Speech by President of the Government at closing ceremony of General Assembly of CEOE [Spanish Confederation of Business Organisations]

Madrid

Mr President of CEOE; Mr President of CEPYME; Mr Chairman of Telefónica - our host today; General Secretaries of the trade unions Comisiones Obreras (CCOO) and Unión General de Trabajadores (UGT); ladies and gentlemen; dear friends,

It is an honour for me to be here today. We are commemorating four decades of existence here today and I wish to congratulate you on that. As President of the Government, I am aware of the work that you have carried out over all of this time and also your contribution to Spain and to improving it as a nation. The work and social function you undertake are extremely important to our country.

I would like to take this opportunity to make some comments in line with the assertion I have just made.

Article 7 of the Preliminary Title of the Spanish Constitution states that "the trade unions of workers and business associations contribute to the defence and promotion of the economic and social interests that correspond to them. Their creation and the exercise of their activities are free provided they respect the Constitution and the Law". I want to stress that we are talking about an article that forms part of the Preliminary Title of our Magna Carta and of Article 7 which, to place it in its context, is preceded by an article that establishes the way in which political pluralism is expressed, which is Article 6 and is followed by another, Article 8, which talks about the role reserved to the Armed Forces as guarantors of the sovereignty and independence of Spain, the defence of its territorial integrity and the constitutional order.

We are not talking about a trivial issue; we are saying that, due to their situation, business organisations and trade unions are one of the basic pillars of our rule of law. And this situation, at the very start of the Constitution, gives them special importance on an economic, social and political level.

At any event, this formal recognition would have been mere rhetoric if it had not been accompanied and embodied in these 240 organisations that provide the backbone to associative life of the Spanish business world and which, as a whole, make up the CEOE. In this regard, we should highlight that this organisation was born an "orphan" and this "orphanhood" is a result of a decision that its founders got right: the new employers' association should not be born out of the ashes of the organisational formula adopted prior to the exercise of the freedom of association. Another correct decision was that from the very outset, unity was sought as one of the hallmarks of the Spanish employers' association compared with the diversity of other organisations.

It is hard to imagine the work and effort that would have had to have been made by the founders of the CEOE. Those were times in which the wind was not blowing precisely in their favour. By way of example, you just have to recall that 40 years ago more than 170 million hours of work were lost in Spain because of strikes and other labour conflicts. If we look at the figures for last year, 2016, we can see that the number of lost hours did not amount to 3 million; we have gone from 170 million hours 40 years ago to 3 million in today's world.

This difference, this qualitative leap, has not come about by chance, it is the result of a style of action that had begun to take shape back then: bargaining and agreements as tools to overcome differences and conflict.

Social consensus has thus become the norm while conflict has become the exception. Back in 1979, with the signing of the Basic Interconfederal Agreement between the Spanish Confederation of Business Organisations and the General Union of Workers, a new style began to be employed, what we now call a paradigm, in labour relations between the company and its workers. Since then, and until the signing in 2015 of the 3rd Agreement on Employment and Collective Bargaining, signed by the CEOE, CEPYME, Comisiones Obreras and UGT, all manner of agreements have been reached; global agreements, whether between the trade unions, between CEOE and CEPYME, or other agreements involving the intervention of the different governments of the nation, which included aspects that go beyond mere collective bargaining.

Ladies and gentlemen, none of this happened by chance. Through dialogue and negotiation, a "school" was created at which everyone learned and which has produced some excellent results that we welcome today. And today the outlook allows us to much more clearly and fairly assess, as tends to happen, by the way, the work that has gone on over these last 40 years. This has been a collective task, a task undertaken by everyone: business organisations and trade unions.

I am just going to mention two people from the business world that are not here with us: Carlos Ferrer Salat and José María Cuevas Salvador; two people who social partnership, business associations and the economic and social development of our country must always maintain in their memory. Without them, without their intelligence, their determination and their finesse in handling difficult circumstances, the CEOE would probably not have managed to celebrate this joyful anniversary.

Ladies and gentlemen, you can all feel proud of what you have done because, despite what some people think, the world was not created yesterday, but rather many people have been doing many things for a long time now to the benefit of their country. Hence, you can feel legitimately proud of what you have done; I wouldn't say satisfied, because there is room here for everything except self-complacency, but you can feel very proud of what you have achieved. And not only for the business world, but also for Spanish society as a whole. Without the work carried out in Spain by the CEOE and the trade union organisations, I am totally and utterly sure that the reality in our country would be very different, and in a very negative direction. This is something which, looking from the perspective of these 40 years that we are celebrating, no-one can argue about, and indeed, no-one is arguing about.

The effort and the sacrifice of so many thousands of people who have worked tirelessly on this mission deserve the recognition of everyone, of all the Spanish people; sacrifices which, on some occasions, have even meant losing their own lives. I want to mention here the names of two people whose lives were taken away by terrorist murderers - in one case, GRAPO; and in another case, the terrorist group ETA - for one reason alone: they were leaders of business organisations. I am referring to Rafael Padura, President of the Employers' Association of Seville, murdered in 1984, and José María Korta, President of the Business Association of Guipúzcoa, murdered in the year 2000. The madness of terrorism has unfortunately led to other business owners suffering extortion, kidnapping and even death just because they are business owners. This is a battle that Spanish society has won now, but the experience remains in our memories as a permanent tribute.

Ladies and gentlemen,

We have spoken about the past, but this is not a closed chapter. This commemoration, this anniversary, this birthday, is a starting point for the future. Now, as you don't tire of saying, we must "move on, and on, and on"; we have seen this in the video. And just stop to think for a moment that in the same way as 40 years have gone by, others will meet up - I also hope that those of us here will meet up again - to pay a similar tribute, to take stock, as you have done here today, and what I hope is that the balance of what will be done is at least as good as what we are celebrating here today.

I don't want to bore you and I think that Juan Rosell has been explicit enough in his speech; I simply want to remind you that 40 years ago, when the CEOE was being set up, in 1977, the number of people in work in our country stood at 12.5 million. That figure is now 6 million higher, which means an increase of 50%, and 9 in every 10 jobs are being created in Spain by companies, under various different legal forms. And all of this has been done despite the dreadful economic crisis we have been through in recent years; the worst in the last century, in the words we have just heard spoken by the Chairman of Telefónica. Everyone in Spain is very well aware of what has taken place here.

Allow me to now make a few comments about this crisis, about the period we have been through and, principally, about the future we now have ahead of us.
Spain suffered five straight years of recession; that had never before happened in our history. During this period, 10% of the national wealth was lost in GDP terms. Between the end of 2007 and the start of 2014, more than 3.8 million people lost their job; I repeat, 3.8 million people lost their job. The public authorities saw revenue drop by 70 billion euros; I repeat, 70 billion euros. Part of the financial system was on the verge of bankruptcy, we suffered many months under the threat of a bailout, the risk premium rocketed (it stood at 639 points in July 2012) and the public authorities found themselves in a position in which they could not access financing in the markets, as also happened with many companies.

We were suffering from all sorts of imbalances and we had a very serious problem with our competitiveness. This situation was suffered by all the people of Spain, particularly yourselves in your companies and in your businesses.

So, ladies and gentlemen, we can say today that the situation is radically different as a result of the efforts made by everyone and the sacrifices made by many, and, in all honesty, I believe that this has been worthwhile and should serve as a lesson as to what we have to do in the future.

The first thing we had to do was avoid Spain being bailed out. That would have been the worst case scenario for our country. We managed, with a great deal of effort, to maintain our economic sovereignty and that is the cornerstone of the strength with which we are coming out of the crisis, something that is not happening in other countries that were subject to a sovereign bailout.

The second task was to generate and transmit confidence - something which, as you know, is not easy - in order to be able to receive financing at a reasonable cost, and also to attract foreign investment, recover the image of our country and return buoyancy to the economic agents. To achieve this, we had to undertake a plan to reduce the public deficit which stood in 2011 at the figure of 9.3% of the Gross Domestic Product and which, at the end of last year, as we were reminded of here today, has now fallen to 4.33%. Believe me that it was not easy to meet this commitment and believe me that we had to make very significant cuts in public spending, even this year, with a ceiling on spending that is almost 6 billion euros less than last year, than the budget year for 2016.

We had to undertake a very broad raft of structural reforms. More needs to be done, but we have done a lot already. Let me briefly remind you of three of them, none of which are insignificant: the labour reform, the re-structuring of the financial system and the reform of the energy sector.

In parallel to all of this, we had to avoid some regional governments that had no access to the markets going bankrupt. We have been financing debt maturities and public deficit maturities, through the use of liquidity instruments, and we have paid the suppliers of many Spanish regional governments. One of them was even servicing debt at an annual rate of 7.75%, whereas it is now only paying 0.8% per annum.

So, the results are out there to be seen: three straight years of growth; we are the European country to enjoy the fastest rate of growth and that is creating the most jobs; the latest figures for the month of March are encouraging: in March this year, 2017, there are 604,000 more National Insurance contributors than a year ago; the risk premium is a thing of the past, we hope that for a long time to come; no-one talks about a bailout; credit is flowing normally - this is very important, as you know - and the gain in competitiveness can be seen in an unprecedented fact, which is that we have enjoyed four straight years with an external surplus, because our companies and our business leaders have launched their operations abroad after overcoming a tremendously difficult situation. The positive performance of the foreign trade sector has been truly decisive in ensuring that we overcome this economic crisis or, to put it another way, the positive performance of so many Spanish people who went overseas to sell their products.

This has all been a great collective task that has shown the exemplary conduct of the nation as a whole. This, as you are all aware, is better acknowledged and praised outside of our country than here, but this is a fact and this gives us a good base for continuing to work in the future.

In short, things have changed. Things have changed a great deal and for the better, but, as we have heard here today, it is still not enough.

What needs to be done now in my opinion? First, we need to continue with fiscal consolidation policies. While I realise this only has relative support, we must not let our guard down or repeat what happened in Spain between the years 2007 and 2009, when we went from a surplus of 2% to a deficit of 11% in just two years. We cannot allow this madness to be repeated. We now need to meet the target of 3.1% agreed with Europe for this year and get below 3% by next year. This is where we are gambling with a good part of the confidence and credibility in our country which, as you know, is also very important from an economic point of view.

Secondly, we must not undo the reforms undertaken because they have proven to work. Undoing these reforms would be tantamount to undoing the recovery. That is very important in the political situation in which we find ourselves at this time in Parliament.

Thirdly, we must not fall into self-complacency. We are still a long way off finishing everything. We must continue with our reformist policies and gain in competitiveness in all sectors. The world is changing day by day and we cannot be left behind.

Fourthly - you can see that I have said few things - we must not forget those who were worst hit during the crisis and all those people who are yet to feel the effects of the recovery. This has been very tough. Shedding 3.8 million jobs is not something, fortunately, that you see every day, but here we have a model of well-being that we can legitimately feel proud of and I would like to know how many other countries in the world, aside from the well-known European exceptions, can presume to have the same. And this is undoubtedly, as we have heard mentioned here today, one of the most important challenges we face in the future. Pensions currently account for 40% of the spending of the government I head up and healthcare is undoubtedly also a very important heading of expenditure. These, in my opinion, are the two great challenges looking to the future.

In short, if we do things well, we can look to the future optimistically. I have never liked premature celebrations, however bright the predictions are. We have been prudent in our economic predictions over the course of these years. We are now going to revise the economic growth forecasts for this year. Next week the Council of Ministers will approve a new forecast for the growth of Gross Domestic Product for 2017. We had set this at 2.5% but are now going to raise it to 2.7%. The figures recently published on the first quarter of this year, plus the national and international forecasts as a whole make it advisable for us to raise this forecast. It still remains below the majority of the forecasts but we consider it to be realistic and prudent.

I would also like to say that economic growth will be very positive - I repeat, if we do things well - at least in the years 2018 and 2019. And all of this will mean that we, or you, can create some half a million jobs a year to hence reach that figure of 20 million Spaniards in work. That is the goal, it can be achieved, but I would ask for your help, which is decisive, and I would say to you that I will also contribute whatever I can and am able to.

I will draw to a close now, but first please allow me to reiterate what I said: we mustn't undo the reforms, or stop the new reforms, or forget that many people have gone through extremely tough situations. We cannot allow ourselves to make any of these mistakes in a potentially buoyant period. We have a great opportunity ahead of us. If we do things well, if we concern ourselves with what is fundamental and if we don't get our priorities mixed up - one of the worst mistakes you can make in life - then the possibilities open up before us of enjoying a long period of economic growth and prosperity.

But we must continue to look to the future. Let's not forget that our main priority is to see 20 million people in work in Spain. But our ambitions must not rest at that. Our difference in per capita income - this has also been mentioned here this morning - with the more developed of our peer countries can principally be explained by the employment rate. In order to reach similar rates to these countries this must be one of our medium-terms objectives.

I will end now as I began. I congratulate you on this anniversary and I would pass on to you, on behalf of all of those who identify with what I am about to say, our recognition of this task undertaken. These have been 40 years of hard work, but also of success. I said this at the beginning, without the Spanish Confederation of Business Organisations, our history would not have been the same and rest assured that things are much better now as a result of its existence.

Thank you very much.