European Economy and Industry of the Basque Country
Following the convergence criteria established in the Maastricht Treaty on 10-11 December 1991, Spain joined the third step of the Economic and Monetary Union (EMB) together with ten other states. The accession of Great Britain and Denmark is hereinafter envisaged, as set out in the annex to the protocols of the Treaty of the European Union (TEU).
This decision has a great impact, especially in the economic field, so it is necessary to limit the debate to the Basque industry. However, four basic general mentions are necessary.
First, economic science does not have the means to reliably predict the consequences of the implementation of the Economic and Monetary Union, much less if the analysis is limited to a state. The valuation will be even more doubtful as the territory is shrinking, such as when it is confined to the Autonomous Community of the Basque Country. On an equal basis, everyone agrees that the overall benefits for all participating States will be higher economically than the drawbacks.
Secondly, that the RMO not only does not guarantee significant economic growth or well-being, but will fundamentally depend on the adaptive capacity of the public and private sector. In no case will the OMR guarantee a balanced territorial distribution. Moreover, many analysts fear that goods will focus on the Franco-German axis.
The third mention is very important because, to the extent that states lose (or almost lose) sovereignty to implement economic policy, they can tend to cover the loss and reduce wages and social welfare to maintain the level of competitiveness, a decision that will have social consequences.
Finally, it is worth mentioning that there is no adequate alternative to the incorporation into the EMB, since the foreseeable inconvenience can be serious, especially in the Spanish economy, which is not used to self-control.
Spain and Portugal became members of the European Economic Community in 1986, recognizing the operation of the Association for 30 years (Community heritage) and dismissing tariff and foreign trade policy. Soon after, on 1 July 1990, the steps were taken to create the European Single Market.
The experience after this long decade has been nothing positive; the loss of employment has been important, especially in the industry, which has meant a remarkable increase in the unemployed population. On the other hand, it should not be forgotten that the share of the European Gross Domestic Product in Spain has been reduced from 6.22% to 5.9%, although it has advanced from the 12 Member States (from approximately 80% to 90%).
At the same time, and especially since 1990, companies in the Basque Country have made a great effort to adapt to the new needs of products and the market, strengthening their external relations (although they are still small) and internalizing them internationally, although the deep conversion is an outstanding task.
The industry in the Basque Country has ten years of survey, although it is not so entrenched. However, few but important societies have adapted to the new context.
These are the following:
- Small businesses.
- Comparative deficit in management.
- Little evolution of products, especially those that will have a great demand in the future.
- Small international participation of our company, which does not reach the level of export of other advanced territories of our size.
- Shortage of services.
- No adaptation of the Educational System to the needs of the company.
- General state of inadequate infrastructure.
- That the political and social environment is not the most appropriate.
This is the situation in which the implementation of the single currency begins, the EURO, which, as already mentioned on several occasions, poses new challenges and opportunities. The challenges include the disappearance of devaluations, which will entail the economic costs of their implementation (computing, administrative systems, etc.). for it shall be great among all. The loss of public aid can also negatively affect certain activities.
However, the impossibility of evaluating the currency can be the most important in the future, since the tool used to recover the competitiveness of companies is lost. This new situation, and it does not seem that any other alternative system will be implemented, is a solid test for our entrepreneurs, even though they are accustomed to competing equally with anyone in the world.
However, this has advantages such as the reduction of uncertainties in general and exchange rates in particular, low and stable inflation and the best price of money. The greater transparency of markets, which would also facilitate decision-making, and the reduction of transaction costs, as well as the simplification of documentation for international relations, will also be an important advantage.
The Economic and Monetary Union will generate changes and improvements for our companies, both in the general context and in the conditions they will have to develop, which will require, first, a cultural and administrative adaptation and then new forms of management. However, it is surprising that the implementation of the EURO can have, and that it will have consequences, both strategic and operational, that at present the subject of reflection is exclusive to large companies and does not extend to small companies.
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