The € billion fund managed by SEPI (the State Industrial Holdings Corporation) enables large strategic corporations to be recapitalised, but it would be advisable to complement this with new tools aimed at strengthening the solvency position of smaller companies. For those firms that are highly indebted but with a viable business, debt restructuring could be an advantageous option for lenders and borrowers alike. To enable this process, insolvency arrangements should be improved so as to increase their efficiency. In Spain, these proceedings are usually dragged out over time (lasting three and a half years on average7), destroying business value in the process and, on most occasions, ultimately leading to a winding-up of the company. To prevent congestion in the courts, out-of-court payment settlements could be promoted. In this connection, we should consider the advisability of including, under certain conditions, certain public-law claims in these agreements, and that the public sector’s position in these processes should favour a debt restructuring agreement being swiftly reached. That could be achieved, for example, by granting incentives to other creditors so that they support the agreements. This would affect not only public-law claims but also the exposures resulting from the potential enforcement 7  M. García-Posada and R. Vegas Sánchez (2018): “Bankruptcy reforms in the midst of the Great Recession: The Spanish experience”, International Review of Law and Economics, 55, pp. 71–95. 7  of some of the guarantees granted to firms and the self-employed under the ICO facilities.

Debt restructuring mechanisms need to be more efficient, so as to promptly resolve the insolvency problems some firms are experiencing. Other structural policies could also contribute to shoring up the composition of firms’ debt in order to assign a greater weight to capital. These policies might include the elimination of the preferential tax treatment of debt as opposed to equity and headway in developing equity markets in Europe. Finally, as mentioned on various occasions, all these measures must form part of an ambitious reform agenda aimed at tackling our economy’s structural problems. These include most notably high unemployment, labour market duality and the low productivity of our firms. And, in parallel, we must design a credible strategy for reducing, in a gradual but sustained fashion, our fiscal imbalances. Such a strategy may be implemented once the pandemic is behind us and the economic recovery is firmly entrenched. It would entail significant benefits, by increasing the economy’s reform-led potential growth and by enhancing the credibility surrounding the sustainability of public finances in the medium term. That, in turn, would increase the existing fiscal space available and would boost the expansionary effects of the current fiscal measures. In short, so we may have the fiscal leeway needed to be able to increase support measures to the economy should pandemic-related developments so require, we must resolutely implement the reform agenda, plan the fiscal consolidation process and reform support instruments to make them more flexible and targeted. Thank you very much. 9