REYES MAROTO

Spain 2021 | INDUSTRY | VIP INTERVIEW

TBY talks to Reyes Maroto, Minister of Industry, Trade and Tourism, about the Industrial Policy Strategy 2030, the automotive sector, and strengthening the pharmaceuticals industry.

During the Spain Investors Day, you mentioned expanding the Industrial Policy Strategy 2030 as a roadmap to give industry more weight in our economy. What are the main points of the strategy?

For over two years, we have been working to set out an industrial policy that meets the challenges of the 21st century. The pandemic has demonstrated the importance of a strong industry, especially due to the development of industrial capacities and the industrial sovereignty that we now see as vital. What is more, when it comes to economic recovery, industry has shown itself to be more resilient against the pandemic and future crises, and therefore it is something that the country must commit to. Having more industry means betting on the modernization of our economic model and more stable jobs, innovation, and the internationalization of Spanish companies. In 2021, we will set out the basis for these changes, and we have a decade to put them into action.

PGE, together with European aid, will form the basis of the recovery of the Spanish economy, which you predict to be between 7% and 9%, if European aid is included. What current figure is the government operating on in terms of economic recovery?

There are many uncertainties. In terms of the macroeconomic picture, it is difficult for both Spain and international organizations to make predictions. Much depends on the duration of this third wave, although the vaccination process will certainly accelerate the economic reactivation as it starts to pick up speed across Spain and Europe, which is our main export market. The range between 7 and 9.8% is in the official macro table that we presented in November, though it is extremely sensitive to developments. It depends on the pandemic and other uncertainties such as Brexit or the relationship with the President of the US. In this case, Spain and Europe have had conflicts that have generated uncertainty for investors. It is a horizon that will depend heavily on the evolution of the pandemic and whether we can bring an end to it. Spain has a heavily interconnected economy.

In terms of industry, how will the general state budgets be divided up?

We have two major challenges to address beyond the resilience of the sector itself, where the data we have is more favorable than those of the industry itself. The sector is gradually recovering, and we have to accelerate the twin green and digital transitions. There will be a commitment to digitalization so that it reaches SMEs. We have incorporated a plan in which we will include a service portfolio to develop the training of digital skills, including AI, 3D elements, and traceability, and for that it is necessary get the workforce qualified. There will be significant investment in upskilling the workforce across all sectors of the economy. The green transition, without a doubt, is a bigger challenge because we are currently behind other economies. With COD25 and the pandemic, we have set a good pace in the productive sectors. Spanish industries are committed, and we want to generate certainty and a framework for investment in Spain, a predictable framework to give investors a sense of security when placing their bets on us. We are working closely with the industrial sectors and have created a high-level forum to address the passage through the industry, which is the key to generating confidence in investments in Spain. It is a forum that is able to advise public agencies.

Automotive, with a GDP weight of 12%, will receive, according to your statements, EUR10 billion from European funds. What strategy will you follow in 2021 to stimulate the sector?

There is good communication with the sector, and we have dedicated spaces, such as the Automotive Working Group, to maintain that direct dialogue. The government plan is extremely ambitious; we have to make a qualitative leap. We have been leaders in combustion, and now we have to do the same in terms of sustainable mobility, considering those security and connectivity issues. Therefore, what is most important is having a framework, which the Automotive Working Group provides. We have to transition toward a more sustainable mobility model, and these certainties will soon pay off so that Spain can continue to be key player in the European market. Although we take risks in tackling revolutionary changes in the automotive industry, the opportunities outweigh the risks. The sector is mature, and we have to find certainty with projects and legal protection. Spain has been outlining a clear roadmap in terms of regulations. It is based on success, working together, and the belief that the strength of the automobile industry is capable of tackling this revolution and will continue generating wealth and employment for Spain.

EUR250 million was allocated for the RENOVE Plan, and only 20% of it was used. Its closure in December has been highly criticized. Why was this decision made?

The fact that it has been more or less executed is not that relevant. There has been great uncertainty as a result of the mobility restrictions, but it was right to put the plan into place. The results have been heavily conditioned by the pandemic. In 2021, there will still be plans to support demand, and we are working on a reinforced Moves III Plan. We have to sit down with the sector and discuss why the RENOVE Plan was necessary. In addition, the support measures that we approved as part of the Automobile Boost Plan and the ICO Line of EUR500 million that we opened for industrial vehicles has been highly received. Moves III will provide a new boost toward more efficient mobility, and the signs the market is giving us regarding the purchase of hybrid or electric vehicles are incredibly positive. The government is committed to accelerating the development of such electric charging points, and once this is resolved, demand for these vehicles will increase.

What priorities does the ministry have for the rest of the year?

The first is to accelerate the vaccination process. We are working within the government on a strategic plan for the pharmaceutical industry because we want to strengthen its industrial capacities in Spain and develop and produce vaccines and medicines ourselves. In the strategic reserve, we have the production of masks, respirators, and PPE, and we want to position Spain as a leader since the vaccination process will take years. The second challenge is economic recovery and, above all, giving the most affected sectors the impetus they need to leave 2020 behind, which was the worst in history from the point of view of trade, tourism, and hospitality. The more subsidies, the better, though recovery has to be a priority. We want to emerge stronger from the crisis, and this is an important message for investors. It is not about continuing with the production model that we had; we have to improve the business climate and recover mobility and tourist flows, which is key since it is a big part of Spain. It is our window to the world. The crisis has to help us improve what we already have, accelerate our transformation, and reinforce our production model that needs a decisive boost from public agencies. The millions of euros from the Recovery and Resilience Mechanism give us a sense for hope and help us move forward the necessary investments and reforms that we undoubtedly need.