10  Importantly, in addition to the ECB measures, others that have also been conducive to the flow of bank funding to the economy during this crisis are the public guarantee programmes implemented by national governments and the decisions of both macroprudential and microprudential authorities to allow financial institutions to make use of their capital buffers. In particular, the public guarantee programmes would help explain the disparate performance of credit between households and firms in Spain: while the rate of decline in credit to households has increased slightly, credit to productive activity has grown at rates over 7%. More than 40% of all new credit granted to firms comes under the guarantee programme, which reflects its importance in explaining these developments. The ECB also approved a second block of measures, relating to the asset purchase programmes, designed to stabilise financial markets in all euro area countries and neutralise the downward pressures on inflation stemming from the contractionary effects of the pandemic. Since end-February, financial conditions had tightened in the euro area, with both corporate and sovereign risk spreads widening considerably. This widening of spreads implied an increase in financing costs both for governments and firms, which acted as a channel for transmission of the pandemic crisis to the real economy. The spread widening in the euro area was uneven: countries that started from weaker fiscal positions, with higher debt levels, and those that were most affected by the first wave of the pandemic witnessed a much more pronounced increase in their financing costs.

For this reason, it is of utmost importance to have an accurate diagnosis of the factors that limit the potential growth of the Spanish economy. In this respect, the diagnoses available tend to be unanimous in emphasising, first, the low productivity growth in comparison with other European countries and, second, the insufficient utilisation of labour. With regard to the lack of productivity growth, it is sometimes argued that the reason lies in our productive structure, insofar as industries in which the growth rate of this variable is more modest have a comparatively high weight. This argument has some merit. However, careful examination of the available evidence shows that relative productivity growth in Spain is lower in most industries. This is something that economic policies need to address  8  See Box 9 of the “Quarterly report on the Spanish economy”, Economic Bulletin 3/2020, Banco de España. 19  if we wish to raise the potential growth of the Spanish economy and, thus, the present and future well-being of our citizens. The cornerstone of any strategy to improve productivity growth, and thereby boost the opportunities of all citizens and the transition towards a more sustainable economy, should focus on two areas in which Spain has a worrying shortfall: human capital and technological capital. As regards human capital, Spain’s relative disadvantage with respect to more dynamic European economies should lead to a rethink of the institutional design of the educational system, including a far-reaching review of the curriculum content and the system of learning itself.