News© Institutional Communication, 02/08/2010
Domingo Cavallo: “Spain needs to figure out how to recover its competitivity and how to increase its savings”
While at the University of Navarra, the Argentinean politician and economist Domingo Cavallo stated that investing in research and development could make way for a period of growth.
Former Minister of Economic Affairs Domingo Cavallo
Photo: Manuel Castells
Former Minister of Economic Affairs for Argentina, Domingo Cavallo urged Spanish authorities to look for real, concrete solutions to the high debt problem in the country so as to avoid the serious economic, political and social consequences which could follow if things do not change. “Just like Argentina, Spain developed a debt problem during its period of economic prosperity,” he said during a conference at the School of Economics and Business Administration of the University of Navarra.
He continued to say that “Spain has to figure out how to recuperate its competiveness and increase its savings. It is imperative for Spain to think of a realistic, feasible way of solving the problem of excessive debt.”
Cavallo outlined the changes that would be necessary for model economic growth. “Spain has to allow some traditional activities to lose importance in addition to being more prudent about spending money on construction and real estate,” he explained. He also stressed the advantages of investing in research and development for enabling a period of growth.
“Thanks to its education and research, this university is advancing along the right road for sustaining and propelling its growth. This is what Spain and many other countries need to do as well,” he stated.
Relative cost stability; a positive aspect
One of the positive aspects of the Spanish economy is the relative price stability. “Inflation is harmful for the economy. It’s a disease with very negative social and economic consequences; it’s the institutionalization of lying in the economy. It essentially means signing a contract, agreeing on the value of a certain currency, and then putting it into effect with another value.
Domingo Cavallo was the Minister of Economics for Argentina from 1991 to 1996 and again in 2001. In 1999 he was the presidential candidate representing the political party “Acción por la República;” a party which he himself had founded. He is currently Chairman and CEO of DFC Associates LLC as well as honorary president of the “Fundación Mediterránea,” where he created and directed the research institute from 1977 to 1987. He is also a member of the Spanish Royal Academy of Moral and Political Sciences and of the “Grupo de los Treinta.”
Domingo Cavallo is the author of the following books: “Volver a crecer” (1984), “El desafío federal” (1986), “Economía en tiempos de crisis” (1989), “La Argentina que pudo ser” (1989), “El peso de la verdad” (1997), “Pasión por crear” (2001) and “Estanflación” (2008).
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