Speech and subsequent Q&A session by President of the Government at Europa Press Breakfast News

Madrid

SPEECH BY PRESIDENT OF THE GOVERNMENT

Madam Speaker of the Lower House of Parliament; Mr Speaker of the Upper House of Parliament; Madam President of the Regional Government of Madrid; Madam Vice-President of the Government; ministers; Mr President of the Regional Government of La Rioja; Mr President of the Region of Murcia; State secretaries; members of the board; sponsors; ladies and gentlemen; dear friends,

Good day to you all and thank you very much for attending this breakfast that Europa Press has kindly invited us all to.

These Europa Press breakfasts have become a not be missed meeting point for dialogue, reflection and proposals on the future of Spain over the last few years.

I will announce to you now that it is my intention to be true to this spirit. I have come here to talk about Spain, which is what unites us all over and above our differences of opinion and our different interests. I have come here to talk briefly about our past, our present and, principally about our future, and about, as far as I humbly understand, those issues that most concern and interest the people of Spain.

I know that I am doing this at a very special moment, as we were reminded of here, in the middle of an electoral campaign for the regional elections in Catalonia to be held on 21 December, that I will also mention here today, because Catalonia is a fundamental part of Spain. I am sure that whatever I mention about these elections will be an issue that we will tackle more closely at the subsequent Q&A session.

Ladies and gentlemen,

If we look at the figures from the latest survey by the Centre for Sociological Research, published on Tuesday, we can see that what most concerns our citizens, way above any other issue, is unemployment. For 65% of Spaniards, this continues to be the most important problem facing the country. It is true that this figure has fallen by four points in barely three months, but it is no less true that that this figure is still double the next issue of concern that we could mention, and there are assuredly quite a few that could be mentioned.

So, this fact should be top of the list to guide any responsible political action with a genuine social awareness - if unemployment is what most concerns our people, then our main goal should be to do away with it. As I have said on more than one occasion, in politics it is key to get the priorities right and employment remains the main concern of my government.

It will have escaped no-one's attention that the high level of unemployment we still suffer from is the last after-effect of the very serious economic crisis we went through; an unprecedented crisis that went on for five years, reduced our level of wealth by 10% and led to 3.8 million jobs being shed. It is true that over the course of this year we have now recovered the GDP lost during the crisis, but we still need to recover one third of the jobs that were shed over those years and now that is our main commitment.

There were many people who thought during those very tough times in the years 2012 and 2013 that Spain could not overcome the crisis, that we would have to renounce our economic sovereignty and ask for a bailout, renounce our membership of the Euro, or, worse still, renounce the foundations of our system of social well-being. The economic upheaval was of such a scale that talking about overcoming the crisis seemed like an exercise in mere positive thinking rather than a sincere and dispassionate analysis and reflection of the reality.

I believe that if any of you present here now - whether a politician, business leader, journalist or economic expert - put yourselves in our country's shoes four years ago, you would agree with me that you would be incapable of imagining the current situation in our country. Or could anyone have predicted then that today we would be enjoying growth at practically double the rate of the Eurozone average and that this is the third straight year in which this is the case? Or would anyone have been able, back in those dark days of 2013, to imagine that Spain could create 600,000 jobs a year, as has happened this year, in 2017, after having created half a million jobs in each of the last three years?

No-one would have bet then that today we could be enjoying a situation such as we are at present. In fact, and without this trying to sound boastful, I would like to remind you that during these years, the main national and international (International Monetary Fund, OECD and also the European Commission) economic institutions have always been forced to revise their economic forecasts for our country upwards.

The Spanish economy is creating half a million jobs each year at present and this is not by chance, because the same thing has happened in each of the last three years. And I would add that this must continue for at least another two years in order to hit our target of seeing 20 million Spaniards in work by the year 2020.

The rest of the indicators show a panorama of a healthy economy and one that is expanding:

- Spain has now enjoyed four straight years of economic growth at a rate in excess of 3%, almost double the Eurozone average and well above the rate in such countries as Germany, France and Italy. This year, we will close 2017 with GDP growth of 3.1%, once again above the Eurozone average.

- The Spanish economy is much more competitive and open to foreign trade now than it was. We export one third of our GDP and that has allowed us, for the first time in our economic history, to post a positive foreign trade balance for several years in a row, including this year - 2017. To put it another way, we are growing through our own resources, without having to resort to indebtedness.

- All of the qualitative indicators show an upward trend. Just by way of example, I will quote some of the figures for this month of December

• The manufacturing index is at its highest level since February 2007.
• Household and company debt is at 2006 levels.
• The number of mortgages on properties has grown by more than 9%.
• Social contributions have grown by more than 5% in annual terms, the best figure since 2006.
• Large consumption figures have grown by more than 4%.

I could go on like this but I will save you further details because I believe that my argument is sufficiently backed by objective figures.

Ladies and gentlemen,

These are figures for the month of December, a small sample of the current situation, but they serve to offer a precise snapshot of the tremendous work done by the Spanish people to exit the crisis.

I will now end the brief reference to our past and to our present, which I just wanted to mention in order to share with you the main conclusion that we can take from this - Spanish society has proven that it is capable of coming out of apparently impossible situations, and it has done so with vigour and determination. And this reality that we have once again confirmed, the energy and ability of Spanish society to overcome adversity is what must mark the bounds of our ambitions and our projects in the future.

Let us now talk about the future. What can we aspire to do? What can we say to those Spaniards that still consider that unemployment is the main problem in the country? How can we tackle the new problems we are facing?

I can assure you from here that, if we continue to do things well, with perseverance, with determination and with stability, then we could dare to say that things will continue improving considerably in the coming month and years. There is a clear horizon of certainty and prosperity that the Spanish people will be able to enjoy in the near future, defined through such parameters as the following:

• The economy will grow by an average of at least 2.5% per annum until the year 2020.
• This economic growth will continue to strongly translate into new jobs. We may well end 2019 with 20 million people in work and reduce the unemployment rate to 11%, which, I would remind you, rose as high as 26%.
• This correction will also translate to other economic figures such as public debt, which may fall by up to seven percentage points. Our goal is for this to stand at around 91% by the year 2020.
• And we will maintain our surplus in the current account balance by around 2%.

In short, we can satisfactorily complete the colossal task that we began six years ago when we came to power. The goal is not only to recover the wealth and jobs shed, but also to do so with a far-reaching transformation of our economy that allows us to guarantee our model of well-being and social protection.

The future of pensions, grants, public health, family benefits, the quality of our services, education, etc., all of this depends on the success of our economic management. There are 14 million people in Spain who receive some form of public income each month, most of whom are pensioners. The tranquillity of all these people depends, primarily, on a good economic policy that allows us to maintain our social protection system.

It is not possible to implement a social policy without resources and resources can only come from a healthy and prosperous economy. Pensions are not paid for from speeches, they are paid for with social contributions; grants do not fall out of the sky, they are the product of public revenue; healthcare is not improved by magic, but rather by the efficient management of available resources, which are always limited.

Ladies and gentlemen,

We don't want to balance our books by claiming to be the most applied students in class; we want to do so because we know that this is the only way to maintain a system of social protection that has been, for some time now, one of the hallmarks of the identity of a democratic Spain that was born 40 years ago.

And what must we do to achieve that? Remain committed to the formula that has been so successful for us - budget stability and reforms.

That is why it is fundamental, and for me it is a priority, to approve the General State Budget for 2018 as soon as possible. The approval of the Budget not only provides a backdrop that offers certainty and foreseeability to the different economic stakeholders; this also sends out an unquestionable message of political certainty and stability in the country. That is how the Budget for this year, 2017, was assessed both within Spain and abroad, and I hope that the responsibility of all concerned allows us to repeat this operation in 2018. I am optimistic and will devote all my efforts to achieving this goal.

Furthermore, we need to adopt new measures aimed at job creation. This involves improving active policies and training: catering for the digital training of young people and also for the long-term unemployed. The rate of job creation will depend on our degree of success in this task, but also in the quality of this; a key element in any policy to fight inequality.

We must also continue to improve the functioning of our markets, strengthen market unity and continue taking steps towards eliminating administrative burdens. The approval last Thursday, at the Council of Ministers, of the Annual Regulatory Plan of Central Government responds to this philosophy of a better administration that is more transparent to our citizens. This is an instrument that seeks to streamline and offer coherence to the task of legislation while, in turn, informing different stakeholders of the government's expectations, thus helping strengthen legal certainty.

We must also think about improving entrepreneurial activity on two levels: a 10-year internationalisation strategy and a policy that helps boost the size of our companies. This must also be the main medium-term goal. Larger companies are sounder; they can face crises better and can give over more resources to innovation and training. In short, larger companies make countries more stable and sounder.

And lastly, I wish to mention an issue that my government gives tremendous importance to: the digital agenda. I believe I am not exaggerating when I say that the digital agenda places us with a social transformation of at least the same magnitude as the industrial revolution did. This is a paradigm shift that is already affecting the economy, business models, consumption and social structures. There is no reason why Spain should not be in the front line of these changes. Fortunately we have one of the best digital infrastructures in the world and we must now, as I said a moment ago, address the digital training of the whole country. We must all be very aware that in this endeavour we are playing with a major part of what Spain can be in the decades to come and my government will do everything possible to reap the rewards of the tremendous potential of what the digital economy offers us.

Ladies and gentlemen,

I don't want to go on much longer on these aspects now; we can do that later if you wish. I only wish to underline one fact: we know what we must do to guarantee the sustained and inclusive growth of our economy in the coming years. A plan exists that, in the same way as it served to bring us out of the worst crisis in our history, will allow us to now enjoy a boom period that provides us with tranquillity for many years; a plan to improve the lives of our generation but, above all, to offer the generations to come a better country in which to develop their life projects.

Ladies and gentlemen,

Although it is true that, prior to any economic plan, any future design or any budget for measures, it is necessary to lay down a pre-requisite that must be beyond all form of discussion: I am referring to legal certainty and respect for the rule of law. If you will give me the licence to do so, I will say that these principles are "pre-political"; in other words, in civilised countries, which Spain is, they stand above and beyond any legitimate and healthy political debate. Moreover, they protect this debate and guarantee that this unfolds in a framework of co-existence, fair play and respect for the rights of everyone.

During these last 40 years, our lives together have been, in general, so peaceful, so democratic and so satisfactory that recognising the basic foundations of our civic harmony may even seem humdrum, a set of stock phrases: the rule of law, the equality of people before the law, respect for minorities, security, etc. Allow me to read you a phrase by Giovanni Sartori that is wholly appropriate in this regard: "Democracies in their grey daily functioning deserve little credit, but one thing is to complain about their daily functioning and quite another is to discredit them on a matter of principle. The true threat to a democracy that officially has no enemies is in calling for a true democracy that transcends and disowns the law".

So, ladies and gentlemen, in light of the events that we have seen unfold in Catalonia in recent weeks, we have all recovered a precise perception of the scope and importance of these democratic values. We have all learned the reality and importance of what was at stake.

People need to live in society and know what we can expect from others. We need foreseeability, to know the boundaries within which to act and have a system that allows us to design and carry through our life projects. Without this system, things are unforeseeable and can change to the survival of the fittest whereby society duly suffers.

Without the law you cannot have a free society. Either the law is the centre of gravity of co-existence or society breaks down into endless conflict that ends up destroying this co-existence. When the law breaks down - democratic law - society as a whole suffers and the way is paved towards general madness and chaos. Fear, insecurity and upheaval all prevail, co-existence flounders and you end up doing away with well-being.

Without respect for the law, you can have neither legal certainty nor liberty, and without these you cannot have wealth.

This is as certain as the fact that 3,000 companies, among them the most important companies in Catalonia, have changed their registered office, and in many cases their fiscal domicile, fleeing from upheaval and legal uncertainty. This is as certain as the numerous economic indicators that show that the Catalan economy - one of the most powerful drivers of the Spanish economy - is "sick" as a result of the pro-independence cause. Employment, investment, vehicle registrations, tourism, housing permits, exports…, whichever indicator you look at, they all reflect the lethal consequences of uncertainty and the lack of security.

That is why one of the fundamental reasons my government triggered Article 155 of the Constitution was to bring an end to the very serious economic decline that the disobedience and disloyalty of the former Regional Government of Catalonia was causing the region, and by extension, the rest of Spain.

At any event, the most important aspect of what I have to say here today on this issue is what is yet to come: I firmly believe that this damage can be swiftly turned around if, as from 21 December, a new era opens up in Catalonia and the policy of constant challenge and disobedience is definitively overcome that marked events in recent times.

Whatever the results of these elections may be, there is something that presently no-one has any doubts about and that is that the law in Spain is upheld and that will remain the case. The rule of law has shown it has effective democratic mechanisms to defend itself from those who wish to wipe it out.

It has shown that democracy works: everyone has complied with their duty, legality was been restored in a matter of hours, we have discovered the quality of our laws and the robustness of our institutions and, in passing, we have also verified the extent of our national sentiment.

For all these reasons, what we can hope for is that the pro-independence Catalans henceforth take on board that they can fight for their ideas, because Spain is a democracy, but always within the bounds of the law, because Spain is a democracy.

As from 21 December, once we have returned to normality and the certainty offered by the law, we will all have to make an effort to recover investor confidence in Catalonia and turn around the dramatic consequences of what happened in these recent months as soon as possible.

As you are aware, the political crisis in Catalonia has led the government to revise the growth forecasts for next year. This is a prudent measure taken in light of what has taken place. But I can also assure you that, if the situation definitively and swiftly returns to normality, if doubts are dispelled and if the incoming Regional Government of Catalonia maps out an agenda other than a breakaway, confrontation and illegality, Catalonia and Spain may head up a great leap forward and return to growth at levels of close to 3%, or even exceed this level, as has happened in the years 2015, 2016 and 2017.

This should be the goal of all political leaders, regardless of their proposals, ideas and dreams, because the future of the people of Catalonia and the credibility of their institutions depend on this level of growth. If only everyone thought like that.

I will end now.

Europa Press celebrated this year that we are on the verge of closing off 60 years of life, which coincides with one of the most attractive and dynamic periods of our history in Spain. Over these last 60 years, Spain has opened up to the world; it found a way to head up an admirable transition to democracy; it portrayed an exemplary democracy; it laid the foundations for a sound system of well-being and one of the most de-centralised political systems in the world; it joined all the Western organisations; it became a member of Europe; it actively took part in the foundation of the Euro, and we even saw through a change in the Head of State - a calm and tranquil transition - something all too uncommon in our eventful history. More recently, we avoided the country being bailed out and we have just defended our co-existence from one of the most serious attacks it has ever been subjected to.

Among other things, this is what has happened in Spain in recent years although, as you are aware, this will never become news, because good news is never newsworthy, it is only other news that hits the headlines.

What is true is that, as I said at the start of this speech, Spanish society has shown that it can come out of apparently impossible situations and it has always done so with energy and with determination. This should be the measure of our ambitions.

Aside from that, ladies and gentlemen, Mr Moderator, I will now take any questions. Thank you very much. 

Q&A SESSION WITH PRESIDENT OF THE GOVERNMENT

Moderator.- President of the Government, let's get down to work. We have 35 minutes. I had organised this breakfast to deal with the main issues of current affairs: Catalonia, of course, regional financing, the constitutional reform, the Budget… And I wanted to leave the last few minutes for some more general issues. But obviously, other things always arise because current affairs develop quickly. So, allow me to choose the course, as we always tend to do, and I will ask you about Sijena, about the transfer of the assets to Sijena. The Guardia Civil and public servants from the Regional Government of Aragon have been there since early this morning to start the transfer. I will like your assessment of the matter.

President of the Government.- What you are asking me to do is make a value judgement of a judicial ruling and, as you know, judicial rulings should be upheld, unless we intend to replace the judges in the exercise of their functions, and hence, do something other than what the rule of law constitutes. This is not the first time that this has happened. There was another ruling that was upheld by the Regional Government of Catalonia, on the transfer of some cultural assets, in that case from the National Art Museum of Catalonia. This time there is another judicial ruling that affects Lleida Museum, whose Board of Trustees is made up of the City Council of Lleida, the Regional Government of Catalonia and the diocese. The judge has made his ruling, and hence, the government has nothing to say about court decisions; it will simply uphold them.

Moderator.- President of the Government, I am told that there is a minor incident, that a minor incident is taking place. I don't know whether you fear that the pro-independence movement may use this again in the heat of its campaign under the guise of an oppressive State, etc.

President of the Government.- I don't know. I obviously believe that court rulings should be upheld. If someone believes that court rulings should not be upheld and wishes to replace the figure of the judge, then let them say so. But I do not believe that is the way that a democratic system normally works.

Hence, everyone must be responsible for the decisions that he or she adopts. Of course, my position is that which everyone expects of me: that I uphold court rulings. I don't believe that anyone would ask me to do otherwise.

Moderator.- President of the Government, the other issue that has come up this weekend, which is tremendously important for everyone, is the agreement on Brexit. On this matter, I wanted to ask you if we now have something of an idea as to how this will affect Spain and, above all, if you will try and negotiate that this application of Brexit also applies to Gibraltar.

President of the Government.- On Tuesday I was in London with the British Prime Minister and I saw how decisive she was in doing whatever was necessary to reach an agreement and come to an understanding; as indeed are the European mediators.

You are aware that we have placed our trust - the 27, hence without the United Kingdom, that make up the European Union - with the United Kingdom this makes 28 - in Mr Barnier. We are still in the first phase of negotiations and the first phase of these negotiations has only one goal: to reach an agreement on certain commitments that the United Kingdom must meet and then finalise certain issues so as to move on to the second phase. The aim of the second phase is to reach an understanding on future relations between the United Kingdom and Europe once the former leaves the European Union.

So, the other day, as you know, an agreement was reached and I am very pleased that such a quick agreement was reached, because this offers security and certainty. There is nothing worse than being in a situation of uncertainty on such a matter for too long. And I hope that at the European Council meeting to be held in Brussels on Thursday and Friday that Mr Barnier is given the go-ahead to start negotiations on what, in the end, is the most important issue - the future situation once the United Kingdom leaves the European Union; relations between the United Kingdom and the European Union.

There are some issues regarding these future relations, such as the matter of Gibraltar that you mentioned. What is stated there is that any agreement that the European Union reaches with the United Kingdom in the future will require an agreement between the United Kingdom and Spain in order to be applicable to Gibraltar. Hence, the key is to apply these instructions that were given to Mr Barnier in the future.

Moderator.- Having cleared up these first two issues, let's move on to the issue of Catalonia. My colleagues have asked almost every possible question regarding the possibilities of the campaign and the post-election situation. But allow me firstly to start with an issue that would be secondary in other circumstance but which has become important here, which is the European Arrest Warrant. Do you believe that a clarification is required or should be requested on these European Arrest Warrants?

President of the Government.- What I can answer to that is something similar to the response I gave to the first question. That is a decision adopted by a judge and I respect that. The judge then took another decision and I also respect that. What has this conveyed to public opinion? Firstly, although the former President of the Regional Government of Catalonia and the other regional councillors were summoned to testify, it is true that some regional councillors appeared to testify while others fled from justice to Brussels.

The judge issued a European Arrest Warrant and there was a period of time in which the Belgian justice system had to take a decision regarding the competence to judge the matter. And then, the judge withdrew the European Arrest Warrant. Why did he do that, according to what I have read in the media? Because he appreciated that the outcome could be that, given that the request to hand over these people was for certain specific criminal offences, in the end they could only be handed over for these specific criminal offences, and hence we could end up in a truly controversial situation whereby those people who turned up to testify before the judge could only be tried for one or two offences, and hence would be better off despite having fled justice.

That is what the judge explained or what I read in the press. And what I have to do in this regard is respect the decisions taken by judges, as the competent parties to take decisions on these matters and which comprise, together with others, one of the great State powers, which is the Judiciary.

Moderator.- President of the Government, we are in the heat of the campaign, there are 10 days to go until the elections and before starting with the specific questions from my colleagues - I appreciate it is very difficult to interpret the polls, I am fully aware of that; but the truth is, President of the Government, that, for the time being, the polls are not being very generous to the People's Party. I don't know whether you have any other facts at hand.

President of the Government.- I would suggest that you interpret the polls in the following manner: look back two years; then, look at the results of those elections and now look at the polls being published prior to these elections. Since we have the results of the elections that were held two years ago, we can now compare the different polls. In this case, we only have the polls available, and hence, the comparison can only be made once the elections have been held.

Moderator.- So we have no choice then but to wait for 21 December.

Several colleagues from Telemadrid, Lucas Goicoechea, from Cuatro, Susana Camacho and Marisa Cruz, from "El Mundo" are asking about the issue of unilateralism. I will ask the question as posed by Marisa, which I believe just about sums up everything. She asks, "If the future Regional Government of Catalonia takes up the path of unilateralism again, as proposed by Esquerra Republicana [Republican Left of Catalonia], will you once again ask the Upper House of Parliament to trigger Article 155?"

President of the Government.- In reality, in answer to all these questions about what I would do in the event that something or another occurred, it is almost better to wait for them to happen or not because that way we don't have to think too much and, what I have to do is take decisions, I will take them when these events unfold in the event that they do indeed unfold.

But I would like, however, to say one thing: I am unaware of exactly what unilateralism actually means; but I suppose that what you mean to say is that if they break the law again and state that the Constitution no longer applies, or the Statute of Autonomy and if a referendum is called in breach of the rulings handed down by the Constitutional Court… It would be better if you called a spade a spade, don't you think, because this question of unilateralism is an unknown quantity which I believe means the following: wiping out the law, ignoring the rules of co-existence, not being subject to the rule of law, and hence applying the law that one wants to, which means the survival of the fittest. That should not be done. That is very bad.

Moderator.- You have painted it very black, indeed. I know that we are speculating and until 21 December it will be impossible to do otherwise. I apologise but those are the cards we have to play with. I say this because María Jesús Güemes, from Cadena SER, for example, asks you whether, "if the pro-independence movement wins an absolute majority in the elections that you have called, should you then call a snap general election?"

President of the Government.- No. I don't know what early general elections have to do with the elections to the Regional Parliament of Catalonia. I believe that terms of office tend to last for four years, people choose their leaders for four years and hence, unless an exceptional situation arises, elections are held every four years. We held a general election here in 2015, as everyone knows, which had to be repeated for the reasons that everyone knows and so they were held again in 2016. In June 2016, so four years later would be June 2020.

Moderator.- President of the Government, I repeat, I know that we are speculating, but let's move ahead and place ourselves in the position on 22 December, when I repeat, according to the polls, it would seem that there will not be an outright winner. At least that would seem to be the case. The PP candidate in this somewhat complicated scenario would support, I understand, a pro-Constitution candidate at any event. I would ask you whether the PP candidate, Mr García Albiol, would support a pro-Constitution candidate for the Regional Government of Catalonia.

President of the Government.- I believe that the positive aspect of the People's Party is that we are not suspected of taking decisions that are hard to explain. We are probably the only ones. Of course, we are standing in these elections with the aim of having a regional government that is in favour of the Spanish Constitution, of democracy, of liberty, of the separation of powers, of the rule of law…, of everything that is right and proper in any democracy in any of our peer countries. That is why we are standing, that is what we are working for and, of course, we will be the most constructive party of all involved in ensuring that this is the case.

Moderator.- President of the Government, as the case may be, and if the numbers are right, who would you personally prefer to see heading up the Regional Government of Catalonia: Ms Arrimadas or Mr Iceta?

President of the Government.- Mr Albiol.

Moderator.- And should that not be possible, because the numbers don't work out and it were Ms Arrimadas or Mr Iceta?

President of the Government.- I will answer that when it is seen that it is not possible. At any event, what I can say to you is that it is impossible to form any pro-Constitution alternative without the votes of the People's Party.

Moderator.- More or less along the same lines, and before moving on to another question from my colleagues, President of the Government, you give the impression - I repeat, I know we are speculating - according to the surveys, that Cuidadanos has taken over part of the People's Party vote, at least in Catalonia. I don't know whether in the rest of Spain, but at least in Catalonia. I don't know if you have reached the same conclusion.

President of the Government.- Elections are different. Last year, general elections were held… I was in Lleida the other day and four MPs are elected in Lleida, and of the four MPs, one was from Esquerra, one from PdeCat [Catalan European Democratic Party], one from Podemos and one from the People's Party; the other formations had no MP elected. For example, in the constituencies in Barcelona, which is the largest, where the most people vote, the People's Party was well above PdeCat, something that had never before happened, and it was above Ciudadanos. In Tarragona, there were six seats, one for Esquerra, one for PdeCat, one for Podemos, one for PP, one for Ciudadanos and one for the PSOE [Spanish Socialist Workers' Party].

People vote how they see fit and opportune, and are right to do so. Hence, let's see how events unfold on 21 December, because, in all honesty, I can't see at this time what the outcome will be.

What I can say to you, and I said this in Lleida the other day, is that the vote for the People's Party is a very useful vote because this vote has served to overcome a tremendous economic crisis, as I said in my opening speech; this vote has led to more than 2 million jobs being created and the latest figure for this year is that there are 637,000 more contributors to the Social Security system than last year; this vote has led to the re-structuring of the whole financial system and to this country enjoying much healthier growth than before. This has been a useful vote, even to the extent that Spanish democracy could defend itself by triggering Article 155 of the Constitution, something that had never before happened.

In other words, it is a useful vote if you see useful as meaning resolving the problems people face which is the only way I can find to explain what is useful.

Moderator.- President of the Government, two final questions related to Catalonia, posed by my colleagues, and we will then change subject. The first is from Cristina de la Hoz, from "El Independiente". She says that all the polls point to En Comú Podem holding the key to governing in Catalonia and she asks you what you would say to Ada Colau and to Pablo Iglesias?

President of the Government.- I could say many things to them. What is not clear is whether they would pay me much heed.

I believe that these people should decide what it is that they want, don't you? One should adopt a position in life, because I remember… In the end, their approach was neither to support the declaration of independence nor to support Article 155. Of course, that is an excellent way to look great; in the end they have no position, which is what they haven't realised and which explains the situation they are in now.

Moderator.- But do you have any doubts regarding who they would support, should this be necessary?

President of the Government.- I don't know who they would support. I don't know. I am absolutely unaware of this because they have not told me. Nor have they told the public, have they?

Moderator.- President of the Government, in your speech you described - this caught my attention - the situation of the Catalan economy as a "sick engine". That is why I would like to ask you a question, which I believe is very interesting in order to see what can be done to kick-start this engine. The question is from my colleague Juanma Lamet, from "Expansión" who asks, "what economic and tax incentives would you approve to encourage the companies that have left Catalonia to come back to the region?"

President of the Government.- The best economic and tax incentive is legal certainty and confidence because no company left there because they had any tax incentive removed from them, or given to them. They left there because of a problem of mistrust, uncertainty and legal insecurity, which is very important in any walk of life, and obviously when you are talking about economic matters.

What I should say, ratifying what I mentioned earlier, is that we have made a growth forecast for next year of 2.3% but, if things calm down, we could very quickly raise this to 3%. This would then be the fourth straight year of growth in excess of 3%. 2014 was the first year of growth, but far from this figure; if I remember rightly it stood at 1.4%.

Hence, at this time, certainty and legal security are the main incentives for anyone.

Moderator.- So, if the situation calms down, as we all hope, do you think that companies may start to go back to Catalonia?

President of the Government.- Those decisions are down to them, but I have publicly stated on several occasions that I called for companies not to leave Catalonia and for those that left to go back. But that is a decision that is not down to me. It would be wonderful if, in the end, the government could force a company to establish its registered office wherever the government saw fit and opportune.

But I believe that it would be positive and, as part of the need to heal many of the wounds caused, this would undoubtedly be very important.

Moderator.- President of the Government, let's close the chapter on Catalonia. I think we have addressed this with a fair deal of speculation, but there was no other way.

Let us talk a little about regional financing, if that is okay with you. Will the system be reformed in 2018? Do you have an idea yet of what the general lines of this reform of regional financing may be?

President of the Government.- I will briefly explain to you the story behind the debate on the model of regional financing.

In January this year we held a meeting of the Conference of Regional Presidents, which was attended by the government and the presidents of the regional governments who wished to attend; they all came except two. One of the agreements reached at this Conference of Regional Presidents was to begin a review of the new model of regional financing. It was agreed there, firstly, to set up a group of experts under the obligation to issue an opinion, which they did - we have been given this - and then, we would set up a working group under the Fiscal and Financial Policy Council at which all the regional governments that so wished would be represented; they are all represented except two. Precisely today they will hold a meeting, and another one will be held before the end of the year.

I would like the new model of regional financing to be approved, but I would ask for one thing - for this to be backed by the Socialist Party, because with 137 MPs we cannot approve the model of regional financing by ourselves. If we add that there are quite a few regional governments run by the Socialist Party to the fact that we don't have enough votes, then common sense dictates that an agreement needs to be reached for two reason: first, because it is good to have an agreement on an issue of this magnitude, and second, because if no agreement is reached, we don't have enough votes to push this through anyway.

I hope that everyone acts with a constructive spirit and that we don't get into the dynamic, as is usual, of everyone blaming the indeterminate legal concept known as "Madrid" for their woes. No. This is a difficult debate: there are those who believe that it is more important to attend to the criterion of population, while others believe that there are other criteria such as the dispersion of the population or the ageing of the population, etc., which are also relevant. This requires an ability to create good will from everyone.

I can say that the model that was approved, that is in force today, received a "nay" vote from me. That was back in 2009. The People's Party voted against it, and hence, I agree that it needs to be reformed; but that necessarily requires a consensus. On this issue it is not valid to say "the model does not need creating, it is this or that…". No, you have to help to create the model as well, among other things, because it cannot be approved without you.

Moderator.- President of the Government, have contacts been instigated with the PSOE to go into these negotiations?

President of the Government.- Yes.

Moderator.- And how are they going?

President of the Government.- Fine, fine.

Moderator.- We are being told of late, President of the Government, that your relations with Pedro Sánchez, with the General Secretary of the Socialist Party, have improved greatly during this whole process of negotiating Article 155. I don't know whether that is true or not, but, if it is true, will this influence better negotiations with the Socialist Party?

President of the Government.- I believe that we have a democratic and reasonable level of dialogue.

Moderator.- President of the Government, also in relation to regional financing, Francisco Balado, from "La Voz de Galicia", asks whether you have thought about dealing with the requests from some regional presidents who call for greater transparency on the method used to calculate the Basque special tax agreement.

President of the Government.- Yes, I believe that the Basque special tax agreement has been calculated transparently. There was a debate on the Basque special tax agreement. Sometimes here, without knowing exactly why, we start to question everything. The Basque special tax agreement is recognised in our Constitution. We approved this between all of us 39 years ago, and moreover, it existed even before the Constitution. It existed in the time of Franco in the provinces of Alava and Navarre, and it has existed since the 19th Century, as many as 20 years before the PNV [Basque Nationalist Party] existed. In other words, the Basque special tax agreement doesn't even have anything to do with the PNV.

So, if we draw up a Constitution, we all reach an agreement on it, we establish it under our rules for co-existence, we have modified the Navarre Special Tax Agreement on several occasions over the last 40 years and we have implemented the Basque special tax agreement system. If we do all of that, why suddenly…? Don't we have enough problems without causing another one? In other words, where is this all coming from?

Hence, I am in favour of the Navarre and the Basque special tax agreements. I know that others will say that they are not and they may win more votes in other places, but someone needs to act with at least a little common sense and responsibility because, if not, I don't believe we will get anywhere.

Moderator.- The thing is, President of the Government, that it is not so much a matter of the Basque special tax agreement which, in the end, is no more than a consequence of the Navarre special tax agreement, that is, the elimination of the Navarre special tax agreement, but rather how this amount is reached, which is what some people are calling for greater transparency over.

President of the Government.- No, no. First, they argued against the Navarre and the Basque special tax agreements; then, they took stock of the arguments I have just set out and hence they switched tack to ask about how this amount is calculated. Like on every occasion over the last 39 years. Exactly the same as always.

Moderator.- President of the Government, to close off the issue of financing, and also in line with this debate, a proposal was made by the President of the Regional Government of the Basque Country (Lehendakari), [Iñigo] Urkullu to base the entire general system of regional financing on the model of the special tax agreement. "Would this be viable? Would the proposal by [Iñigo] Urkullu, the Lehendakari, to base all regional financing on the model of the special tax agreement be viable?

President of the Government.- I haven't seen that proposal. I read an article by the Lehendakari, who is someone who has tried, at least during the time that I have been in government, to always be constructive and make contributions. He published an article, but I didn't read there that he proposed a model for the whole of Spain based on the model in the Basque Country.

We have a model, which is established by the LOFCA, in place since the start of the Constitution, and I believe that this has worked reasonably well. I have had the chance to take part in the negotiations for several models of regional financing and, furthermore, I have taken part in this from a regional perspective, because I was Vice-President of the Regional Government of Galicia, and I negotiated a model of financing from the Vice-Presidency of the Regional Government of Galicia - [Joaquin] Alumnia was the minister back then. And I then had the opportunity, as Minister for the Public Administration Services, to take part in these negotiations.

This is not easy. The best model for negotiation is the one that works for everyone. They may all undoubtedly be good, and everyone may have their reasons and arguments, but, in the end, there are things in life that necessarily require consensus and agreement, and that is what we are working towards.

Moderator.- President of the Government, Juan de Dios Colmenero, from Onda Cero, asks you whether you already have the 2018 Budget agreed with the PNV.

President of the Government.- No. We are going to start negotiations on the Budget in January, although we have already had some talks with some parties. We have spoken with Ciudadanos, we have spoken with the PNV and also with the various formations in the Canary Islands. I believe that in January we will be ready to start and we will try and see whether, between us all, we are able to build a reasonable agreement and thus continue harnessing this buoyant economic period. When the 2017 Budget was approved, this sent out a positive message and, in fact, 2017 has been an economically positive year. So, if we approve the 2018 Budget, this will also send out a good message abroad.

Moderator.- President of the Government, along these lines, and without changing the subject, I understand, we all understand, that if the 2018 Budget is approved, you will see out the legislature.

President of the Government.- I intend, as I said before, to see out the legislature.

Moderator.- President of the Government, allow me, before going into the final part, to ask you about the reform of the Constitution. It is true that on 6 December, at the celebrations held in the Lower House, you cleared away a lot of doubts, but, I would insist, will the People's Party support, in the end, the creation of a sub-committee in the Lower House although no agreement has been reached by the Territorial Reform Committee?

President of the Government.- I hope that an agreement is reached by the Territorial Reform Committee that serves some purpose. I think that it is not badly seen that, 39 years after the implementation of the regional model that we have in Spain, we should review how things have gone.

Just think that 39 years ago what we call the State, which in reality means the government, was allocated 88% of all Spanish public spending while 12% went to local councils and nothing to the regional governments because they didn't even exist. Today, the regional governments are allocated significantly more than the State and, if we put the heading of pensions to one side, which is the most significant item, that's not even worth thinking about. At present, the ministerial departments have levels of public spending well below the levels that existed in 2007, such was the magnitude of the economic crisis we went through in our country. In just two years we lost 70 billion euros of revenue, which is no small amount. And that is how things stand.

Moderator.- So, President of the Government, you are not closed to the idea of a constitutional reform?

President of the Government.- No, I am not closed to the idea of a constitutional reform. In fact, I reached an agreement on the last constitutional reform with the former President of the Government in a quarter of an hour. This was a reform that was swiftly approved to incorporate what would then be known as the European Tax Reform, so that Spain could take on the need to have certain levels of reasonable public deficit and public debt as a constitutional principle. I believe that that also sent out a good message abroad: a country that states in its Constitution that "here we are not going to eternally be indebted" because this, as is well known, ends up causing lots of problems. And before that there was another constitutional reform, which was approved without any difficulties, which allowed EU citizens to vote in local elections in Spain.

I am not against a constitutional reform. The thing is that I believe that, as politicians, we must take into account many things when opening up a debate on something as important as a reform of the Constitution; one thing being the timing and another being the possibility of reaching an understanding and agreements. If we want to take decisions at this time on our territorial model, we must take into account the composition of the Lower House and who will accompany us in taking decisions on the territorial model because, of course, if what some of us intend is for us to do away with national sovereignty, I can say now that you can't count on me to do that. So, clearly, based on that, it is now much more difficult to undertake a reform.

But I am prepared to talk although it would be important for those who wish to undertake a reform to explain to us exactly what they want to reform, because that would also help the rest of us establish the criteria. The reform of the Constitution cannot simply be a slogan; the reform of the Constitution must have content, which is what needs talking about. Anything else is merely procedural.

Moderator.- But, President of the Government, to close off this issue and to try to appropriately direct this, beyond any technical corrections which, due to the passage of time, can be seen to be positive for the Constitution, and we are all thinking about the precedence of men over women in the right of succession to Head of State, for example, of other suchlike; we always talk about the territorial fit, particularly with Catalonia in mind. In this regard, is there any margin to amend the Constitution?

President of the Government.- There is a margin to change anything in the Constitution, but there are some principles that many people wish to maintain: for example, national unity; for example, national sovereignty, in other words, that all the Spanish people decide on what Spain should be. The man in Almeria must decide on La Rioja, in the event that La Rioja intends to adopt an approach such as the one we have seen adopted recently elsewhere. That is very important. The principle of equality of the Spanish people is a principle… Yes, there is a certain margin: you can do away with it. But there are many people that do not agree with doing away with the principle of the equality of the Spanish people.

So, there are many issues that seem to me, and to many other people, well enshrined in the Constitution and there is hence no need to do away with them. There are those who are not like-minded and hence, we will need to do what was done back then, that is, something whereby everyone gives a little ground but which allows us all to live together.

What was the great success of the 1978 Constitution, that we sometimes forget? At that time, there were people in Parliament who had been part of the Franco regime, in government, some of them were ministers; and there were other people that had come back from abroad, who had been in exile. Many things were agreed there and there were many people who had to give ground on some of their beliefs. There were people who did not want a State of autonomies, there were others who wanted two or three, and there were others still who wanted even more. I remember the debate that was held on the autonomy of Segovia and on certain other areas, such as Murcia and Albacete.

In the end, an understanding was reached and an agreement on which everyone had to give way, and today Spain is the most de-centralised country in the world; quite simply that, in the world. And today Spain has a level of de-centralisation - I am not talking about administrative de-centralisation, but rather administrative and political de-centralisation - as never before in its history. Can anyone name a country for me with a greater level of de-centralisation than Spain today? Let them speak. Can anyone quote any time in the history of Spain in which there has been a greater level of administrative and political de-centralisation? Let them also speak. But I fear that the problem is not one of powers; the problem is that there are people who hold other approaches that are different to the vast majority of Spaniards.

So, let's see if, between us all, we are able to build. But it is very dangerous to say to people "I have this idea". Listen, and if I have a different idea; what then? That is what the law is there for, to order our co-existence and that is why the law cannot be ignored, which is what we have seen recently.

Moderator.- Marisa Piqueras, from Europa Press, asks if you now have a date set to sign the State Pact on Gender-based Violence. I believe there was a commitment or an idea to do this in December, wasn't there?

President of the Government.- In principle, if we all do things right, this should now be ready to be signed. That is what I believe.

Moderator.- Before the end of the year?

President of the Government.- Yes, I believe it will be possible to sign this, if people want, before the end of the year.

Moderator.- Manuel del Pozo asks - this issue is important - what possibilities Luis de Guindos has to become Vice-President of the European Central Bank.

President of the Government.- This requires a majority, as you know. I think that Luis de Guindos has a great deal of credit and standing, and Spain is a country that in 2012 was seen in a certain way by our European partners, whereas we are now viewed differently, among other reasons, because there were people who applied a successful economic policy. At any event, for the time being, we have not presented the candidature of Luis de Guindos; but it is clear that he is someone of good standing in Europe.

Moderator.- To some extent, you cleared away the uncertainty the other day when you said that you had not done anything wrong to justify not standing as a candidate once again. Can we take it for granted that you will be the People's Party candidate in the next general elections?

President of the Government.- That will be decided in the future. I clearly feel in good shape, so let's wait and see what my party, and then the people, have to say.

Moderator.- And lastly, President of the Government, I have to say this. The judge has called for an oral hearing on the information deleted from [Luis] Bárcenas' computers. This is the first time that a political party, a political formation, has appeared as defendant as a legal entity. My question is as to whether this hearing concerns you.

President of the Government.- I would prefer this not to happen, wouldn't I? At any event, this will be attended by public servants who I believe have conducted themselves as people tend to do in such circumstances. But, as I said at the beginning, I am under an obligation to respect the courts' rulings, which I will duly do.

Moderator.- President of the Government, to close, now that we have a little perspective and we have seen the harm done to Spanish society by the combination of the economic crisis and corruption in politics - I don't say political corruption but rather corruption in politics - with this perspective, do you feel that more could have been done?

President of the Government.- Yes. All of the acts of corruption we have seen in recent times are not good, and nor was the economic crisis. Some people should probably have behaved more honourably, and on economic matters some decisions could probably have been taken that would have been better for Spain, but I like to look at the positive side of things and to the future. I think that Spanish society has been able to overcome these two crises and it will come out much stronger now to face the coming years.

Moderator.- President of the Government, we have strictly kept to our time allocation. Thank you very much. Thank you all very much.

President of the Government.- Thank you very much.

(Transcript edited by the State Secretariat for Communication)

Non official translation