This coming Tuesday, May 26, the fifth El Económico forum will be held at Palma's Palacio de Congresos. Challenges of geoeconomics will be the theme, and one of the speakers will be Gonzalo Bernardos, professor of economics at the University of Barcelona and one of Spain's leading economists.
His presentation will be entitled 'The Age of Uncertainty', and he is clear as to how security in Europe has been disrupted by unease. "With the arrival of Donald Trump, who disregards international consensus and generates uncertainty. Add to that Putin, who wants to repair the fall of the USSR and return to the Old Regime, and a Europe that acts like a spoiled, traumatised, and disoriented child because it will have to defend itself alone. It's a tremendous failure for Europe, especially under Angela Merkel.
"I've been saying for many years that she left a disastrous legacy. Germany lost its industrial leadership by betting everything on electric vehicles; closed nuclear power plants and became dependent on Russia. Furthermore, it implemented austerity policies that harmed many European families. It turned Europe into a theme park by obsessing over saving the planet while other countries gained competitiveness.
"Europe can reverse the situation by changing the rules of the game. China thinks long-term and strategically protects its sectors. Europe has been naive, trusting in the free market while other countries subsidised and shielded their industries. This is how we have lost technological and industrial ground."
Turning to the Balearics specifically and the service-based economy, he believes the islands are better prepared than other regions to face the effects of the Middle East crisis.
"The Balearics have a great asset - the specialisation in tourism. And tourism will continue to be one of the major sectors of the 21st century. My impression is that some people complain just for the sake of complaining and criticise the dependence on tourism, but I always say the same thing: the important thing is not to diversify for the sake of diversification, but to specialise in what is successful."
Bernados doesn't feel that tourism will suffer because of international uncertainty.
"After the pandemic, it became clear that people weren't giving up on travelling. Meanwhile, destinations in the eastern Mediterranean, such as Turkey, are now generating more uncertainty. This benefits safe destinations like the Balearic Islands."
Much has been said about the post-pandemic 'champagne effect' having come to an end - by the complementary sector of restaurants, etc. and by the hoteliers. Bernados accepts this, but only up to a point. "It's clear that the extraordinary increases in occupancy won't be the same, but they will still have more customers and earn more than the previous year. Tourism will continue to grow.
"Reducing seasonality is the biggest challenge. There are islands and areas where there is practically no activity between November and April. The example to follow is Benidorm, which has tourism all year round."