##p, i. e. 0. 5 % of annual gdp, to achieve a structural public balance in equilibrium. in this regard, if the ratio between the total tax take and gdp is taken as reference, it stood at approximately 35 % last year, around 6 pp lower than that recorded in the euro area as a whole ( decreasing to around 3 pp when the arithmetic mean of the various countries is considered ). spain is particularly notable for its low level of consumption taxation, in international comparisons, and for a low revenueraising capacity in respect of environmental taxes. specifically, the simulation presented on the slide assumes that potential economic growth will stand at slightly above 1 %, the gdp deflator will converge towards 2 % from the mid - 2020s, and average interest rates on debt will rise only moderately from their present levels. moreover, it should be emphasised that debt reductions would be greater under alternative scenarios in which the potential economic growth rate rises, highlighting the importance of pursuing policies in this respect, which i will now go on to discuss. 11 ( ii ) policies to foster long - term growth in the strategies to reduce public debt in the medium and long term, the role played by policies to promote sustained growth in activity and employment must be at least as important as that of the multi - year budget plans. at the start of my testimony, i stressed that the key objective of economic policy at the current stage of the crisis must be to ensure the most favourable conditions possible for when the economy emerges from lockdown. however, more persistent adverse effects on certain sectors after the pandemic has been brought under control cannot be ruled out, although it is undoubtedly too early to anticipate how extensive they will be, or which activities will bear the brunt of the impact. further, certain tentative indications suggest that, in the long term, demand could fall in some sectors, such as retail trade, and increase in others, such as logistics, technology, and it systems. in view of this possibility, it would seem advisable to make the relevant preparations through arrangements to ease cross - sectoral and cross - company reallocation and to strengthen the lifelong learning of workers, especially considering that a priori the cross - sector transferability of knowledge between potential losers and potential winners does not appear to be particularly feasible. 12 for illustrative purposes, if, as a result of implementing structural reforms, potential growth were to rise by 0. 5 pp per annum, the debt ratio under

better growth scenario than that considered in our latest projections and to an ultimately moderate impact. if, on the contrary, such normalisation does not come about, that may affect consumption and investment more markedly. a further loss of confidence may prompt households to increase their precautionary saving and to postpone their consumer - durables and house purchase decisions. and, above all, it may affect business investment in catalonia, given that the climate of uncertainty would delay the undertaking of new investment projects and set back hiring decisions. moreover, these effects on investment and consumption decisions might extend to both resident and non - resident agents, adversely affecting variables such as tourism and foreign investment. the outcome would be a greater adverse impact on activity both in catalonia and in the spanish economy as a whole. conclusions allow me to conclude. in addition to the risks i have highlighted, we are facing other problems, chief among which, owing to its far - reaching and numerous consequences in the medium and long term, is the ageing of our population, which is expected to continue and even intensify in the near future. this process involves various adverse effects, including most notably, as we all know, the challenge that a progressively longevous population poses to the public pensions system. the reforms in recent years have been appropriate and have contributed to shoring up the system ’ s financial sustainability ; but adverse demographic developments require measures whose application should not be delayed. population ageing gives rise to a reduction in the proportion of the total population making up the workforce, which negatively affects productivity and our economy ’ s ability to innovate and incorporate new technologies. given that it is impossible or very difficult to change demographic trends, even in the medium term, it will be important to persevere in enhancing the education system and pursuing the institutional and regulatory reforms that contribute to improving productivity, promoting or enabling greater competition and innovation. thank you very much for your attention. 6 / 6