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Letter from... Madrid

05 June 2020

By F. Javier de Mendizábal Castellanos CEO, ACH (Part of SEC Newgate)

If I had to pick a word to define the situation it would be Confusion. Yes, confusion, the state of being bewildered or unclear in one's mind about something. Because most of the people don’t really know what did exactly happen and, of course, are clueless of what’s yet to come.

In the cover of the Financial Times on June 3rd, you could read the following headline: “Flawed data casts cloud over Spain´s lockdown strategy. Erratic numbers create uncertainties for policymakers and the public”. Unfortunately, that’s correct. As of today, the Government reported that casualties due to the Covid19 pandemic stand at 28,000 but, on the other hand, the deaths reported by the INE (Instituto Nacional de Estadística) stand at 44,000 (figure which matches the death toll reported by Spain´s Autonomous Regions). Let´s not even discuss the number of people deemed infected.

And the confusion is not only in terms of deaths, but also in terms of the measures taken by the Government in relation to travelling restrictions (or lack of…) among the different regions of the country but also whether and when our borders will open, which is key for Spain's largest industry: tourism. And we are just 25 days away from the most important months for our tourism industry: July-August.

Similarly, we don’t have very good news in another key Spanish industry: car manufacturing. Nissan has announced the closure of its Barcelona plant due to take place this year, which means that 3,000 people will lose their jobs and, indirectly, another 20,000 will be affected. And this is just an example, as unemployment rates are growing rapidly at a national level throughout industries.

That’s what’s going on....but, not everything is bad news. Right now you can see the soul of the country in all of the bars and restaurant terraces which are completely full and next week most of the country will be in phase two or three which means that hotels and restaurants will be partly open. Remote working is now an option in lots of companies and it is working quite well, which means that the country is prepared for this new era. Plus, our health, distribution, agriculture, transportation and delivery sectors have done tremendous work.

So, hard times, but don’t forget this is the country where you can have everything under the sun. We’ll keep it up!