Executive summary of the director of Paradigmes
Executive Summary, Issue 2, Paradigmes magazine, chang

Llarch, Enric

Revistes Catalanes amb Accés Obert

The idea guiding this Paradigmes monograph stems
from the intensity, singularity, range and speed
with which the current crisis broke out. Therefore,
the dilemma we have posed to all our authors is if
we are in front of a simple change of cycle within
traditional oscillations of the capitalist system and
market economy or if change is deeper and we are
heading towards an outright change of productive
and overall development model – related to the
Catalan, Spanish, European and global level.
Our authors agree in that it is not a mere circum-
stantial oscillation, though their views on the extent
and depth of changes differ. However, there is more
unanimity among authors dealing with Catalan and
Spanish economy in stating the additional severity
of our situation and in advocating deep changes 
in our economic model to successfully overcome
the current situation in order not to enter a long
depression.
Another point in which recommendations by most
authors agree is tackling global problems out of
global perspectives and instruments, a recommen-
dation regarded always with a slight degree of
scepticism.
In the first block of the monograph, titled Big
trends, we have tried to identify those general
movements the big and slow transformation
processes in the global economy have been made
of for some years. Hence we have been dealing
with the subject of energy in articles by Mariano
Marzo from the University of Barcelona and the
EU Energy Commissioner, Andris Piebalgs. Mariano
Marzo points out that the recent bearish trend of
energy prices is just circumstantial and the current
energy consumption scheme based on fossil ener-
gies will lead to an unavoidable price increase and
supply crisis in the medium term, unless true un-
derstanding between the big energy producers and
consumers is reached to the benefit of both. Piebalgs
gives an overview over the energy policy of the Eu-
ropean Commission in recent years and concludes
that the current crisis must not carry about a refor-
mulation of the European policy in this area but its
acceleration.
Òscar Mascarilla from the University of Barcelona
does an exhaustive analysis of the commodity mar-
kets, which right now encompass basically energy,
raw materials and food. To the author, price volatili-
ty derived from massive capital input looking for
quick and high profitability can only be terminated
out of agreeing on worldwide common policies in
all these areas.
To Francesc Castañer from Nestlé, it is this specu-
lative distress, deepened by biofuel production
subsidies, what can carry about lasting consequences
for the most helpless in the world.
Frederic Ximeno from the Catalan Department of
Environment believes that the environment is the
way to change the current economic model. In his
opinion, a process of knowledge, social awareness
and embracing of environmental issues, especially
climate change, by economics is crystallising now.
Salvador Alemany from Abertis and the Cercle
 d’Economia believes that internationalisation of
companies cannot be a mere reaction to oppor-
tunistic moves on the search of bargains, not even
in times of crisis as now, but there needs to be a
Change of cycle or change of model?6
Executive summary
Change of cycle 
or change of model?
ENRIC LLARCH
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long-term vision based on a strategic growth ra-
tionale. To Alemany, legal security and collaboration
with non-industrial local partners are some of the
keys to success in internationalisation.
Joan Tugores from the University of Barcelona
deals with emerging economies and states the
need and the difficulties in reducing internal in-
equalities to reorient economies very geared to 
foreign markets in recent years and needing now
the push of internal demand and consumption. He
also points out that productive models so intensive
in their use of energy and raw materials having a
devastating effect on the environment may become
unfeasible.
To close the block on big underlying trends, Stephen
Castles and Simona Vezzoli from the University of
Oxford state, besides advocating new ways of inter-
national migration governance, that migrants can-
not serve as a safety valve for developed economies,
by providing labour in times of expansion and going
away in recession.
In the second block, called The current crisis, we 
intend to offer a systematic description of an-
tecedents and mechanisms that triggered the crisis
in its different aspects, especially real estate and 
finance. Francesc Cabana, a lawyer and economy
historian, makes a historical and comparative ap-
proach based on previous crises since the 1929
crash. To him, all crises have in common that they
are a reaction to errors made in economic policy,
which are different for each case. In the current cri-
sis, the efficacy of collaboration between countries
and international economic institutions will be put
to the proof for the first time.
Antonio Argandoña from IESE sketches out the
macroeconomic picture that led to the real estate
and financial crisis. He believes that in order to 
create a bubble, new opportunities triggering a
price increase of any asset are needed, apart from
abundant liquidity and low interest rates: this is
usually possible thanks to some financial innova-
tion. In this case, it was the climax of subprime
mortgages, securitisation and the development of a
«shadow» financial system. Xavier Cuadras from
the International School of Trade, and a member 
of the Paradigmes Publishing Council, analyses the
Catalan and Spanish financial system and expects
liquidity problems to come up, but he believes that
they will not be of systemic nature and concentrate
on a relatively small number of institutions.
Gonzalo Bernardos from the University of Bar ce -
lona analyses what he calls the «first global real 
estate bubble». In his opinion, recovery requires
first to stabilise the main residential markets of the
world to properly quantify the loss of financial in-
stitutions from deterioration of these assets. Antoni
Gurguí and Jaume Angerri from the Catalan De-
partment of Innovation, Universities and Enterprise
highlight in their turn the specificity and additional
severity characterising the crisis in Catalonia and
Spain. One of the main causes for this situation is
the imbalance between wealth creation and expen-
diture, an imbalance that shows in differing infla-
tion and foreign deficit combining lethally with
stagnation of productivity.
The impact of the crisis is the third block of this
monograph. Joaquim Coello from Applus is one of
the most conclusive authors: the current change of
cycle is so deep that it inevitably leads us to a
7paradigmes /  Issue no. 2 / June 2009
According to Antonio Argandoña, the real estate, the building and the finance
branches will need to come back to a more sustainable size. It will depend on
the structure and circumstances of each country, but especially on their ability
to generate entrepreneurial initiative and flexibility to move resources to future-
minded areas if other industries will take over. Hence the importance of
structural reform: competition, deregulation, labour market flexibility, fostering
human capital and innovation, etc.
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change of model. However, this change requires
time as solutions need to be set out and agreed not
only at branch or national but also at global level,
and this requires negotiation and consensus to
reach a balance valid for all stakeholders.
To Emilio Ontiveros from Analistas Financieros In-
ternacionales, this crisis does away with those
opinions advocating absolute autonomy and self-
regulation of financial markets. To him, they are far
from being perfect and need public institutional
monitoring. He therefore considers that new regu-
lation needs to control credit and especially price
risk. It needs to be straightforward and unambigu-
ous, foster informational transparency and all in all
allow to detect risks.
Joaquim Muns from the University of Barcelona
deepens into the properties a new international fi-
nancial architecture should feature. He considers
that progress was made on monitoring and regula-
tion at the London April summit, on which there
was consensus. However, he believes that the in-
tensity of that new regulation and the procedures
to implement it are blurred. Related to those
1.1 trillion dollars in «new» funds to strengthen in-
ternational financial institutions, the author consid-
ers that they make up for the lack of agreement in
going on increasing tax packages due to Europe’s
refusal to do so.
Jordi Gual and Sandra Jódar-Rosell from La
Caixa warn of the impact recent public interven-
tion to rescue the banking system may have on
competition, especially in the case of preventive
recapitalisation of solvent institutions. In the au-
thors’ opinion, this kind of public aid creates neg-
ative effects as it encourages competitive recapi-
talisation and distorts competition in the markets.
Moreover, it hampers deeper integration of the
European market as governmental access to the
shareholder structure may replace private institu-
tions from other member states having enough
capital.
Oriol Amat from the Pompeu Fabra University, and
a member of the Paradigmes Publishing Council,
considers that in a context of recession, companies
not moving swiftly will have a hard time to keep
their share of the market. He believes that such
change needs to focus on financial restructuring
and rethinking the company strategy and its busi-
ness model. Finally, he suggests measures to im-
prove the efficiency of a company in managing its
costs, assets and other resources. 
Pau Contreras and  Antoni Tormo from Oracle 
believe that companies going on innovating and
improving their service and added value will be at
the forefront once the crisis settles and markets 
recover. To them, ICT investment needs to be main-
tained and reoriented towards improving produc-
tivity, efficiency and operative cost reduction.
Maite Ardèvol from ACC1Ó states that the differ-
ing impact of the crisis by branch, population seg-
ment and country will have different effects on
competitiveness. She points out the risks resilience
to change of cycle creates in countries such as the
United States, France, Ireland, Spain and Japan, as
well as the opportunities such adaptability to the
new economic context can mean for Brazil, India,
Turkey and Indonesia.
Miquel Puig from Abertis International claims that
future economic policies shall be moving within a
wise balance between Keynesianism and mone-
tarism: market and fiscal balance in times or nor-
mality, restrictive monetary policy when asset prices
rise, control over risk quality at financial institutions
and Keynesian intervention only when markets col-
lapse, but always keeping foreign markets open.
Joan Prats from the Open University of Catalonia
debates how to move towards global economic
governance. He believes that there is an excess
trust in the ability of national governments to pro-
vide governance required for globalisation, as if 
the problem was to move from the frustrated claim
Change of cycle or change of model?8
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of American unilateralism to a multilateral world
defined and supported basically by national 
governments. To Prats, governance of non-polarity
could create new opportunities for newly defined
Catalonia.
Alfred Pastor from IESE believes that it is better to
bear inefficiency of excessive regulation than the
cost of a crisis caused by a lack of it. In his opinion,
adaptability and trust in the own strength are para-
mount to overcome a crisis he expects to last long.
Fear and greed as a foundation of living together
must therefore be overcome.
The block devoted to Future scenarios starts with
Gary Hamel from the London Business School. He
believes that the methodology to manage big com-
panies will need to change. Temptation to centralise
needs to be avoided because in such a dynamic
world there is not enough knowledge on what is
happening to have better discipline and control
over our organisations as things change too quickly.
To Hamel, management needs to be reinvented 
to avoid this kind of crisis, but without stifling
adaptability or responsiveness of companies to the
point that they become too bureaucratic.
The monograph finishes with a panel discussion
conducted by Ramon Aymerich from La
Vanguardia newspaper, and a member of the 
Paradigmes Publishing Council. Its participants are
Joaquim Boixareu (Irestal Group), Joan Font (Bon
Preu and member of the Paradigmes Publishing
Council), Modest Guinjoan (PIMEC), Pere Puig
(ESADE) and Xavier Segura (Caixa Catalunya). 
As Aymerich points out, the discussion shows the
polarisation between interests of a financial branch
that has been hegemonic for many years and those
of a productive economy that seems to have recov-
ered its ability to articulate ideas of its own.
Boixareu warns that as we cannot devaluate, ad-
justment will need to occur by reducing costs and
salaries, or employment will decline. Xavier Segura
believes that we will not return to a situation 
comparable to that before the crisis, with such low
interest rates and so much liquidity; otherwise, we
would do the same mistakes again. Font says he is
fed up of multinational corporations changing their
discourse on the free market according to their in-
terests. Puig is concerned with the effect of all res-
cue policies on public expenditure and believes that
coordinating these policies, at least in Europe,
would be enough. Guinjoan is worried about the
current situation leading to a return of protection-
ism and public opinion feeling unprotected and re-
acting along these lines.
Finally, the article by Joan Tugores in the Selected 
bibliography section does an analysis of classic and
recent texts dealing with the crisis.
We would not like to finish this short summary
without referring to the great new features of the
Paradigmes digital version, both in Catalan and in
English, providing additional value which we hope
will be highly appreciated by our readers.
9paradigmes /  Issue no. 2 / June 2009
ENRIC LLARCH
Director
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Executive summary. Change of cycle or change of model?

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