Mr Speaker, Honourable Members:
During my 2004 investiture speech, I committed myself to governing with a view to modernization and boosting our economy.
Over the last four years, we have grown more and created more jobs than any other comparable country; we have been faithful to our commitment to budgetary stability; we have been able to save and to lower the public debt: and for all of these reasons, in 2008 Spain has a stronger economy than it did in 2004.
It is true that for some time now, many Spaniards have been asking themselves about the future of our economy, and they feel unsure. They are aware of the fact that in a globalized world, the effects of a change in the international economic situation are felt in every corner of that world, and amongst us, as well. They are experiencing the credit crunch, some prices are rising, and some people have even seen their jobs at risk-especially in one sector, that of construction, which today is undergoing a marked adjustment.
The Honourable Members are aware that the available information points towards a scenario for the world economy, and the Spanish economy as well, which will, during the first phase of this legislative term, be different from the one we have known for the past four years.
The strengths of our economy are a good buffer, but they are not a wall that can isolate us from turbulent times for the world economy. Tied as we are to the rest of the global economy, such factors as the recession that the United States is undergoing, the difficulties in international financial markets and the so-called liquidity crisis, the escalating prices of oil-whose price has quadrupled in the past four years-and of many raw materials and crops on the international markets, have all made their effects felt in Spain. These factors, here, are added to the difficulties in the housing construction industry, and to the accumulation over the last ten or fifteen years of certain imbalances, fundamentally the current-account deficit and the inflation differential.
This lays before us a horizon, for the first phase of this new term, of growth rates lower than those of the previous quadrennium, and with less favourable employment trends than those of recent years.
This is the short-term scenario for our economy, but it is not a long-term one; rather, it is transitory. Therefore, the Spanish people should be assured that, once this transitory period has passed, the constants of the past term will be re-established, and, as all of the international organizations are announcing, we shall return to high levels of growth, and, once again, vigorously generate employment.
The impact of the worldwide crisis on our economy will be buffered, because our country is facing this situation with a positive scenario, and with robust basic economic indicators. Moreover, we have the opportunity to use this challenge to strengthen our capacity for growth, and improve the wellbeing of our citizens. We shall achieve this if we are able to articulate appropriate policies and responses.
For all of these reasons, the Government, the opposition, Autonomous Communities, local administrations, trade unions, employers' associations, and economic agents in general, all must be up to the task. We should rely on the strength of our economy, and develop economic policies that contribute to growth. We should be even more rigorous in a new scenario where internal demand will play a lesser role, and where growth factors will depend on increasing our productivity and our competitiveness.
Honourable Members,
This is a going to be a job for everyone, and it is within our reach to get it done. Therefore, the Government's economic policies will be aimed at strengthening our economy's capacity for growth, and we shall do so guided by three basic principles: First, a sound and cautious fiscal and budgetary policy; second, an economic policy that strengthens the competitiveness of our productive apparatus and steadily reduce our inflation differential; and third, a constant dialogue with economic agents that involves all of us responsible for the future of our country's economy.
Within the scope of budgetary policy, the surpluses accumulated in recent years will make it possible to absorb the impact that a slowdown in the economy could have on public income and the rise in some costs linked to social protection, with no need to raise taxes nor to impose cuts in social programmes.
It will also be essential to continue to capitalize our economy in its three branches: physical capital, human capital, and technological capital. This is a long-term commitment, basic to accelerating a rise in productivity and, therefore, in our capacity for future growth.
And we shall continue to be committed to macroeconomic and fiscal stability, aware of their importance and of the value that they have contributed to the development of Spain's economy in recent years.
This is the framework within which the Government's long-term economic actions may be situated over the course of this term but, looking at the immediate future, the Government will adopt, the same week that it is formed, measures to face this economic slowdown.
First of all, we shall put into effect a 400-euro personal income-tax reduction for pensioners, salaried workers, and the self-employed. This will be of great help to Spanish families, and will boost our economy on an aggregate level.
Secondly, businesses will be assisted with an advance on their VAT rebates, which will enable them to lighten their tax burden more quickly.
Moreover, we shall adopt a set of specific measures in the construction industry, which will be the subject of an Industry-wide Conference on Housing in the immediate future:
- The tax burden of renovating a home will be reduced;
- Tendering for public works will be speeded up;
- The rehabilitation of buildings and increasing their energy efficiency will be promoted;
- The state guarantee will be expanded for mortgage securitization bonds that have as their basis credits for the acquisition of state-subsidized housing;
- A special plan will be started up for the outplacement of the unemployed from the construction industry, as well as to strengthen the unemployment coverage necessary for workers who need it most;
- Facilities will be provided for extending mortgage contracts, with no additional cost, for families in especially difficult situations.
However, Honourable Members, this series of short-term measures should not distract us from the medium-term challenges we face, mainly the challenge of increasing productivity and strengthening Spain's productive potential.
These challenges are not new. We diagnosed them in 2004, although even then we warned that they would require government actions which, besides being energetic, would have to be persistent and therefore should be extended over a prolonged period of time.
The sector of research, development, and innovation will be boosted afresh, since we shall consolidate what has already been achieved with the Ingenio 2010 Programme, with a rigorous assessment of its results, and we shall once again strengthen public investment, whilst also seeking to mobilize private investment in research and development to the maximum.
We shall continue to raise infrastructure investment, in line with the previsions of the National Transport Infrastructure Plan, whilst also keeping an eye on the environmental impact of transport and on its contribution to territorial cohesion and the competitiveness of our companies.
We shall promote increased competition in the service industries, through a demanding and efficient transposition of the European Services Directive, to which other measures will be added to make professional activity more flexible, with selected actions in the areas of transportation and telecommunications. This rise in competition should promote dynamism and efficiency in these sectors which, besides attenuating inflationist pressure, could enable them to absorb part of the productive resources freed up by the construction industry.
Together with these measures, we are committed to reducing the administrative charges for businesses by 30 percent, with the aim of making their relationship with public administration as smooth as possible, both at the moment of their creation and over the course of all their subsequent activities.
Regarding human capital, we shall intensify our budgetary efforts regarding education, giving pride of place to grants and scholarships, whose numbers and quantities we shall continue to raise, as well as providing the necessary resources to satisfy completely the demand for places for minors aged zero to three years.
The fiscal framework will be brought up-to-date once again with the disappearance of the Wealth Tax and a modernization of the Inheritance and Donations Tax, which is borne, above all, by the middle class in our country. A second Anti-Fraud Plan should improve the good results obtained during the previous legislative term.
We shall promote, within a framework of dialogue with social agents, new reforms in the workplace, and in the Social Security system.
We shall also promote measures to favour the job-producing activities; we shall continue to promote jobs for women and young people; and we shall articulate policies to reduce precariousness in our job market to 25%, which is our objective for this term.
In other words, Honourable Members, our productive investment and social cohesion plans will be maintained, and we shall do so, moreover, without raising taxes. Indeed, they will be cut, within the margins that budgetary stability allows over the course of the cycle. This is an option open to very few countries.
Honourable Members,
Over the last four years, we have laid down the foundation for a change in our economy's growth model which brings us close to the most advanced countries in the world. The events of recent months not only make this change in our model more necessary-they make it more urgent. This is a task corresponding not only to the Government, but to all economic agents, and it can only be successful in an atmosphere of understanding, dialogue, and collaboration. For all of these reasons, we propose to establish a great Social and Economic Agreement which will encompass, of course, the job market, but will also include matters that influence the competitiveness of our production system; we shall convene talks on this agreement immediately with the employers' organizations and the trade unions representing the workers.
This is, Honourable Members, my idea of Spain: A prosperous country, which generates enduring wealth, which is the wealth springing from intelligence and not from exploiting nature, nor from cheap and unqualified labour; a prosperous country that is also a decent country, because it distributes equitably the wealth that it generates. Decent, because its citizens show solidarity with those who need it most; decent because here, all citizens, men and women, whatever their condition, enjoy the same rights, not only on paper, but in their everyday lives; and decent because it regulates with rigour and treats with respect those who come here legally to build among us and together with us a better future for themselves and for their children.
Honourable Members,
My idea of Spain is that of a country exemplary for its social policies; a nation admired for its policies on equality between men and women; a society that does away with any form of discrimination.
We should face, realistically, a period of economic slowdown that will extend over the course of the first part of this term, but the Government that I aspire to preside will not sacrifice its social policies, nor will it renounce its commitment to social progress.
Let there be no doubt, Honourable Members: If someone deserves special attention during the period in which our economy is growing less, it will be those who lack a job; it will be those who live on a pension; it will be the disabled; it will be workers with low salaries; and it will be the victims of gender violence. These will be the collectives deserving special attention from the Government.
It is well known that when faced with an adverse economic situation, there are two paths: one is to look for a way out via social cuts; the other, via solidarity. I believe resolutely in the second path, that of solidarity.
My idea of Spain is that of a country overcoming its difficulties through unity, a society that does not abandon anyone to their misfortune. No, Honourable Members, there will be no cuts in social rights; on the contrary, we shall continue to expand social rights and policies in our country.
We shall raise the minimum salary to eight hundred euros, from the six hundred euros attained in the last legislative term, and we shall do so in dialogue with employers and trade unions.
My idea of Spain is the idea of a country whose elderly live with dignity. A decent country respects and dignifies its elderly. It is also my commitment for this term to raise the minimum retirement pension of someone maintaining a spouse to 850 euros a month, and to raise the widows' pension for those over 65 to 700 euros.
During the past term, we laid the legal groundwork for a fourth pillar of the Welfare State: care for dependent persons. This term will be that of its full development. We shall assist 650,000 dependent persons and their families, and we shall continue to show solidarity by providing the resources to make this possible. A total of 871 million euros has already been budgeted for 2008, and in 2009 it will be 1.2 billion euros. A decent country, Honourable Members, helps those who cannot help themselves, and helps their families.