Spain, One Of The Two Most Attractive European Destinations For Investing In 2013, According To Morgan Stanley

Spain and Switzerland appear as the two most attractive destinations for investment in Europe, according to the ranking drawn up by Morgan Stanley analysts. The U.S. bank highlights the progress of the Spanish economy, which obtains the second highest rating among the 16 countries surveyed.

“The good classification of Spain mainly reflects its high score in terms of technical level and revenue and profitability,” point out the authors of the list, in which Spain has gone up two positions from the previous year, achieving the highest rating for a country at the periphery of the Eurozone since the third quarter of 2009.

In fact, Portugal (13), Italy (16) and Greece (14) continue to appear among the bottom five positions, accompanied by France (12), which has lost five places, and Belgium (15), which has also dropped five positions in relation to the previous ranking. Meanwhile, Ireland has gone up two and is ranked as the tenth most attractive destination.

Among the factors that determine the attractiveness of Spain, the organization highlights the improved tone surrounding the periphery countries, which could become one of the surprises of 2013, in their opinion, thus obtaining a better result than their partners in central and northern Europe.

To this effect, Morgan Stanley analysts believe that the relaxation of the risk premium of peripheral debt and the narrowing of the GDP growth differential between European countries, contribute to a less negative perception for countries at the periphery.

Rajoy Optimistic Over Spain’s Future

Following the Spanish Government’s last Council of Ministers meeting of 2012, Prime Minister Mariano Rajoy took stock of his first year in Government, saying “we must persevere in the reforms we have undertaken”, and asked for “comprehension and solidarity” from citizens in order to overcome the economic situation, and stressed that “we will exit this crisis sooner rather than later”. Rajoy explained that to offset the imbalance that existed in the public accounts it was necessary, right from the start, to adopt extraordinary measures that were “painful but fair” in order to reduce the deficit.
However, Rajoy underlined that as a result of approving the Budgetary Stability and Financial Sustainability Act “we have laid the foundations for avoiding the occurrence of a similar situation in the future”.
Together with the emergency measures adopted, Rajoy stated that “the most ambitious and intense agenda of reforms of the last few years has been undertaken in Spain”. Of these, the Prime Minister made particular mention of the restructuring of the financial sector and the labour reform.
Rajoy stressed that the objective of this raft of reforms implemented by the Government is, “to lay the foundations for the stable and sustainable growth of our economy in the future”. In this respect, he said that if these reforms had not been undertaken, “Spain and the Spanish people would now be in a considerably worse situation”. He also said “we still have a very tough year ahead of us, particularly the first half”, since the Spanish economy will remain in recession for some time to come, “although we expect to see an improvement in the second half of 2013″.
Rajoy praised Spanish society for the way in which it is facing up to these times of crisis, and particularly acknowledged the sacrifices made by civil servants and pensioners. He called for “comprehension and solidarity” from the people: comprehension to apply measures “that no-one likes but which are essential” and solidarity to “understand that we all need to bear part of the common sacrifice to overcome our problems”.
Rajoy went on to say, “we must avoid everything that distracts us from our two major objectives, of exiting the crisis and creating jobs”. “All our energies must be focused on that which unites us, which makes us stronger, which allows us to resolve our difficulties together”, he said.
In response to questions from the press, the Prime Minister reiterated that the government does not intend to ask the European Central Bank to intervene to purchase bonds on the secondary market, but considers it to be a very useful instrument available to those countries that need it. “At present we have no intention of requesting this but we don’t discount doing so in the future”.
As regards reducing the deficit, Rajoy asserted that “no country has ever been asked to do so much during a situation of recession and with the financing problems that Spain has”, and pointed out that the European Commission will not request additional measures for 2012 and 2013.
Rajoy announced that it is not his intention to raise VAT in 2014 but that this depends on how events unfold. He said he also intends to return Income Tax to its previous rate and hold a debate with the Toledo Pact, at the beginning of the year, on the sustainability of the pension system. “We will hold an open debate on the pension system. We have no intention of further raising the retirement age”, he stressed.
After commenting on a number of other issues, Rajoy went on to announce some of the measures and reforms to be adopted by the Government in 2013, among which he cited those relating to the public administration services and those designed to drive credit towards small- and medium-sized enterprises (SMEs).