Calviño says that Spain faces the rate hike from a favorable position

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The first vice-president, Nadia Calviño, has assured that Spain is facing the foreseeable rise in interest rates from a “favorable position”, due to the reduction in the interest burden on the public debt due to the strong economic growth, responsible fiscal policy and low rates.

Calviño’s words during his appearance in committee in Congress, one day before the meeting of the Governing Council of the European Central Bank (ECB), which this Thursday will foreseeably raise its interest rates by half a percentage point, at least, to stop the escalation of inflation, which in August reached 9.1% in the euro area.

The also Minister of Economic Affairs has added that “the downward trend in the interest burden continues both as a percentage of GDP and as a percentage of public revenue”, which, in her opinion, “clearly favors the sustainability of the finances public”.

He has detailed that thanks to the “good” and responsible” management carried out in these years of negative interest rates, it has been possible to have “average maturities of debt greater than eight years” and an average interest rate at historical lows, although He added that we have to wait to see what decisions are made tomorrow.

SPAIN MAINTAINS “STRONG GROWTH”

He stressed that Spain remains on a path of “strong growth” despite the uncertainty, and proof of this is that national and international organizations forecast a growth of 4% in 2022 and 2% in 2023 for the country.

In addition, he wanted to convey the idea that the way out of this crisis is being different from the previous ones, and he has given as an example the speed and strength of the recovery, as well as the strength of employment, investments or the foreign sector, among other indicators.

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One of them, the evolution of the gross domestic product (GDP), which shows “very positive” data in the second quarter of the year, with national demand as the main driver, has detailed the first vice-president, who has also referred to the “excellent behavior” of the labor market, in which “quantity and quality go hand in hand”.

Regarding inflation, he has recognized that it is the main challenge facing the Government, and in fact has highlighted that “Spain is one of the countries with the largest budget invested to protect homes and companies” through “effective measures ” which have managed to reduce the IPC by 3.5 points.

Some measures that have been adopted “with determination and efficiency”, trying to anticipate the scenarios and achieve a fair distribution of the cost of the war, added the minister, while once again considering it “fundamental” to be able to reach a rents.

In his opinion, it is time to reach an agreement on wages and business margins, an agreement that gives certainty to workers, companies and also investors.

TRANSFERS TO COMMUNITIES REACH 18,000 MILLION

The Minister for Economic Affairs wanted to highlight the importance of the Recovery, Transformation and Resilience Plan, whose deployment “is reaching cruising speed”, and proof of this is that a total of 18,000 million euros to finance projects within the scope of its powers.

It has also reported that as of August 31, 2022, the percentage of execution of the authorized budget exceeds 66% of the total budgeted credit, while the committed credit exceeds 53%, while the monthly rhythm of calls is greater than 2,000 millions of euros.

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Regarding the reforms included in the plan, Calviño has insisted that they are fundamental so that they “have a more significant and permanent impact.” He recalled that today the Senate has approved the Business Creation and Growth Bill and that he expects progress in the coming weeks with the Startups Bill and the reform of the University system.

In his second intervention, and to questions from the spokespersons of the groups, he referred to the Strategic Projects for Economic Recovery and Transformation (pertes), and said that their execution is following its planned course, while at the same time assessing the participation of so many companies – large and small – in the first call, which “is a very positive sign”.

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