UK and Spain assess­ing cur­rent is­sues

The Pak Banker - - Front Page -


Mr Luis M Linde, Gov­er­nor of the Bank of Spain ad­dress­ing at the din­ner open­ing the 25th Ter­tu­lias His­panoBritáni­cas said al­most a quar­ter of a cen­tury back, fol­low­ing the visit by her Majesty Queen Elizabeth II to Madrid in 1988, a group of Span­ish and Bri­tish diplo­mats, politi­cians, aca­demics and civil ser­vants had an ex­cel­lent idea. They took ad­van­tage of the Gi­bral­tar dis­pute not to fur­ther cool re­la­tions be­tween Spain and the United King­dom, or to squab­ble some more, but rather to seek to be closer friends and try and un­der­stand one an­other bet­ter.

To­day marks the 25th edi­tion of the Ter­tu­lias. Let me wel­come all those tak­ing part, firstly and es­pe­cially our Bri­tish friends, who hon­our us with their pres­ence. A few days ago, pe­rus­ing James Boswell’s leg­endary book on the life of Sa­muel John­son, one of Euro­pean cul­ture’s lit­er­ary giants, I came across sev­eral para­graphs in which Boswell re­lates Dr John­son’s in­ter­est in Spain. He was con­vinced that Spain was a greatly un­known coun­try in Eng­land and in Europe, and he sus­pected it could teach much to those tak­ing the trou­ble to travel there. Sa­muel John­son made this state­ment around the mid-1760s.

To­day, Spain is no doubt much bet­ter known in the United King­dom than in John­son’s time, as it is also the case for the United King­dom be­ing bet­ter known in Spain. But ev­ery­thing is rel­a­tive and I be­lieve it’s not dif­fi­cult to spot black holes, mis­taken no­tions and er­rors of un­der­stand­ing on both sides. While th­ese Ter­tu­lias are usu­ally an op­por­tu­nity to over­come some of th­ese prob­lems, they most im­por­tantly al­low us to un­der­stand our re­spec­tive stances on cur­rent, im­por­tant or press­ing is­sues. And we also en­joy our­selves.

Be­cause, un­like other meet­ings, the Ter­tu­lias are, from my ex­pe­ri­ence, a rather en­ter­tain­ing event. I still have fond mem­o­ries of the meet­ings I at­tended and the dis­cus­sions we had in the now dis­tant 1990s in San­ti­ago de Com­postela, in Seville, in San­tander and also in Ox­ford and in Ed­in­burgh. The Ter­tu­lias were in­sti­tuted at what was a key time in re­cent Euro­pean his­tory: the dis­ap­pear­ance of the Berlin Wall, Ger­man re­uni­fi­ca­tion, the col­lapse of the Soviet Union and the start of the Euro­pean Mon­e­tary Union project. Next came the great eco­nomic ex­pan­sion at the on­set of the 21st cen­tury, the in­ter­na­tional fi­nan­cial cri­sis and the se­ri­ous eco­nomic prob­lems that have af­fected all of us, Spain and the United King­dom in­cluded.

The Euro­pean Union and the Mon­e­tary Union are to­day at a dif­fi­cult cross­roads. They face a prob­lem which, when the Maas­tricht Treaty was ne­go­ti­ated, we knew might arise: that the

Mon­e­tary Union with­out fis­cal in­te­gra- tion would be an ed­i­fice with weak foun­da­tions. And although at­tempts were made to head off the risk with pub­lic deficit and debt rules, it was known that th­ese were merely shoring up the build­ing and that they could not re­solve its fun­da­men­tal weak­ness.

But the dif­fi­cul­ties we are en­coun­ter­ing in the Euro­pean Union and in the Mon­e­tary Union have not only to do with the weak fis­cal foun­da­tions of this ed­i­fice. They are also re­lated to prob­lems of what we call “gov­er­nance”.

Clearly, we have ex­tremely com­plex ne­go­ti­at­ing and de­ci­sion-mak­ing pro­ce­dures in the Euro­pean Union and the Mon­e­tary Union. And, ir­re­spec­tive of or in ad­di­tion to macroe­co­nomic im­bal­ances, th­ese prob­lems af­fect the sta­bil­ity of the mar­kets and the per­cep­tion of risk re­gard­ing the area’s fu­ture.

Most Bri­tons are scep­ti­cal about Mon­e­tary Union and its fu­ture. Although it is not very po­lit­i­cally cor­rect to say so, the truth is that this scep­ti­cism is really not too bad for us since it helps those of us who are mem­bers of the Mon­e­tary Union to see our­selves from out­side and to take, per­haps, a more real­is­tic view. Scep­tics or not, we can agree that the fall­out from a fail­ure of the Mon­e­tary Union would cer­tainly af­fect the fu­ture of the Euro­pean

The United King­dom chose not to par­tic­i­pate in the Mon­e­tary Union and holds firm to this po­si­tion.

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