The session’s debate focused on global geoeconomic challenges, the impact of US policies, and opportunities for Europe in a highly uncertain scenario. In this global context, Europe and the United States face 2025 with divergent but interconnected economic strategies. Moderator Núria Mas pointed out that the economy also has “weapons of mass destruction,” as seen with the policies of the Trump administration, which represent a radical shift in the economic, financial, and commercial spheres worldwide.
Francisco Blanch began his intervention by highlighting the structural differences between the United States and Europe. He noted that American growth has been driven by three key factors: the doubling of public debt, a position of technological leadership, and unprecedented energy expansion. “The US has added 17 trillion dollars of debt in the last ten years,” he emphasized, noting that this has fueled strong growth but also created vulnerabilities, such as high internal inequality.
Regarding productivity, Blanch stressed that America’s great advantage lies in capital efficiency and technological innovation: “It’s not that Europe has worse labor, but that the US has invested more and better in capital and technology.” He also highlighted the country’s capacity to generate energy: “They have produced 60% of global oil growth and 35% of gas growth. In contrast, Europe’s energy production has declined,” although efforts have been made to compensate with renewables, with mixed results.
This orientation has led to American specialization in sectors such as chemicals and digital information. “90% of the added value in the information sector comes from the internet and digital technologies, not books or magazines,” he explained. Although Europe is also advancing significantly in pharmaceutical leadership, health, and the aerospace industry. However, he warned that the US dependence on energy-, technology-, and capital-intensive sectors has created a kind of “disease” that could lead to structural imbalances.
Tariffs, immigration, and tax cuts
Pablo Hernández de Cos agreed with Blanch’s diagnosis and emphasized the low productivity of Europe’s technology sector as a key factor in the growth gap. He analyzed the policies announced by Donald Trump in his second administration and classified them by impact: “Tariff increases —fewer products arriving— and immigration restrictions —less labor— are negative supply shocks that lead to lower potential growth and higher inflation. In contrast, the tax cuts promised by Trump could be a positive demand shock.”
Still, he warned that expansive fiscal policy cannot always be offset by spending cuts: “Tax collectors and finance ministers almost never fully compensate for a tax cut. This creates deficits and more inflationary pressure.” In parallel, he pointed out that excessive deregulation of the financial sector, while it may boost short-term credit, “seems like the seeds of a new crisis.”
Joint investment policy
From a European perspective, Hernández de Cos advocated for more integration to face a potentially de-globalizing world. He cited data from the International Monetary Fund equating internal barriers to tariffs of 40% in manufacturing and 110% in services: “Removing these barriers may be more effective than fighting those of the US.” He also called for a joint European investment policy: “There are projects that will only be efficient and sufficient if financed jointly.”
Regarding the future of the euro, he considered it crucial to advance in creating a European safe asset to strengthen its role as a reserve currency: “The market will only fully trust the euro if it sees a solid institutional architecture, with a deposit guarantee fund and a true capital markets union.” According to him, these reforms could help Europe gain weight in a multipolar world.
European energy crisis
In his second intervention, Blanch delved into the consequences of the European energy crisis caused by the war in Ukraine and the rupture with Russia: “We have permanently lost 16% of industrial gas demand. We want to reindustrialize and make tanks, but without Russian energy or metals, it is very difficult.” Therefore, he advocated for a less dogmatic and more pragmatic policy: “We need energy storage, not just consumption reduction.”
Regarding raw materials, he pointed out that the market is already reacting to geopolitical uncertainty: “The global market value of gold is approaching US public debt held by the public. That says a lot.” He also showed optimism regarding copper, key to the energy transition, and warned about the environmental limitations of liquefied gas and Chinese batteries: “Our solar panels may be clean, but they are manufactured with coal energy.”
To conclude, the speakers shared recommendations for Spanish companies in a highly volatile context. Hernández de Cos defended resilience as a strategy: “In an uncertain environment, robust companies are needed, as we have demanded from banks.” Blanch complemented this by recommending active risk management through derivative markets: “The euro can rise to 1.30 or return to parity. Interest rates can plummet or soar. You need plans for everything.”
Session moderated by Núria Mas, board member of the Cercle d’Economia
Francisco Blanch, Managing Director of Bank of America
Pablo Hernández de Cos, incoming Director of the Bank for International Settlements
