​Press conference by President of the Government following ASEM Summit

Milan

President of the Government.- Ladies and gentlemen, a very good day to you and thank you very much for your attendance here today.

I appear before you after taking part, as you know, in the 10th Asia-Europe Summit of Heads of State and Government.

This Milan Summit has focused on two main objectives: the first, to boost financial and economic cooperation between our two regions through greater connectivity, and the second, to debate various issues of international politics.

Since it was set up in 1996 as an initiative between the European Union and ASEAN, ASEM has become well established as the main forum for dialogue and cooperation between Asian and European nations. As you are aware, it is structured on three main fronts: political, economic and cultural-educational. Its flexible and open nature, without permanent institutions, is its great attraction, as shown by the increasing number of participants.

At Milan we have welcomed various new members; from Europe, Croatia, which joins the rest of the European Union countries, plus Norway and Switzerland; and from Asia, Kazakhstan. Following these new incorporations, ASEM now has a total of 51 Member States, plus the European Union and the Secretariat General of ASEAN.

One of the outstanding features of this Summit has been the consensus reached to strengthen the economic front of the ASEM process, which, to date, had been more focused on the political front. Asian economies are strong drivers of the global economy and Europe is creating, thanks to its structural reforms, the guidelines for sound and lasting growth.

We must be able to transmit to our citizens the importance of this type of forum to underpin economic recovery, sustainable growth and quality job creation, which, as you are aware, is the main objective of the government I head up. Furthermore, we must strengthen synergies between Asia and Europe through greater connectivity in all areas: transport, digital networks and increased trade and investment relations, which are the main areas we have debated here.

This summit has been configured around two plenary sessions and an informal session. The first of the meetings tackled issues relating to economic and financial cooperation, opening up trade, the role of SMEs as a driver of economic development, and improving connectivity between the two regions.

At the second plenary session, the debates focused on issues which included climate change, the prevention and management of natural disasters and the post-2015 agenda.

Furthermore, for the first time this summit included an informal meeting between the Heads of State and Government which gave rise to a rich debate, particularly on issues of international politics that affect us all, such as the situation in the Middle East, or those issues relating to the security of our respective regions: non-traditional challenges, such as transnational crime, freedom of navigation, piracy and maritime security. Asia and Europe continue to work to strengthen our cooperation mechanisms to help promote international peace, security and development.

My speech was principally aimed at speaking about three issues: Ebola, which, as you know, is a major current affair and which concerns us all greatly; the issue of terrorism, fundamentally the Islamic State; and finally, the issue of Libya, which is an issue on which we recently held a conference in our country, and in the month of December another inter-ministerial conference will take place in an attempt to resolve the very serious situation that has developed there.

Finally, I want to say to you that a document has been adopted at this summit, the Final Declaration of the Presidency, which I invite you to read as it contains the main conclusions regarding the issues dealt with at the different meetings.

Ladies and gentlemen,

Two years ago, at the ASEM Summit in Laos, the economic panorama in our country was very uncertain; just two years ago. However, on this occasion, Spain has been able to highlight that it is presently on the path to economic recovery and growth thanks to some very tough structural reforms which have required sacrifice and effort from the people of Spain. This journey has undoubtedly provided a valuable lesson to the debate held in Milan with our European and Asian partners.

Furthermore, as you know, I held a bilateral meeting with the Prime Minister of Poland, where we took advantage to broach issues on our bilateral agenda and certain questions regarding the European Council that will take place next week in Brussels, as well as international issues of mutual interest.

Thank you very much for your attention; I am available to take any questions you may have.

Q.- President of the Government, I want to ask you two questions: first, about the new threat of a recession in Europe. Can you analyse the situation for us? And, above all, what can the European Central Bank do at this time?

Second, yesterday the judge stated that Mr Blesa and Mr Rato were liable for all the expenses of all the credit cards; he also imposed a multi-million civil law bail. I wanted to ask you, as the President of the Government, what you think about everything that is coming to light and, specifically, about whether Mr Rato, who has been a very important member of the PP and the PP governments, after what the judge said yesterday, should remain a member of the Partido Popular.

President of the Government.- In relation to this second matter, I would like to point out the following: all of these events have fundamentally come to light because Bankia, which is now a nationalised institution, and which, hence, depends on the government, undertook an audit to see exactly what situation the savings bank was in. The results of this audit were forwarded to the FROB [Fund for Orderly Bank Restructuring], which is a body that, as you are aware, also depends on the Government of Spain; the FROB forwarded the information furnished by Bankia to the Public Prosecutor's Office, which has brought the case before the courts and we are now waiting for their decision to be handed down.

As regards the situation within the party of the person you are asking after, the party, from what I can see, has opened an informative file and it is clear that I shouldn't pre-judge anything at this time.

Hence, let's allow the courts to do their work and not forget that it has been the government, through Bankia, and through the FROB, that has forwarded this information to the Public Prosecutor's Office which has then brought this before the courts.

As regards the economic situation, and the repercussions this may have on Spain and the ECB, which is the first question you asked, in my first speech, in the speech that opened this press conference, I referred to the situation we found ourselves in two years ago. Two years ago, Spain was on the verge of bankruptcy, under the threat of a bailout, and at that time what was being talked about was whether the Euro would continue or if there would be two types of Euro: one for some countries and one for others.

At that time, Spain was in recession, in other words, we had negative economic growth in 2012, which in the end stood at -2.1%. Unemployment was rising each month. We were going through an extremely tough situation. Well, now we can see things from the other side of the fence without this meaning we don't have to persevere, do things and take decisions so that things increasingly improve. But, of course, two years ago economic growth stood at -2.1% while now, this year, economic growth will stand at 1.3%, which is what the government believes the figure will be this year.

Back then, each month, as I pointed out, unemployment was rising while now it is falling. The latest figures on National Insurance contributors show that there are 350,000 more people contributing to the Spanish social security system than in the same month last year. The data from the Labour Force Survey (Spanish acronym: EPA) for the second quarter show that, for every two jobs created in Europe, one of these is created in Spain, Hence, things have changed greatly.

Then, you have another fact; nowadays no-one is talking about a bailout of Spain, or that the Euro will fail, or anything of a similar vein. Of course, in 2012, the Spanish 10-year bond was being paid at 7% whereas it now stands at 2.1%. Hence, the change that has taken place is very significant.

Aside from that, it is true that there are some countries in Europe that are growing less. In fact, Italy has announced that this year it will once again post negative growth; France, minimal positive growth and the German Government has now revised its forecasts to 1.2% for this year and 1.3% for next year. We maintain our forecast of 1.3% for this year and 2% for next year.

Clearly, we would like to see our European partners doing as well as possible, among other things… Earlier I spoke about trade: our main customer and supplier is France, Spain's second main customer and supplier is Germany, and then, in no special order come Portugal, the United Kingdom and Italy. Obviously, the more we can sell and export to these countries - and we can only do that if things are going well for them - the better for us, because we will have to produce more and that will give rise to job creation.

Hence, the situation from this point of view concerns me, but I am convinced that the worst, at least in Spain, is over and I believe this is also the case in Europe.

What can the European Central Bank do? The European Central Bank is an independent institution and it's good that we all have that clear. It has taken certain important decisions in recent times: the European Central Bank has said that whoever leaves their money, i.e. financial institutions, with the European Central Bank will have to pay negative interest - this is an important decision - the European Central Bank will make loans to banks at an interest rate of 0.15%, for a period of four years, so that they can provide loans to SMEs - this is also an important decision - and the European Central Bank has announced the purchase of mortgage-backed bonds as well as the purchase of debt instruments from SMEs. All three of these decisions are important.

Aside from that, what do I think the European Central Bank should do? What the treaties say, which is that inflation in the Eurozone should stand at around 2%, and I believe that a good level of inflation should be just that, between 1.5% and 2% at this time. What is certain is that inflation in Spain is below zero, which has certain advantages, I must say, including that you can maintain the purchasing power of salaries and pensions, while in the rest of Europe it stands at 0.3%, I seem to remember that is the latest official figure to be published. So, we believe we need to see a little more inflation and that is indeed one of the man functions of the European Central Bank.

But I must say that the European Central Bank has done things, but it is not enough for just the European Central Bank to do things; it is very important to undertake structural reforms and it is very important to persevere with fiscal consolidation.

Q.- Allow me to continue with the issue of the 'opaque cards'. On Monday, your party described this event as disgraceful, and a certain president of a regional government even said that "whoever does this should pay". I wanted to know if you share all these opinions and if you believe that perhaps the best scenario would be for Rodrigo Rato to voluntarily withdraw his membership.

President of the Government.- The best scenario is for the judge - our justice system - to hand down his ruling as soon as possible. I am not going to go into more details on this matter, because I have to take care of governing, and whatever my party does well is always welcome.

Q.- I wanted to ask you about Catalonia, if you have any information, if you have spoken with President Mas, if you have had some contact that might make you think that there could be any change of partners in Catalonia.

As regards this issue, I would like your personal opinion, as President of the Government, on this scandal, if it makes you indignant or not, and if you believe that, given the circumstances, it was a mistake on your part to promote the appointment of Rodrigo Rato as Chairman of Caja Madrid.

President of the Government.- I have already answered the second question.

As regards the first question, I have no information that moves me to say what is going to happen. For me, what I would like to see is that he starts to govern soon. What I mean is that we have already spent a great deal of time on this issue. We had elections in Catalonia in 2010, we had elections in 2011, we had elections in 2012 and we are going to have them again in 2015. In short, what is important, now that a decision has been taken not to hold this illegal referendum, is for them to start to govern and take decisions.

My position is well known. I said back then that this referendum could not be held and that, obviously, we were all subject to the rule of law, more so those of us who hold public office and govern the people. Hence, aside from that, I have little to add to what I have already said.

Q.- You say that Mr Mas should start to govern as soon as possible, but since the referendum was suspended he is having problems governing and he will even have problems with the budget. Are the government and the Partido Popular prepared to support and maintain the governability of the present Regional Government of Catalonia or do you feel that elections should be called as soon as possible?

On another note, the government has submitted two laws to the Lower House of Parliament on democratic regeneration that it wishes to approve before this parliamentary term ends in December. Do you feel that these laws are credible while the Partido Popular is pending…?

President of the Government.- As I said earlier, it was the government itself that passed on the case of these cards to the Public Prosecutor's Office. The government ordered an audit, in this case, through the auditors appointed by the government when Bankia was nationalised and the results of this audit were then passed on to the FROB, which is a government body whose senior officials are appointed by the government itself. And it was the FROB that passed on this case to the Public Prosecutor's Office; this case and 19 other cases of transactions that could be considered to be unlawful, which will then be ruled on, as you would expect, by the justice system. And shortly, another 20 cases, not relating to Bankia but to other nationalised banks will also be passed on to the Public Prosecutor's Office.

Hence, I believe that the government has done what needed to be done. If we hadn't done this, this case would probably not have come to light; I can't state that categorically but it is probably so. In other words, the government has done exactly what needed to be done and it now falls to the courts of justice to take the decisions they consider appropriate.

As regards the issue of the elections, I believe that what was announced is good news; in fact I would describe it as excellent news that the illegal referendum will not be held. It couldn't be held, not because that is what the government said, or even because that is what Parliament said, but because the Constitutional Court stated that it was in violation of the Spanish Constitution. Aside from that, the ideal situation is that the government takes decisions, governs and approves the Budget. I imagine that in Catalonia, as in all governments, the best thing is to focus on that.

Aside from that, it is the person who heads up the Regional Government of Catalonia, in this case Mr Mas, who must speak with whoever he sees fit and he must decide with what partners he wishes to work, with whom he wants to govern and how he wants to do that. Hence, that is something that is down to him, and I, of course, am not going to get involved in the matter. What I can say is that situations of instability, situations that generate doubt and uncertainty, are not good for the government of any country and we all know that perfectly well without the need for me to have to make any sort of observation to grown-ups.

Q.- President of the Government, I wanted to ask you about the statement made by José María Aznar yesterday in the sense that dialogue with Catalonia was doomed to failure and that nothing good could come of it. What do you think about that?

I also wanted to insist on the issue of whether you have had any contact in the last few days with Mr Artur Mas and what does this dialogue you are proposing depend upon. And whether you believe that this new 'consultation' that has been called for the 9th is important from a political point of view and whether it could condition this dialogue.

President of the Government.- There is one very important detail here, which is that the illegal referendum is not going to be held. That is a very important fact, the most important of all. You may then have analyses, commentaries, opinions… People try to guess what is going to happen in the future. But what is important and what is relevant is that no referendum will be held in Spain that affects national sovereignty, which is very sensible and very reasonable because it is not held in any part of the world. Hence, this is very important in any part of the world that has a constitution.

That is what is important. Everything else has its part to play but, of course, the government is the body that has to take decisions and then everyone else can state their opinion and say whatever they think is best, as you would expect, and all in a constructive spirit. But, I repeat, that is the most important thing and, aside from that, at least in my opinion, what it should do is govern and bring to an end a period of instability that is not going anywhere and that ends up prejudicing our citizens as a whole. Thus, that is my opinion on this matter.

As regards the 9th; I don't yet know exactly because I don't think that it has been decided exactly what it is that they want to do. I am not going to get into a judgement call. The only thing I will say is that, if the law is broken, we will obviously do exactly the same as we have done with the issue of the referendum and I imagine that the result of this will be the same.

But, I repeat, we must look at what is important and that is that the government stated on 12 December last year that the referendum could not be held because it was illegal, and moreover, the whole world knew it was illegal, even those behind it. And that is what has happened.

Q.- President of the Government, you have said that you spoke about Ebola at this summit meeting. I wanted to know if you have heard any proposals here to shore up security in Europe and to shore up cooperation in Africa, and if you believe that the situation is on the right track in Spain, as it is at this point in time.

President of the Government.- Let's see. Indeed, this morning's debate did indeed have an open agenda. It fundamentally dealt with the major issues of a global nature that concern the whole world and Ebola is undoubtedly one of those issues. Ebola is a very serious disease which has fundamentally come from Africa but which has now been contracted in the western world for the first time. I ought to state that from the talks I have had these days, we had never before seen this disease in the western world.

If you think that the World Health Organization is talking about there being at least 9,000 people who have contracted this disease. We are already talking about 4,500 people who have died; the vast majority of which were in Sierra Leone, in Liberia and in Guinea. But, as I just said and as you are perfectly well aware, the disease has already been contracted in other countries such as the United States and Spain.

What I wanted to convey to my colleagues is that this was a very serious issue, which needed to be taken very seriously. I spoke a little about what we had done in Spain and I obviously called for help from everyone. This aid may come in two forms, but I believe that when an event of this gravity takes place, we must tackle it with all due seriousness and we must do whatever is in our hands to eradicate it as soon as possible.

Is this situation on the right track? I believe it is. I believe that yesterday there was talk of other people who could have contracted the virus; I believe the response was appropriately swift; analyses were made of all these people and the first test results have come through.

In the end, the question is to follow through with what was said in the first place. Before the first 48 hours were up, I said to Parliament that the first priority is Teresa Romero, as you would expect, who is the person who had contracted the disease, and the issue was to cure her as soon as possible; the second priority was to see all those people who had been in contact with Teresa Romero and keep them under surveillance - that is being done, some of them in their homes, because it is believed that the risk is much lower, and others are in hospital - and the third priority is to give all our support to all those healthcare professionals by providing them with all resources that they request, as at the end of the day it is these people who are in daily contact with the sick and they are the ones who are going to save the sick.

Hence, this is a topical issue, and we cannot discount more people contracting this disease, but the healthcare professionals and the Scientific Committee are telling us that we are heading in the right direction.

And allow me not to get into judgement calls, above all, on medical issues, because you are perfectly aware of my knowledge on this matter. But I have the feeling, and this is what I am being told, that this is all on the right track. Something else may happen, but we have the capacity to react swiftly. And, I repeat, it is not easy to contract; this may only take place through contact with fluids from a person who already has the disease, and at an advanced stage of development. I believe that it is positive to say this so that people have as much information as possible.

Yesterday we set up a webpage and a twitter account, and as you are all aware, the professionals, above all the members of the Scientific Committee and in certain cases the doctors at the Carlos III Hospital, are regularly notifying the public of developments.

So, in short, is it on the right track? Yes, I think so.

Q.- This morning David Cameron asked for an effort to be made on Ebola from the rest of the European countries in terms of human and material resources for those countries that were at the centre of the origin of the outbreak in Africa. I wanted to know whether Spain will respond in some way to this call, whether it will send resources, funds, etc.

President of the Government.- Yes. I have already had talks, even back in August, with the President of Liberia and just 48 hours ago we talked again. Spain has already made certain contributions, and we obviously intend to continue making them in the future: economic contributions, logistical support and there will be many flights to transport material and humanitarian personnel. And, of course, Spain is doing its part. This is an issue on which not being supportive is tantamount to being immoral.

Q.- You said the other day at the Financial Times conference that the deficit target would be met but yesterday some doubted this would be the case. Do you still maintain that Spain can meet its deficit target?

President of the Government.- It is normal that people doubt certain things. Above all, at an economic level, there are people who see things a different way. Even on the major, fundamental issues, the essential issues, there are different types of opinion regarding what can happen to the European economy.

Just think back to a case that affected us in Spain - how the people saw the issue of the bailout. There were a great many people who said, "but how can the government not ask for a bailout? That is madness!" Well… of course, on the matter of the public deficit, which was not easy - the issue is that the effects continue to then be seen in the future - we have had to reduce it by three points in two years against a backdrop of recession. In my opinion…, in fact it's not a question of my opinion; I can actually assure you that this is unprecedented.

We want to continue reducing the public deficit. I hope that we can meet this year's target of 5.5%. Revenue is up on last year, because we are seeing economic growth in our country for the first time in a long time.

We have gone through the worst economic crisis of the last three generations, the worst beyond a shadow of a doubt. There have been several years of consecutive job losses in our country, several years. We have had to take many decisions, some of them complicated and not very pleasant, and we must continue to do so. We must continue to make reforms and reduce the public deficit. But this lays the basis for us to receive financing so that we can pay our debt at 2.1% and so that last year we could save 8 billion euros in servicing our debt. That is very significant, a saving of 8 billion euros. This year, in 2014, it will also be very significant and should be somewhere around 5 billion euros.

In the end, these decisions produce effects but, of course, this does not happen overnight; it takes its time. But we are getting there, because we are now starting to see, I repeat, economic growth and we are now starting to create net employment in our country after six consecutive years of jobs being shed.

Thank you very much.