Carlos Torres Vila: “Public-private collaboration is fundamental to making investment decisions and generating prosperity”
BBVA’s chairman participated this Tuesday in the first edition of the Expansión International Economic Forum, organized by the financial newspaper Expansión and the international forum, the European House-Ambrosetti, in Alcalá de Henares, Madrid. “Public-private collaboration can leverage private initiatives to make investment decisions and generate prosperity,” said Carlos Torres Vila. In this regard, he feels that “the work of the public sector is to attract private investment with appropriate incentive schemes that manage to multiply European funds,” and in this process, “banks can play a key role” to channel the funds, analyze the projects being financed and strengthen their effect on the economy with their financing.
Carlos Torres Vila participated in the first session of the event, focused on the challenges, opportunities and implications in the post-COVID-19 era for companies and societies. José María Aznar (chairman of FAES; former Prime Minister of Spain), Pablo Hernández de Cos (governor of the Bank of Spain), Josep Piqué (economist, former Minister of Science and Technology, Foreign Affairs and Industry) and Valerio De Molli (CEO de The European House-Ambrosetti) also participated in the debate.
The chairman maintains that structural reforms that the Spanish economy needs - like education or reducing temporality in the labor market - should be combined with stimulus incentives that have the greatest multiplier effect on GDP growth.
At the same time, he stressed the opportunity this economic recovery poses for inclusive and sustainable growth if the digitization of businesses and public administrations are leveraged, as well as the necessary transition to a low carbon economy.
The private sector: responsibility and opportunities
In order to move in this direction, he feels it is necessary to attract private investment and bolster it with the right incentives in attractive sectors, such as photovoltaic self-consumption, or residential energy efficiency programs for example. He also emphasized that: “The focus needs to be on attracting investment to lay the foundation for subsequent economic growth. All of this requires confidence, a stable and predictable legal and institutional framework, sustainable public finances, an efficient tax system and an incentive framework that allows private initiatives to take risks,” he explained.
Regarding banks’ role in this reconstruction process, Carlos Torres Vila said that “banks can play a key role” in channeling funds, analyzing the projects that are financed and strengthening their effect on the economy. First, they have the operation, commercial and capillary capabilities to roll out programs and channel funds from Next Generation EU (NGEU), especially for the self-employed and SMEs. Second, banks have the ability to analyze credit risk and the viability of the projects, ensuring that the distribution of funds is efficient. And finally, banks have a prominent role in public-private financing of green projects.
Carlos Torres Vila, during the first session of the event. A debate in which José María Aznar (President of FAES; former President of the Government of Spain), Pablo Hernández de Cos (Governor of the Bank of Spain), Josep Piqué (economist, former Minister of Science and Technology, of Affairs Foreign Affairs and Industry) and Valerio De Molli (CEO of The European House-Ambrosetti).
Impact of COVID, an opportunity for sustainability
The COVID-19 health crisis has led to the greatest recession since the end of World War II and a wave of unprecedented social and political instability around the world. “Europe and Spain will not recover to pre-crisis levels until well into 2022, or even 2023. It is good news that there is such a decisive response from monetary and fiscal authorities. Monetary policy has been crucial.” In light of the magnitude of the future challenges, Carlos Torres Vila defended the need to reflect on how we want to rebuild our economies and societies, as the challenge is to do so in a sustainable manner in the long-term, leaving no one behind.
Climate change, one of the greatest disruptions in history, has implications and an impact on all levels. Thus adaptation to the new scenario it presents must be immediate, requiring significant investments in the short-term in many industries. In this sense, he feels that currently, in light of this common challenge, governments, investors, clients and regulators are becoming increasingly aware of the importance of climate change and social responsibility. “We have seen how in one year, commitments to carbon neutrality - the famous ‘net zero’ - have doubled. In the case of BBVA, we made a commitment to be carbon neutral this year, 2020, and we also set an internal price on carbon, and are committed to aligning our financing portfolio to the Paris Agreement.”
This series of presentations organized by Expansión aims to analyze and discuss the profound changes that the COVID-19 crisis are causing internationally with the title, “Building an ecosystem focused on people. The post-COVID-19 era”.
At the event, which is being held on October 27th and 28th, top corporate and institutional figures are comgin together to address questions on the health crisis - from social inequalities and the reconstruction of the healthcare system to the role of the circular economy and technology in facing the challenges of the future, and the impact that COVID-19 has had on international relations.
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