2023-12-16 09:38:30
Defender of the free market and freedom in company decision making, President of the Spanish Confederation of Small and Medium Enterprises (Cepyme), Gerardo Cuerva, rejects the use of the SMI as if it were “a social policy”. Furthermore, he warns that “we are destined to be a non-competitive country”, he anticipates that SMEs are going to have a very bad time and he confesses to being concerned about the equality of Spaniards and the separation of powers.
What do you think of the Government’s new proposal to increase the minimum interprofessional wage (SMI)? How affects?
The SMI is not and should not be a social policy. It is an indicator. In the case of Spain, there are currently 46 provinces in which the SMI is higher than the average salary of the SME in that territory. In fact, for SMEs, the SMI already represents 70% of the average salary. Therefore, we have a very serious competitiveness problem. I see that this Government confuses society with the fact that the SMI is a social policy. But the best social policy is not to raise salaries by royal decree, but to have a job. Because where does that end? In the intervention of the economic system. The SME can no longer support further increases in the minimum wage.
And does this competitiveness problem also arise from raising the SMI equally everywhere, without taking into account regions, sectors…?
The minimum wage is not the salary of Madrid or Barcelona. In Spain, in the last five years, productivity has decreased by 3.8%. There are countries like Ireland where it has risen 25%. Without going that far: in Portugal, with a social democratic government that is committed to business and competitiveness, productivity has increased by 4.6% in that same period.
At what figure would it be good to place the SMI?
That question is pernicious. It must be a function of inflation, productivity, employment and the economic situation. Because it is an indicator. The SMI is not what a Spaniard needs to live. If there are places or territories where it does not reach, then social policies must be activated. If we intervene in salaries, it is actually an intervention in the economic system. And we would also put an end to those more than 4,500 collective bargaining tables that calculate the salaries of each territory and each sector.
Collective bargaining is then mortally wounded.
If we talk about social dialogue as a whole, this Government is calling it into question. It proposes things that have not gone through social dialogue. How to reduce the working day to 37.5 hours: it doesn’t matter the sector, the territory… everything doesn’t matter. By royal decree are we going to lower the hours? I don’t know where the social dialogue is there. The social peace that social dialogue has given is exemplary in the world. In the 1970s, 180 million hours were lost due to strikes; However, in 2018 it did not reach 12 million.
Productivity has fallen 3.8% in five years. In Portugal it has risen 4.6%
This is a problem that also reflects tensions within the Government itself.
Now we are with the issue of the subsidy and the Sepe. And there is a clear confrontation between one part of the Government and another. I am very aligned with the concern that the Ministry of Economy has that the Sepe does not work and that it must be fixed. But what is the arrangement? More subsidy? Why don’t we work on finding jobs for people? Why do we want to put this country in a subsidy regime?
The Government has said that this is going to be the legislature of effective full employment…
Be careful not to fall into those theories that I have heard from some professor that we end unemployment with more public employment… For employment, what we have to do is strengthen companies: that there are better companies, bigger, more competitive, more productive. That will bring more employment and better jobs. That is the way, not the royal decree. In Spain it is necessary for companies to go up a notch in size. Our country has a very small size of companies. Below the European average. If we simply converged to the average European size, some 1.2 million new jobs would be generated, which would mean an increase of 5% of GDP and more than 20 billion in revenue. We have detected 100 barriers that prevent the growth of the company.
All of this can also be transferred to social contributions, which directly affect employment.
Completely. The minimum bases for social contributions have risen by 50% in recent years, and the maximum bases by 20%. With this the company is no longer competitive. The Institute of Economic Studies (IEE) has recently published research in which it says that labor costs have risen 17%. And productivity is going down… We are destined to not be a competitive country. To have companies that do not resist and we expel them from the market.
With this panorama, is it feasible that a SME survive?
The measures put in place today are not immediately effective. What you sow today you will reap over the years. And the passing of the years tells us that small and medium-sized Spanish companies will be hit harder. It will not be competitive. Either you believe in the company or you are going to have a very bad time.
The communist wing of the Government thinks that only public companies are possible
Experts say that 61% of European funds go to the public sector.
The perception of SMEs is that the funds are not reaching them. Only 15% of the last mile has been covered.
But is it just a problem of the Administration’s inefficiency that the funds do not arrive?
Well, many things come together. It started with a very centralized design in the Moncloa… For the SME, four things happen: the bureaucracy to access the fund is very complicated, the deadlines are very short, the typology of the program is very specific and many times the SME does not It is identified because in an SME there is no human resources department, an administration department, a legal department, a financial department… But the biggest problem of all is co-financing. The company had to put up 70% of the investment, and Europe, 30%. But the SME and the Spanish company were not in a position to start projects with them financing 70%. We have been working on this with the Government.
You have said that you have identified 100 obstacles that hinder the growth of companies, which are the most important?
There is a very striking one, which the Bank of Spain even cites, which is the employee 50 syndrome. When you have 49 workers and you go to 50, the number of new obligations that arise at that same moment are exaggerated. These obligations are related to union representation, labor measures, billing, aid that you can no longer benefit from… The Bank of Spain said that when 49 workers are reached, new companies are created, but growth no longer continues.
“We are committed to not being a competitive country and to kick companies out of the market”
How do you foresee this legislature?
The Government has a clear ideological heterogeneity. It is difficult to reach agreements in the medium and long term. I see it as very complicated to approve structural policies for the good of Spain for the next 15, 20 or 30 years. But what worries me is that we play with the basis of the rule of law and the differentiation of powers or the equality of Spaniards could be put into play.
There is also the agreement to promote the return to Catalonia of the companies that left due to the process. Is it feasible?
If we do not manage to provide certainty and stability to the country and Catalonia, it is difficult for the company to return. In the end, the company will be located in the friendliest, truest and safest environment to carry out its activity.
What more needs to be said about the harassment of the businessman? Does it soften? Is it going to soften?
As we have spent a few months in another debate – the investiture, the pacts… – we have removed the focus of attention from the businessman. But we must not forget that in the previous months there has been harassment with names and surnames, both of companies and businessmen. That is not the way if we want to progress.
Does the forgiveness of Catalonia’s debt influence activity?
There we must start from the equality of Spaniards wherever they reside. If we put at risk that basic principle that we gave ourselves in the 1978 Constitution, as well as the separation of powers, we will enter a complicated and unstable system. Beyond that is the debt. What is not worth it is “ok, I forgive you”… And who pays for it? Someone will pay for it, right? If we put equality at risk and the debt situation is so high, I don’t know how the accounts will turn out. Is this coffee for everyone? Can we afford it?
Is there any public or private organization that is already advising against investing in Spain?
They say that some investment funds are classifying Spain as uninvestable. The Spain brand may be damaged. But the most unfortunate thing of all is that investments remain in the drawer. I know of some cases in which the investment can remain in the drawer since the rule of the game changes daily.
There is a certain debate about whether the State should be more present in the capital of companies, as a result of the case Telefónica.
I believe in free competition, I believe in the free market, I believe in business freedom and I believe in private activity as the axis of progress. Probably, this Government wants, with this interventionism, to change the system. I am concerned that a part of the Government, and even more so with a social democratic part and a communist part, could come to think that only public enterprise is possible for progress. I do not believe in that. I believe that public activity is compatible with private activity. The company must generate sufficient resources, which in the end are what make the welfare state possible.
There is also a new European regulation coming to shorten payment terms.
Late payment is a very serious problem that Spain has. SMEs have a very serious problem because they invest 2.4 billion euros to finance commercial debt. We cannot dedicate that money to innovation, nor to digitalization, nor to improving salaries… The average payment period continues to increase. At present it already exceeds 82 days… And there is a clear task there.
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