The Basque Government’s Minister of Economy, Pedro Azpiazu, assured today that “terrorism was a true human drama, which I also lived through, but I am convinced that it had no impact on the Basque economy.” Azpiazu, who was participating in a discussion organized by the Bilbao Chamber of Commerce, thus responded to the question asked by a former BBV bank manager, Luis Ramón Arrieta, who had suggested the need to “launch a special plan to help us to overcome the structural problem that ETA’s activity generated for so many decades, especially in investment.
Despite the fact that the legacy of ETA this land left almost fifty businessmen murdered; With just over 80 kidnapped and an incalculable number of extorted with the so-called ‘revolutionary tax’, Azpiazu currently believes that this black history must be delimited «to the human drama». The thesis put forward by the counselor also suggests that the forced flight of dozens of Basque businessmen out of the Basque Country did not have any harmful economic effects either -Azpiazu has reiterated several times that “it did on a personal and human level”-, although It is well known that this precipitated the displacement of numerous companies and decision-making centers.
Although the former bank manager who questioned him reminded him that “the entity where I worked made the decision to start moving entire departments outside, to Madrid, the day they planted a bomb in the building” -he was referring to the attack against the headquarters of Banco Vizcaya, in February 1983, in which three of the entity’s employees died-, the counselor has insisted on a supposed neutrality between terrorism and the evolution of the Basque economy.
“We haven’t lost weight”
“We have a GDP comparable to that of that time and in recent years we have grown in a similar way to the Spanish economy,” insisted the Minister of Economy of the Basque Government. A statement that does not take into account the loss of relative weight of the Basque economy in Spain as a whole, which has lost many positions. From representing at times up to 6.5% of all the wealth produced in Spain, the Basque Country has come to be below 5.9% in recent years.
On the other hand, Azpiazu has reiterated today his criticism of the monetary policy that the ECB and the US Federal Reserve have undertaken because, in his opinion, the rise in interest rates could “make banks wobble”, in addition to causing excessive cooling of the economy. Azpiazu has exposed this thesis, aligned with those who criticize the strategy of raising interest rates as the best antidote against inflation, during a conference given this morning at the Bilbao Chamber of Commerce.
Monetary politics
In this context, he has referred to an Anglo-Saxon term, ‘frenemies’, friends and enemies, which refers to the positive but also perverse effects that the current monetary policy can have for the financial sector. Thus, among the first, he referred to the increase in “short-term benefits” derived from the increase in credit rates and “which has already been reflected in the accounts that entities have presented for 2022.” But he has also made reference to the other side of the coin, to enemy effects, “because these increases may be accompanied by a deterioration in macroeconomic conditions. The drop in the volume of credit, the increase in costs, the potential rise in delinquency as a result of the rise in interest rates, the erosion of the value of assets and the deterioration of the macroeconomic outlook, which may affect the debtors’ ability to pay and force entities to increase their allocations to provisions, can neutralize the favorable impact on entities’ margins and, in extreme cases, shake the business model,” he warned.
Launched the message of ‘sand’, the director has also put a ‘lime’ in his speech, to ensure that it is necessary to have “tranquility and emphasize that the banks in the euro zone have demonstrated their capacity to resist macroeconomic disturbances adverse in recent years, unlike what happened during the financial crisis of 2008.