. Previously, he was a Professor of Economics at Harvard University (1981-1996) and a Professor of Economics and Mathematics at the University of California, Berkeley (1972-1980). In 1997, he was named a foreign associate of the US National Academy of Sciences and a foreign honorary member of the American Economic Association. He has been a Sloan Fellow and a Guggenheim Fellow, as well as a member of the Executive Committee of the International Economic Association, President of the Spanish Economic Association, and President of the European Economic Association (2006). From 2000 to 2003, he served as the Catalan Minister for Universities, Research and the Information Society. He was chosen as a member of the Institute of Catalan Studies in 2005 and became a member of the Spanish Royal Academy of Moral and Political Sciences in 2008. In 2009, he was appointed to the Academia Europaea. He served as Secretary General of the European Research Council (ERC) from July 2009 to August 2010. From 2006 to 2010, he was the President of the Barcelona Graduate School of Economics. He sat on the Advisory Board of the "la Caixa" Research Service and the Executive Board of Círculo de Economía, and he chaired the Scientific Advisory Board of Telefónica I+D. He has received numerous awards, including the King Juan Carlos I Award for Economics (1988) and the Cross of Sant Jordi (2006). He became the Catalan Minister of Economy and Knowledge on 29th December 2010.