14. 01. 2020 the competitiveness of the spanish economy : from recent achievements to medium - term challenges spain investors day pablo hernandez de cos governor good evening, ladies and gentlemen. allow me to thank the governing board of spain investors day and their chair, benito berceruelo, for kindly inviting me to speak to you on the tenth and therefore landmark anniversary of this annual international forum. since its first edition, this meeting has become a showcase affording spanish companies the advantage of offering a first - hand view of their position and prospects to foreign investors. i am convinced that the meeting will, once again, successfully contribute to boosting spain ’ s image and international investment in our country. in my address i shall be analysing the competitiveness of the spanish economy over this past ten - year period. for me, there is no better variable than competitiveness for describing some of the structural changes our economy has undergone in the past decade. it also allows me to highlight some of the main challenges lying ahead, including those stemming from the new protectionist tendencies that have arisen in the past two years. achievements in fact, competitiveness symbolises the metamorphosis of our economy in the past decade. and, as a result, the improvement in the external imbalance is the most visible feature of the progress made since the crisis in correcting the economy ’ s main macrofinancial imbalances. indeed, the external surpluses posted since 2012 are a strongly distinctive feature when set against the external deficits that had systematically characterised previous upturns. in this connection, it is worth offering some figures illustrating the scale of this change. specifically, the spanish economy ’ s current account balance has improved by more than 11 percentage points ( pp ) of gdp since the start of the crisis, turning from a deficit of 9. 4 % of gdp in 2007 to a surplus of around 2 % in 2019. in terms of components, while all captions have contributed positively to this adjustment, of most note has been the correction of the net balance of non - energy goods and of the primary and secondary income balance. the contributions of the latter to the improvement in the total balance in this period were almost 6 pp and 3 pp, respectively. but the energy goods, tourism and non - tourist services balances have also each contributed about 1 pp. as suggested, among the key factors behind this correction of the external balance are the gains in competitiveness achieved in these past ten years. these

can assess the monetary policy situation calmly. ladies and gentlemen, anthony quinn supposedly once said that even when you ’ re 60 you can still feel like you ’ re 40. although only for half an hour a day. luckily, that doesn ’ t apply to central banks. not least because 60 isn ’ t actually that old for a central bank. after all, the bank of england and the sveriges riksbank have both been in existence for over 300 years. so we, too, can be just as committed to safeguarding the stability of our currency at 60 as we were at 40. indeed, the euro - area crisis brought it home to all of us that the stability of the euro cannot be taken for granted. and the same applies to the stability of the euro area, in fact. unfortunately, this vindicates the statement made by my predecessor hans tietmeyer 20 years ago : “ the monetary union will not experience only sunny days. there will be rain and storms, too ". the extensive crisis measures taken by european policymakers and the eurosystem may have prevented the crisis from escalating, but they have not made the monetary union permanently stable. above all, additional elements of mutual liability have been introduced. economic and fiscal policy, on the other hand, remain primarily under the control of the member states. and as we know, they set great store by their sovereignty. this has knocked the relationship between actions and liability off balance. but i am convinced that responsible decisions can only be made if decision - makers are also held liable for the consequences of these decisions. this is the liability principle on which our market economy system is based and which walter eucken held to be a constitutive principle of the social market economy. consequently, i am sceptical of reform proposals that boil down to extending mutual liability without transferring the corresponding powers to intervene to the european level. they could 6 / 8 bis central bankers'speeches ultimately turn the euro area into a transfer union, which would exacerbate the problems in europe rather than solve them. most importantly, a development like this would also undermine the foundations of a stable currency. given the lack of willingness to cede extensive fiscal sovereignty rights to brussels, or even to venture into a political union, the only remaining option is the one anchored in the maastricht treaty – to reinforce the member states ’ individual fiscal responsibility. it is up to the member states to make far - reaching reforms that enable them