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21/09/2007 : The Spanish adjustment in EMU: conditions for a soft landing

Brussels, 21 September 2007


The story of Spanish economy since the mid-nineties, thus encompassing the run up to EMU and EMU itself, is one of buoyant growth and remarkable real convergence. The combination of a strong and sustained reduction of the risk premia, a steady appreciation of the real effective exchange rate and a rapid increase in population have been supportive of a demand-based growth model. However, the brilliant performance of the Spanish economy in EMU is dimming and clouds have appeared on the horizon, which would point to a period of adjustment.


Scope of the seminar


Within this context, the seminar aims to discuss on a series of issues referring to the characteristics of the adjustment process and to the way the imbalances of the Spanish economy can be addressed in order to set the conditions for a soft landing. These include the nature of the adjustment, especially its abruptness and speed, and the relevance of other experiences.


The seminar will also look at factors underlying low productivity growth, the external imbalances and the implications of a possible downsizing of the housing sector. Finally, issues related to market-based and policy adjustment mechanisms (labour and product market reforms, role of fiscal and structural policies) will also be discussed.


List of participants


The provisional list of participants includes: Jorge Braga de Macedo (University Nova de Lisboa), Guillermo de la Dehesa (CEPR), Jordi Gual (La Caixa and IESE), Peter Jarrett (OECD), José Luis Malo de Molina (Bank of Spain), Ángel Torres (Ministry of Finances), Ángel Ubide (Tudor Investment Corporation), David Vegara (Ministry of Finances), José Viñals (Bank of Spain), as well as Klaus Regling, Marco Buti, Jürgen Kröger and Carlos Martinez-Mongay from DG ECFIN.


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