Antoni Cañete


“We live in a false reality, because storm clouds are gathering”

The head of the confederation of SMEs in Catalonia warns of major changes in the economy that will lead to the closure of many companies while also creating new business opportunities

“Firms will only be able to finance themselves by delaying payments” “WE NEED TO READ THE CHANGES TO TURN THEM INTO OPPORTUNITIES”
How are Catalan SMEs doing?
Generally speaking, SMEs have emerged from the pandemic with certain mechanisms that allow them to continue their business activity, but it has been done in such a way that some companies have little viability. Firms are affected by the current situation of rising commodity prices, soaring energy prices and a lack of supplies. There are those that are doing very well, that have shown resilience and been able to overcome it. But there are others that, while still in business, do not have a clear idea of the changes that will take place.
For example?
The thing with the economy is that we’re in a false reality because storm clouds caused by this situation we’re going through right now are gathering and will bring changes that we will have no choice but to face.
What are these threats?
One is liquidity. Companies have applied for ICO loans [from the government’s Official Credit Institute] worth over 140 million euros, 90% of which have gone to SMEs. But these loans have to be repaid and many will be renewed. Yet the renewal of these debts will not be like previous ones, because now when you renew an ICO loan, financial institutions will classify the company as being under financial oversight or insolvent. It’s like making someone choose between a fright or death; obviously everyone chooses a fright because no one wants to die but the moment the financial institution classifies you as insolvent or under financial oversight, this conditions the viability of your company and is a death sentence. In addition, the moratorium on bankruptcy law is now ending and when a company becomes financially unviable and enters into loss, it must be declared bankrupt.
So the borrowing hasn’t been good?
We’ve become accustomed to a monetary policy aimed at getting over the financial crisis, which is all about borrowing at zero interest. However, once inflation begins to rise, there’s no other solution but to also raise the interest rate to correct it. So we’ll find ourselves with high inflation, rising interest rates, rising debt and rising commodity and energy prices. With all this, companies will no longer be able to pass on the extra costs to the consumer, because the market will not accept such large price rises and so the company will lose margin and liquidity. By the time all of these variables occur, we’ll be witnessing business closures. And the only way firms will be able to finance themselves will be to delay payments. In economics, this is called breaking the payment chain and causing structural problems. I am very pessimistic.
And when could all this happen?
I think all of these variables will likely begin emerging in the autumn. We’re in a very important time of demand right now because we’re coming out of a situation where some savings have been generated and people want to go out and enjoy themselves. And this has caused sudden major demand. Yet the demand we’ve been seeing does not come with the same profitability we’ve experienced until now. Restaurants, for example, have been working like never before and yet there’s less money in the cash register at the end of the day, which means they have less liquidity and so in the long run opening will mean losing money and all this will have an impact on the weakest firms. Those without the volume and financial capacity will have a bad time, logically.
But we always hear that bad times also bring opportunities.
Many second chances can come out of it. We need to start thinking about how we handle the situation, because there is a series of changes on the way that can bring a lot of opportunities. What we need to do is know how to read them. There will be a need, for example, to relocate companies and many suppliers. After what’s happened, everyone is starting to realise that you can’t have a supplier 4,000 kilometres away, because you can’t control the supply. So this will lead to the need for local suppliers and the effect of proximity will lead to a different reality. What’s more, if before the pandemic bringing a product from China meant paying the cost of the product and transportation, from next year there will also be a carbon tax and therefore the price will change.
Give us an idea of how the economy is doing in each of Catalonia’s regions.
Lleida, for example, is seeing a significant impact on the primary sector from rising costs and weather affecting crops. It’s a sector of small businesses that do not get the media attention that other sectors do. Another issue is the “Aragonese Strip” because companies in Aragon have seen economic activity growth of 8%, while in Lleida it has only been 3%. From the point of view of the airport, Lleida Airport has very specific features, as it has terrain that almost no other airport in Europe has, making it a candidate for a cargo and logistics airport.
What about in Tarragona?
Tarragona is closely aligned with the issue of energy, as we produce over 80% of our energy from the nuclear plants in the area, but they will be shut down and that will have an effect. And so we should work on the issue of energy transition but that is not happening. The port of Tarragona has a lot of potential, as does tourism, which I think has real prospects if the necessary infrastructure is put in place to maximise the considerable power of the sector. Tarragona has a clear problem of infrastructure and especially of communication and so that needs attention.
And Barcelona?
Barcelona has massive potential, especially the metropolitan area, and it must turn the coming changes into opportunities. We’re in a phase of redefining the changes that are taking place in the world, and the Catalan capital is such an important driver for the country, so we must know how to react to its transformation. Barcelona ,has conditions that make it a magnet for talent and dynamism, due to its location and infrastructure, such as the port and the airport. All of this is great, but we need to read the changes to turn them into opportunities.
And what about Girona?
It has more potential than we might think. Girona has conditions that make it strategic in many areas. It is one of the best cities to live in, and the ways in which Girona could be promoted is an attraction that could provide many opportunities that we are not yet even aware of. Yet the province is very dependent on the tourism sector and has felt the impact of the crisis caused by the pandemic. We must approach tourism with a different vision than we have so far and that means maximising what we can offer the visitor, because Girona not only has sun and beaches but also an inland area and a city for shopping. Work also needs to be done on the issue of the airport, because it’s been very dependent on a single company, while it’s also necessary to deal with the issue of connections that could generate activity. The master plan already provides for a high-speed train link at the airport, and so Barcelona will be 25 minutes away. We need to recognise Girona airport as a key piece in the puzzle.
What about the difficulties the tourism industry is having to find workers?
During the pandemic, many people working in the hospitality industry lost their jobs and moved to other sectors. And as this is a sector in which you have to work on weekends and at unsociable times, those who have found other jobs with better working conditions have not gone back. The problem is that 12.9% of Catalonia’s workforce is unemployed and yet we can’t find people to cover these jobs. We’re doing something wrong. The sector needs to develop conditions that make it attractive and with higher salaries. Yet recently, the shortage of workers has not been limited to the tourism sector.

interview business

Public, private and institutional

Born in Barcelona in 1963, Antoni Cañete is an industrial engineer who graduated from the Polytechnic University of Catalonia (UPC) and teaches intermediate and higher professional training courses. He is the president of Pimec Catalonia and also first vice-president and spokesman for the Conpymes SME association. During his career, he has worked in the public, private and institutional spheres. In the public sphere, he was an associate professor at the Institute of Education Sciences of the University of Barcelona, the Autonomous University of Barcelona and the Polytechnic University of Catalonia, as well as working at other institutions, including the Barcelona Chamber of Commerce. In the private sector, he was the managing director of the consortium of manufacturers of electrical equipment, Cofme SA, while in the institutional field he is a member of the governing board of the ACC10 business promotion agency.

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