Antonino Vaccaro and Joan Fontrodona, IESE Business School, University of Navarra
What we have learned from 2010
What lessons can we draw from the things that happened in 2010? Is the legacy of 2010 just a pile of problems ranging from astronomical public deficits to unstable financial markets? Can we resign ourselves to accepting that we have fallen into a socioeconomic debacle from which there is no way out? Are we facing a gray horizon without any hope?
Faced with the pessimists, who always see things in a negative light, a more balanced reflection is in order, in which other elements besides the problems and difficulties appear when it comes to taking stock. Balancing the scales, we see at least three positive features emerging in the midst of the storm.
During 2010 we have seen some reactions in the management of expense by the Public Administrations. Countries such as Spain, Italy or Portugal have finally understood (with the occasional committee and external warning) that their way of dealing with the public deficit was not sustainable. Some will say (and they will not be wrong) that the measures that have been adopted are still insufficient, but -in our desire to be optimistic- we must emphasize that these first steps have brought about a very significant cultural and mental change.
expense public
The importance of controlling the public expense seems to be widely recognized; the basic principle of the domestic Economics , which says that one should not extend the arm more than the sleeve, and which many did not see necessary in the field of public management , seems to be starting to be accepted as a simple rule of elementary prudence.
On the other hand, politicians are beginning to discover that they have a duty to account for how they spend taxpayers' money. Recall the outrage in France over the news of a ministerial office's purchase of 15,000 euros worth of cigars, not to mention cases closer to home.
There has also been good news in relation to the fight against corporate fraud. During 2010 we have seen several countries acting not only on the side of criminalizing the crime, but also in taking preventive measures to avoid corporate malpractice. In Italy, the former owner of Parmalat, manager of a 14 billion euro fraud, has been sentenced to 18 years in prison; with him, 16 other managers also received prison sentences.
At the end of December, Deutsche Bank reached a agreement with the US Administration to pay a fine of 553 million for tax evasion cases. In Spain we ended the year with the reform of the Penal Code, in which companies can be convicted for corruption and fraud.
Also at the end of the year, the Vatican State announced the creation of a new body to prevent money laundering from agreement with European legislation. All of this is good news in terms of a safer economic system and a greater awareness of the active role that states and EU institutions must play against corporate fraud.
Good news has also come from the financial markets. The year 2010 saw a greater commitment by national and EU institutions to fight against anomalies and speculative movements by banking institutions. Presidents Obama and Sarkozy, along with other ministers from the world's leading countries, expressed their concerns about the health and stability of the financial system. The pressure for more transparency, fairness and accountability is now greater.
On the one hand, both governments and international agencies are putting pressure on banks through regulatory actions. On the other hand, consumers are becoming more aware and active in exercising their investment decisions. Increases in the volume of business of so-called ethical funds or cooperative banking initiatives are a clear indicator of this trend.
At summary, apart from the difficulties, problems and scandals, 2010 has left us with two important advances. First, a greater awareness of both individual and collective responsibility. Second, new initiatives that go in the direction of improving the ethics and justice of the partner-economic system.
Now it is up to us not to let ourselves be depressed by the chorus of pessimists and mourners, but to look to the future with optimism and build on these opportunities to continue working to improve, even a little, the world in which we live. This is the challenge that lies ahead of us.