Notes From Felipe Gonzalez’s Lecture In Brussels

One of the problems with blogging is the speed at which communications can now be transmitted. I know that this is meant to be the major strength of blogging - but if you happen to busy, it simply makes you look slow!

This time last week I was fortunate enough to attend a one hour lecture by Felipe Gonzalez, former 4 time Prime Minister of Spain. The event was organised by The Lisbon Council in Brussels.

I have to say that Gonzalez was both a fascinating speaker and very difficult to follow. Looking back at my notes, I have made some incredibly insightful observations. At the time, they didn’t seem to be particularly insightful - and of course, they were not my observations…

In the main, he spoke about the financial crisis and the impact that it is having. His speech - or at least my notes of it - relate to competitiveness, the impact on the social model of Europe and solutions to the crisis.

I shall try to make the notes into a legible form here - please accept my apologies if I fail…

Mr Gonzalez feels that before the financial crisis Europe was losing ground in terms of global competitiveness. We Europeans cannot compete on labour costs with much of the world and it is questionable whether we add enough value or technical improvements to justify the higher wages. This lack of global competitiveness is risking the European social model.

This loss has created what he called “sweet decadence” within the EU. The EU has been losing relevance on the global stage and this reduces the impact it can have in decision making processes. This is a structural problem.

He believes that most governments are not actually responsible for the financial crisis, though they were mostly complicit in some small way individually. But now that the credit crunch is here and recession is biting, they are unable to react well at either a local or national level. Without cohesion, he believes that it will not be possible to fix global markets.

He also feels that sooner or later we will need to bail out individual nations. If this is likely to happen, why postpone it? Delaying such decisions will likely cost more in than the future than now - so why aren’t we fixing them now?

He used the word ‘gargantuan’ (or at least his interpreter did) on a number of occasions when talking about the scale of public debt. You don’t normally hear politicians use such strong language as that - even politicians no longer in office.

All in all, it was interesting. He is clearly a very intelligent and thoughtful man.