Teresa Garcia-Milà (Economic Circle): "In housing, there is a supply problem at all levels."

Teresa Garcia-Milà (Barcelona, 1955) has been the new president of the Círculo de Economía for less than a month. She is the first woman to head this organization, founded in 1958 and which brings together Catalan businesspeople, executives, professionals, and academics.

Director of the Barcelona School of Economics (BSE) and professor at Pompeu Fabra University (UPC), she is also a board member of Repsol and chair of its audit committee, as well as an advisor to the Ministry of Economy, Trade, and Enterprise, among other responsibilities. She previously served on the boards of Enagás, Vueling, and Banco Sabadell.

The new phase will be one of continuity, as Garcia-Milà was already a member of the previous board , and will follow up on the latest projects of Jaume Guardiola's term, such as the productivity working group.

On this issue, Garcia-Milà points out that Spain's current business structure makes it "more difficult to gain productivity." "If you compare companies of the same size, productivity is the same as in other advanced European countries like Germany or France," he emphasizes. "What's the problem? We have more small and medium-sized companies, which would need to gain size to be more productive," and gives the following example: "Barcelona has a large number of technology startups, but it's difficult to make the leap to scale-up or unicorn status."

The economist is also concerned about social issues, such as housing prices. "The policies currently being adopted are not the most appropriate to improve the situation: there is a significant supply problem at all levels," she says.

"The remedy is worse"

In his opinion, public action should be directed toward the provision of social housing, but he believes that rent controls have gone too far in the free market. "This is accompanied by a situation of limited legal certainty regarding squatters and non-payments, which has always existed and, together with the rent cap, is causing supply to decline," he emphasizes.

According to his diagnosis, the cure is worse than the disease, with a worsening problem that is no longer just the price of rent but also access to rental housing on the open market.

Regarding energy, where Catalonia lags behind other regions in renewable energy, Garcia-Milà advocates extending the life of nuclear power plants as long as "we can't replace them with another type of energy ." "It allows us to have a less stressed contribution from renewables," he emphasizes, referring to the blackout of April 28th.

Teresa Garcia-Milà believes that the lack of parliamentary majorities in the government, the Generalitat (Catalan government), and Barcelona City Council is a slightly more complicated situation to manage, but not unusual in other democratic countries. Regarding the new cycle that has begun in the region once the period of greatest confrontation over the independence process is over, the economist says that "great stability" has been achieved and that we must continue working not only to bring back the companies that left, but also to bring in new ones.

At the international level, the president of the Economic Circle believes that the tariffs announced by US President Donald Trump "break" the international agreements on which multilateral trade has been based for the past few decades, also introducing significant uncertainty by imposing tariffs on certain countries and then removing them or setting deadlines for negotiations and then changing them.

"This prevents companies from planning and holds back investments and strategic decisions, which slows economic growth," he warns. Garcia-Milà believes this strategy will lead to higher prices in the US and will ultimately affect American consumers.

"It is surprising that the government has not dared to assume ordinality."

Similar to what Catalan business organizations such as the Foment del Treball and Pimec (Spanish Association of Employers' Associations) and the Chambers of Commerce have done in recent days, García-Milà sees positive aspects in the principles of the new "bilateral" financing model for Catalonia that the central and regional governments presented last Monday. However, he believes there are points where the text falls short.

"The pact is a step forward in some respects: it's positive that we've moved from an agreement between parties to an agreement between governments that reflects the basic characteristics of the initial pact," he says. "It's also very significant that the agreement between governments includes an explicit reference to expanding the regulatory capacity of the autonomous communities ," he explains.

However, he believes that the document represents "a step backwards in relation to ordinality, which is now included only in the preamble and is not part of the agreement." "It is surprising that the central government has not dared to embrace the principle of ordinality, a matter of consensus in the academic world, and one that would benefit not only Catalonia but many other regions," he emphasizes.

Another of their demands is greater specificity "in the percentages of tax participation" of the different administrations. This demand is "a key point in resolving the current vertical imbalance ," and addressing it "would allow all communities to have more resources, overcoming the dysfunctions of the current model."

"We also need a specific timeline to expedite the rollout of the new model," he adds. Garcia-Milà points out that the Círculo de Economía has long emphasized the need for new financing. It did so in a 2018 opinion piece and addressed this demand again last March.

His proposal is "a federal model in which the tax base is shared, and therefore communities have responsibility not only for spending but also for revenue, designing and collecting their own taxes." "Each level of government would collect the taxes it owes, and from there, solidarity would have to be defined based on the principle of ordinality ."

Banco Sabadell

The Economic Circle has rejected BBVA's hostile takeover bid for Banco Sabadell because it would further concentrate decision-making centers in Madrid and also reduce competition. It was at its last meeting, held in early June, that the government announced the call for a public consultation, after which it decided to refer the operation to the Council of Ministers and establish new conditions.

This week, the European Commission opened infringement proceedings against Spain, arguing that the laws used to evaluate and condition the takeover bid violated several EU regulations. "This is a process that has just begun" and "can be resolved in different ways, so it will be important to closely monitor its progress."

"At the Círculo de Economía, we responded to the public consultation arguing issues of general interest," he recalls. "The National Commission on Markets and Competition (CNMC) did not adequately assess the consequences this merger would have on medium-sized companies, which would be seriously affected if one of the four main banks disappeared from the ecosystem," he points out.