To entrench the recovery will necessarily require absorbing large numbers of unemployed; the reversal of unemployment’s harmful effects on confidence and public finances; restoring health to the financial position of households and firms; and, in sum, the restructuring of a growth model that was not sustainable, especially under the new conditions created by the international crisis. And, as I have reiterated on many occasions, to do this it will be vital to adopt ambitious measures and reforms. The economic policies pursued since the start of the crisis have focused, logically, on countering the contractionary forces at play, and the efforts deployed have contributed to lessening their impact. But now the slump phase has bottomed out and there are signs of a possible stabilisation, we must adopt an approach geared to absorbing the most negative effects of the crisis, such as the high level of unemployment and of the budget deficit, by addressing the structural problems of the Spanish economy so as to restore its growth potential and to prevent the risk of a scenario of prolonged economic slackness from materialising. The demand-side policies pursued to combat the economic crisis have been very energetic. The cuts in official interest rates by the ECB have fed through to interbank markets and to credit transactions, and although borrowing conditions remain very tight, as a result of the upward revision of credit risk, the decline in interest rates is undoubtedly contributing to alleviating the financial pressure on the private sector.

It was all the more sobering for the young economist to find that during many months his main task consisted in reading the economic section of newspapers in order to compose summaries that went as newsletters to other organisational units which had the same newspapers on their desks. Later on, after having been observed attentively by superiors, more serious tasks were given to the young economist. The corporate planning unit requested economic data serving as exogenous variables in their divisional or regional planning exercises. The young economist was enthusiastic. He thought that now the moment had come to apply his macroeconomic and econometric forecasting skills. But again he was disappointed. Senior colleagues explained that forecasting had long been outsourced to independent forecasting institutes. What was required from the junior was simply to take these outside forecasts and fit them into the tables according to the requirements of the planners. He then found out why his professional skills were not in demand. The reason was not the greater efficiency and quality of outsourcing. The reason simply was that outsourcing made it easier for the company’s economics unit to avoid responsibility. The planning of corporate production was a heavy responsibility indeed. The exogenous economic variables affected the outcome of the planning process decisively. Erroneous economic data were likely to produce disaster, and for disaster nobody in the central staff of economics was prepared to accept the blame. Therefore, economic forecasting was outsourced. If disaster did strike, the external provider of the data would be blamed.