The Company in the face of the Spanish Presidency of the EU Council

On May 18, 2023, INCIPE hosted a virtual event titled The Company in the face of the Spanish Presidency of the EU Council. With the participation of Alfredo Bonet, currenly independent advisor, former Secretary of State for Foreign Trade (2010-2012) and former Secretary General of El Circulo de Empresarios (2018-2022). The meeting was introduced by the ambassador and Secretary General of INCIPE, Manuel Alabart. Following Alfredo Bonet’s presentation, a question-and-answer session was moderated by Vicente Garrido, General Director of INCIPE.

Alfredo Bonet began his participation by highlighting the differences between the EU Council in 2010 (the last time Spain held the Presidency of the EU) and the current one, where Spain is set to assume the presidency on July 1, 2023. During this interim period, significant milestones have occurred within the European Union, including the departure of the United Kingdom and the accession of Croatia. Additionally, the position of President of the Council, which did not exist in 2010, now holds the potential to influence the decisions of the countries presiding over the EU. Bonet made it clear that Spain will assume the Presidency during a challenging time, marked by a global economic crisis that has had a severe impact on the global market. He pointed out that countries holding the Presidency have the capacity to influence the EU’s agenda. However, he highlighted the lack of explanatory documents regarding the priorities of the Spanish Presidency in the EU Council, and he acknowledged that this lack of transparency is likely due to the ongoing electoral period in Spain.

Bonet proceeds by asserting that the competitiveness of Spanish entrepreneurs is a widespread concern and is intricately linked to the business environment in which they operate. Merely having access to the international market is not sufficient for success in the global market. European policies exert a significant impact on competitiveness, both directly and indirectly. Moreover, he highlights a series of pertinent issues that will influence the trajectory of business competitiveness and the European economy in the short, medium, and long term. These issues encompass the state aid regime, the potential establishment of a permanent budgetary capacity within the EU to finance strategic investments and macroeconomic stabilization, industrial policy, open strategic autonomy (including relations with Latin America), digital transition, and ecological transition.

Continuing his intervention, Bonet asserts that to ensure the prosperity of companies, it is imperative to enhance the business environment, enabling them to leverage their competitive capacity. This necessitates addressing various factors that impact the competitiveness of the productive model, such as safeguarding democracy, reinforcing institutions to ensure legal security, and ensuring the proper functioning of labor and tax markets.

During the Q&A session, Bonet points out that the internal market is a great success and emphasizes the primacy of the liberal system. He reiterates that competitiveness is affected by granted subsidies and advocates for the restoration of fiscal rules that promote fair competition. In relation to the pandemic, he acknowledges the justification for state intervention, but emphasizes that once the emergency recedes, states should return to normal rules and gradually phase out the protectionist measures implemented during the pandemic.

Regarding Latin America, Bonet highlights the entrepreneurs’ interest in finalizing agreements such as Mercosur, Chile, and Mexico to establish predictable and reliable trade relations. Concerning relations with China, he acknowledges the complexities arising from the rivalry between the United States and China, with the EU caught in the middle. While it is acknowledged that the EU’s interests tend to lean towards the United States, Bonet highlights that China generates significant surpluses for the countries it negotiates with but fails to reciprocate by not opening its markets to imports.

To conclude Bonet dedicates a few words to address the questions raised regarding the impact of the inflationary spiral faced by the European Union, specifically Spain. He explains that inflation inevitably reduces competitiveness, although its impact has been somewhat mitigated due to the widespread nature of the crisis. However, he emphasizes the importance of a prompt recovery to make a difference and have a positive impact on the country’s economy.

Danela Bordones

INCIPE