Pablo Hernández de Cos: The case for an incomes agreement in Spain?

Speech by Mr Pablo Hernández de Cos, Governor of the Bank of Spain, at the 50th anniversary of the Faculty of Economics and Business Studies - University of Sevilla, Sevilla, 26 April 2022.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Good morning,

I should like to take this opportunity to share with you some reflections on the current economic environment, which, more than two years after the outbreak of the pandemic, is tragically marked by the invasion of Ukraine. The repercussions of this war, albeit difficult to predict, can be expected to be global and extremely severe, for both the geopolitical and the economic situation. In the short term, its adverse effects on activity and inflation will come through a number of channels, the impact of which will be more acute in Europe, given its greater interconnectedness with the countries at war.

I will first describe the main features of the current economic situation, which is affected by the consequences of the war. Subsequently, I shall analyse the essential features of the economic policy response to the challenges of the war in Ukraine and its repercussions. In particular, I would like to stress the need for a broad incomes agreement for the coming years in Spain, the possible content of which I will detail later on. This need is justified by the initial description of the current situation and outlook for the Spanish economy, in particular as regards inflation.