Bilbao (EFE).- The Minister of Economy and Finance of the Basque Government, Pedro Azpiazu, has sent a message of “tranquility” in the face of the “turbulence” that is taking place in international banking and on the stock markets and has opined that the ” financial system in Europe is quite solid”.
Azpiazu gave a conference entitled “The Basque economy in times of uncertainty” within the framework of “Los viernes de la Cámara de Comercio de Bilbao”.
In it he referred to the “drums of a new financial crisis” and was questioned about the situation of Deutsche Bank.
This bank has announced that it plans to amortize 1,500 million dollars of subordinated debt on May 24, before its maturity in 2028, which has caused the collapse of its shares and has also generated a day of bulging falls in the large stock market. European banks.
The counselor has recognized that in the financial world “there may be this type of turbulence” that is transmitted “quickly” because “panic is quickly transmittable”, but he has assured that the “financial system in Europe is quite solid”.
Azpiazu has opined that he does not believe that these “transmissions” are going to continue in such a way that a “crisis” is generated.
“Euro area banks have in principle demonstrated their resilience to severe and adverse macroeconomic shocks” in recent years “unlike what happened during the 2008 global financial crisis,” he added.
However, it has called for the implementation “without further delay” of pending reforms, such as the constitution of the European deposit guarantee fund and the digital euro.
Azpiazu has also opined that it is an “error to apply a restrictive monetary policy to tackle a problem of supply inflation.”
“An inappropriate use of the restrictive monetary policy can generate more harm than benefits”, in reference to the decision of the European Central Bank to raise interest rates, he said.
“We have already seen that the rapid rise in interest rates has put pressure on the financial system,” he concluded.
basque economy
The counselor has also referred to the evolution of the Basque economy. He has affirmed that the “rise in consumer prices will moderate from March” and that the Basque economy is expected to begin an “acceleration process during the second half” of this year.
Azpiazu recalled the economic forecasts for this year updated by the regional Executive last week in which the growth of the Basque Country’s GDP was lowered to 1.5%, 6 tenths less than estimated up to now, and an increase of 2 was set .1% by 2024.
He has recognized that inflation is one of the main determining factors at the present time but has assured that “it is to be expected that in March” the CPI “returns to the downward path” after the increase registered in February when it stood at 5.8% .
“The rise in consumer prices will moderate from March and this will allow for a recovery in family consumption in the second half of the year,” he stated.
Azpiazu has valued the “solidity” that the labor market continues to show at the beginning of the year, a fact that together with the “improvement in the expectations of households and companies since November”, and the fiscal aid against the energy crisis will represent support for the claim.
On the supply side, he stressed that it is being relieved by a “dense in energy prices.”
“All of this leads us to expect a less pronounced economic slowdown than was feared a few months ago” and “it is resulting in a generalized upward revision of the activity forecasts for the current year”, he said.
Thus, regarding the “expected evolution” in the remainder of 2023, Azpiazu has stated that the Basque economy is expected to maintain the “deceleration registered throughout 2022” but “will begin an acceleration process during the second half of the present anus”.
Azpiazu has insisted on the need for prudence in the face of the current economic “uncertainty” but has sent a message of “optimism”.
“Not all are shadows that can hinder growth,” he summarized.
European funds
The counselor has indicated that this year the European funds will begin to reach the socioeconomic fabric that represent the “greatest fiscal stimulus ever launched in the Basque Country” and will help to “compensate” the effects of the possible negative contingencies that lie in wait for the Basque economy.
“We are doing everything possible so that the impact of these funds in the Basque Country is as great as possible”, he assured.
He added that this year is a “key, critical and very important moment” for all business agents.
“We have to keep the tension in the fund execution processes firm” and, “companies and all kinds of agents have to fine-tune their projects and make the most of fundraising opportunities”, has underlined.
He has indicated that the Basque Country has absorbed a total of 1,568 million euros of these funds but that so far only a “very small part” has been distributed. EFE
