Over 120 CUNEF Universidad students attend a lecture on geoeconomics by economist José Manuel González Páramo

On 9 February, the School of Business, Economics and Law organised “The New Geoeconomy and its Economic Financial Impact”, a complementary activity for undergraduate students delivered by economist José Manuel González Páramo and chaired by Santiago Carbó, Professor of Economics at CUNEF Universidad. During his lecture, Professor González Páramo defined geoeconomics as the deliberate use of economic instruments, be they commercial, financial, industrial or macroeconomic, for geopolitical purposes. In this sense, he pointed out that in the current global landscape, economic relations are subordinated to the defence of power and national interests, as opposed to economic order that prevailed in recent decades, based on rationality and multilateral norms. 

Prof. González Páramo explained that this shift responds to the accumulation of different factors over the last decades, including the disappearance of the Soviet Union, the limits and high cost of prominent military supremacy in wars like Iraq or Afghanistan, the rapid rise of China as a global power, or internal tensions caused by globalisation, such as inequality and political polarisation. In this context, geoeconomics poses risks that are increasingly hard to manage for companies and banks, since they are unpredictable, interdependent, difficult to quantify, and transmitted indirectly through uncertainty, financial volatility and value chain disruptions.  

According to Prof. González Páramo, the historical context for this change is characterised by the end of Pax Americana, a system that, for over eight decades, consisted in the United States offering protection to its allies in exchange for their loyalty. This model has given way to confrontation between two superpowers with different strategies: the United States, which is evolving into a predatory or extractive superpower, and China, which has built a superpower of dependency by controlling value chains, raw materials, financing and foreign investment. This rivalry has left Europe—an incomplete superpower that functions well in times of stability but suffers when geopolitical tensions escalate and it needs to respond swiftly and credibly—in a vulnerable position. 

Looking ahead, Prof. González-Páramo laid out several scenarios for the EU, ranging from a possible “European Renaissance” to an accelerated deterioration under populist governments on both sides of the Atlantic. In his opinion, the most likely scenarios are the most favourable: a recovery of Europe's leading role or, at least, a more stable environment with less uncertainty; however, he highlighted two major strategic challenges: Europe must strengthen its leadership in a rule-based global market and reinforce the international relevance of the Euro, both as a global currency and through different initiatives including the digital Euro and the creation of safe assets. 

José Manuel González Páramo, who holds a PhD in Economics from Columbia University and is a Professor of Public Economics at the UCM, has been a member of the Executive Council at Banco de España, a member of the Governing Council of the European Central Bank, a member of the Committee on the Global Financial System of the Bank for International Settlements and an Executive Director at BBVA. He is currently the Chairman of the European DataWarehouse and a member of the Board of Trustees and Advisory Board at Inditex and Llorente y Cuenca (LLYC), as well as various Spanish and international foundations.