"We must take advantage of the crisis to take a great leap towards the green economy"

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The role of companies is being crucial to face the health emergency. In this interview, the president of Bankia, José Ignacio Goirigolzarri, analyzes how we can overcome the economic crisis in which we are immersed, defends a basic income that is "technically impeccable" and warns of the risk that, in his opinion, would imply an amendment to the entire labor reform.

What do you think are the key elements to face the economic crisis that the coronavirus has generated?

When deciding what measures to take and being able to assess them, it is important that we mark the time horizons well. In the very short term, the measures that must be taken and that are being taken must be aimed at preserving and restoring the lost income of the most affected people, and providing liquidity to companies so that no one is left unprotected. In the short and medium term, what is relevant is to preserve the business fabric because it is the way to ensure employment and the financing of the welfare state. And in these time horizons it is also important to see two planes. At the beginning, all measures to support companies must be generalized for all sectors, such as loans with ICO guarantees or ERTEs. Next, it is time to move from the macro to the micro and, at that time, dialogue with those who are in the day-to-day, with those who know the problems of each sector is necessary. Therefore, going forward, it seems important to me to be aware of the importance of being close to the private sector, of knowing what their needs are and how they can be helped. But also, looking more in the long term, the mentality with which we face this crisis is very important. We have to see this moment as an opportunity for transformation and take into account that now we can do things that we did not dare to do until now. I think it is time to tackle the structural problems that we have been talking about for some time with the aim of improving the productivity of our country. And, for this, it is essential to improve the employability of our citizens, and this involves applying active employment policies and preparing our citizens to provide us with education and training - in all age ranges - that help us to face to the challenges of an environment that will require skills that are very different from those of today. The training offer must respond to the demands of the labor market, and must also seek the integration of the segments of the population with the least capacity to enter the labor market: young people, long-term unemployed and people with disabilities. This is a primary challenge for Spanish society, and in fact I believe it is the most important and inclusive project that we should propose as a society.

What role should this Green Deal, promoted by the European Commission, which is committed to reconciling the economy with the planet and decarbonizing Europe by 2050, play in the recovery?

"The company that is not guided by the Sustainable Development Goals will have no future"

As the European Union itself has highlighted, the European Green Deal establishes how to make Europe the first climate-neutral continent in 2050 by boosting the economy, improving the health and quality of life of citizens, protecting nature and leaving no one behind. It is the roadmap to endow the EU with a sustainable economy. The crisis now requires us to rethink the European productive fabric and is pushing us towards an important transformation, which we must take advantage of to make a great leap towards the green economy. Achieving this goal will require governments and businesses to transform climate and environmental challenges into opportunities at all levels and to achieve a just and inclusive transition for all. To this end, Bankia has carried out in recent years a series of adhesions and internal transformations in accordance with the requirements and objectives set by the European Commission in the short, medium and long term. Bankia has shown its strong support, since July 2018, to the recommendations on financing and climate change promoted by the Financial Stability Council through the TCFD (Task Force on Climate-related Financial Disclosure) and we have been one of the first signatory entities of the United Nations Collective Commitment to Climate Action, which is part of our adherence to the Principles of Responsible Banking, also of the United Nations. Along the same lines, we have joined the call to action for a ‘New Deal for Europe’ (A New Deal for Europe), in terms of sustainability, signed by 250 CEOs from all over Europe. Underlying the goal of all these partnerships is the need to drive the transition to a low-carbon economy, and one of the best ways to achieve this for the financial sector is through investment and sustainable financing. We firmly believe in it.

The debate on the need to promote a new business model, connected with the Sustainable Development Goals, has more and more signs of reality. How do you understand what capitalism in the 21st century should be like?

Any company, society or government must be guided by these Sustainable Development Goals (SDGs) that, after all, affect us all and represent the global challenge of the planet where we live. We cannot turn our back on them, because a company that is not aware of its relevance and its role in the market will have no future. Today (and in the future it will increase) other attributes are demanded and requested to be in the market, not only by the end consumer, but also by the professionals who work in companies. Talent wants to be in those companies that have a strong commitment to society. Therefore, the capitalism of the XXI century must be a solidarity and conscientious economic system, in which all economic agents are aware that the permanent objective must be the search for the sustainability of the company, of the society in which operates and the whole planet. I am firmly convinced that the sustainability of a company depends on society, the citizens, understanding that it is useful for them. In this sense, the 2030 Agenda and the SDGs represent for Bankia, together with the 10 principles of the Global Compact, the pillars on which we support our policies and our responsible management strategy. All our actions follow a rigorous Responsible Management Plan that is aligned and in line with the company's Strategic Plan. In it, the different departments of the bank undertake to achieve a series of goals that they define in their constitution and that are based on five strategic axes for Bankia: customer satisfaction and relationship, talent development and the commitment of our professionals , sustainable development and the drive towards a low-carbon economy, support for society and excellent corporate governance with solid values.

Inequality was a pressing problem and this crisis will exacerbate social gaps: What can banks do to democratize access to capital and improve the redistribution of wealth?

"It is necessary that the minimum vital income includes incentives so as not to discourage the return to the job market"

Indeed, any crisis (we already experienced it in 2009-2012) exacerbates social gaps. However, I would like to emphasize that in Spain, the origin of inequality does not have the same origin as, for example, in the United States. While in the United States inequality is produced, to a greater extent, because a small percentage of the population accumulates more and more income, in Spain inequality is produced mainly by our high unemployment rate. Therefore, I believe that, in this sense, we must focus on preserving and improving employment, jobs, and for this it is essential to support entrepreneurs and the self-employed, because they are the true generators of employment. In this way, we will largely ensure that social gaps do not worsen. Second, and as I said before, unemployment is closely related to education. In the medium and long term, we must work to improve the employability of our citizens. Provide ourselves with a sustainable training model that is linked to the current and future needs of the labor market. In the same way, financial education is essential to work on savings, investment, entrepreneurship and social justice models, which will be vital to relaunch the economy, and for us to gain equality and social cohesion.

What is Bankia doing to help the self-employed and SMEs right now?

I insist that supporting companies is the best contribution we can make to citizens and to the Spanish economy in general. For this reason, we are financing, providing liquidity, restructuring, making collections more flexible and providing as many solutions as possible so that the vast majority of companies and freelancers can get ahead. We have already granted 6,600 million euros in loans with an ICO guarantee, of which 5,000 million are guaranteed by the Official Credit Institute (ICO) in a total of 28,000 operations, of which more than 26,600 are for SMEs and the self-employed. But the world does not end with ICO endorsements. Since the health crisis began, we have made financing and liquidity available to companies amounting to 16.4 billion euros. And, in addition, in the first quarter we put another 14,500 million. And we have also implemented other measures, of less economic significance, but which have helped thousands of companies that have been left without income because they were closed: we have exempted the payment of commissions to the POS and we have returned the money of the insurance of accidents to the self-employed, among other measures. In general, I believe that the contribution of banks as a whole to the Spanish business sector is being frankly notable, both in financing with ICO guarantees and in operations without public support. Proof of this is that in April credit to companies grew at the interannual rate for the first time since June 2009 and also that in Spain the banks have granted credits with public guarantee for an equivalent to 4% of GDP, a figure similar to that of France , and much higher than 1% in Germany or 2% in Italy.

What consequences do you think the repeal of the labor reform could have?

"In Spain inequality is produced mainly by our high unemployment rate"

First of all, I think it is essential that we value the labor reform, which has created 3.5 million jobs in Spain since 2013 and has given 3.5 million workers access to the figure of ERTE in this crisis . I do not think it necessary, and less at this time, to make an amendment to the whole. Of course, it can be improved, and the time will come. And in order to improve the labor legislation that we have, I would like to make two considerations. The first is that we must approach reforms looking to the future and not to the past. Our reference should not be the situation in 2011. We must not go back, since the world has changed enormously since then. We cannot legislate based on the past, but we must look to the future. Secondly, this reform must be carried out within the framework of social dialogue, which in Spain has borne many fruits because employers and unions have a very remarkable capacity to reach agreements. In addition, it must be analyzed calmly and taking into account the importance of legal security to attract national and international investment, absolutely necessary to get out of this crisis and return to the path of economic growth.

What do you think about the minimum vital income that the Government has designed?

Since the beginning of this crisis, I have spoken in favor of introducing a basic income so that no one who has lost their income will be left unprotected in a situation as delicate as the one we are experiencing. In the short term, however, I had my doubts that, in the midst of the crisis and designed at high speed, this was the right time and formula to implement it structurally. But, once it's filed, we must make this rental technically flawless. And, for this, it is necessary to include incentives so as not to discourage the return to the job market or the transition to the underground economy; that the State is closely coordinated with the municipalities and the autonomous communities, that active employment and training policies are included, and, above all, that the results are constantly analyzed in order to adjust what is not working.

How do you think the work culture will change after confinement?

This situation we have experienced has been a surprise digitization test for everyone. Not only have we changed the way we work, but by teleworking we have changed the catalog of products we offer at the bank and, in many cases, the way we provide services. In this period, it has been shown once again that the adaptability, responsibility and commitment of Bankia's professionals are totally extraordinary. It is an immense cultural change, which is also true that it could have occurred because we are in a situation of stress. Teleworking has gone from being a concept to being a reality in companies, and from now on we will be more efficient and surely we will advance in conciliation and flexibility. Work will be more goal-based and personal efficiency and productivity. In addition, it will increase delegation, trust in professionals and the autonomy of each one. However, I deeply believe in the value of the face-to-face and, indeed, we will go to a hybrid between the remote and the face-to-face, but personal contact will continue to be decisive.

During this emergency, the need to protect our welfare state has become evident. How can public-private partnership help to strengthen it?

"This situation we have experienced has been a surprise digitization test for everyone: now we are going to be more efficient and we are going to advance in reconciliation"

The main collaboration that companies can make with society and, therefore, with the welfare state, is to do things well. If we have good results from our activity, we will generate employment and, therefore, we will contribute resources to finance it. As I said before, it seems to me very relevant that the welfare state persists in the future. And to do things well, the responsible management of companies must be promoted. Having a look, a veneer and a responsible transversal process in all companies will align their objectives with the public and, by extension, with those of society itself. The response of private companies in emergency situations can be focused on making decisions that affect their production side and their specific business. But, as a measure of social responsibility, this response must go hand in hand with measures based on values ​​and public needs. When a company sets the word "service" as its goal, it will do its job better, its effort will be more profitable, as will its contribution to society. In this crisis, we have seen that public-private collaboration measures have very good results. Proof of this are, for example, loans with ICO guarantees, in which private banks make the disbursement of financing, while the risk is shared between them and the public institution. Another example of the usefulness of this collaboration is the Social Housing Fund (FSV) created in 2013 with housing provided by banks to assist the most vulnerable families through reduced rents. Currently, it has nearly 4,000 housing contracts assigned by Bankia for social rent. To speed up the concession of these homes, we have agreements with the autonomous communities of Madrid, Castilla-La Mancha, the Canary Islands, Catalonia, the Valencian Community and La Rioja. In addition, when it comes to proposing solutions to get out of the crossroads in which we find ourselves, it is essential that public institutions listen to private ones because they are the ones who are in the day, know the problems and can provide different solutions. But perhaps the area in which public-private collaboration should be most intense is in the area of ​​training, education and employment. The training offer must match the demands of the job market. In our case, the Bankia Foundation for Dual Training is channeling its efforts there, to make the training offer coincide with the needs of companies, and we are achieving very encouraging results. We are convinced that in this way we can improve the society in which we live, fight against social exclusion and advance in the reduction of inequalities. And from a more care point of view, we cannot forget the support to the third sector, to which many companies facilitate the possibility of carrying out training and employability projects for the most vulnerable, assistance to people with different capacities and the elderly, family respite and conciliation… in short, collaborations that become more palpable in critical situations such as the current one and in which the public-private tandem is transcendental.

What do you think about the role that Europe and the European Central Bank are playing? Will this crisis strengthen or weaken the European project?

We must place great value on the contributions that the European Union and the ECB are making in this crisis. They are taking very important steps and mobilizing a large amount of resources to help us face the crisis, both now and in the coming months and years. I cannot imagine what it would have been like to face this situation without the support of the Union. The role of the ECB is being essential. From the first moment, he has made it clear that he is willing to do anything and to put any measure on the table in order to stop the disastrous effects that this crisis could have. It has already raised its Pandemic Emergency Purchasing Program (PEPP) to 1.35 trillion and has extended it until June 2021. This initiative is allowing countries to finance us without problems and will continue to allow it during the coming quarters. The European Commission recently announced an ambitious 750 billion plan, which will be distributed to countries in the form of grants (500 billion) and in the form of loans (250 billion). Let's see how it materializes, since it is still a proposal, but it sounds great and much better than we expected. Furthermore, it would be a first step towards greater fiscal consolidation, something that in recent years had caused great reluctance on the part of most countries, especially in northern Europe. Of this amount, Spain could receive 140,000 million, of which 77,000 million would be in the form of a subsidy and another 63,000 million would be loans to be repaid. But perhaps the most relevant of all this is that Spain will be the main recipient in net terms, that is, the difference between what we are going to contribute and what we are going to receive, with a total of 82.2 billion. Regardless of whether these amounts come with or without conditions, which will surely have some conditionality on how it is invested, we have to do our homework in Spain and return to our path of budget stability as soon as possible. The European Union has so far shown that it makes the greatest progress at times of greatest tension, when it is facing the abyss, and I think something similar is going to happen this time. So I do trust that it will strengthen the European project.

«The public bank seems to me a big mistake. Financial entities must be managed professionally and independently »

Do you think that the coronavirus crisis can hinder the privatization process of Bankia? What would you say to those who are betting on nationalizing the bank?

At current prices and in the current situation, indeed, it does not seem that it is the best time for privatization. In any case, it is a decision that the Fund for Orderly Bank Restructuring (Frob), which is our main shareholder, has to make. Currently, the time frame defined by the Government is that privatization takes place before the end of 2021. We will see, there is still time. Regarding the nationalization of the bank, I have stated in many forums, including the Congress of Deputies, that public banking seems to me a great mistake. I am firmly convinced that financial institutions should not be used as an economic policy tool, and that they should be managed professionally, by experts, and independently. Bankia is the best example of where not doing so led us. And, in addition, it seems to me that at this moment the State has other greater urgencies to which it dedicates its budget rather than buying Bankia shares. This does not mean that there is no room for other types of public entities that do superbly well, such as the ICO in Spain or the European Investment Bank (EIB) at the European level. But it must be clear that these institutions are not commercial banks, unlike Bankia. Bankia is currently a bank managed with absolutely professional criteria and at this moment it is being part of the solution and not part of the problem.

Pablo Blázquez, original article Ethic

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