Speech by President of the Government at event to sign social agreement to raise minimum wage

Moncloa Palace, Madrid

Madam Minister for Employment and Social Security; Messrs. Presidents of CEOE and CEPYME; General Secretaries of UGT and Comisiones Obreras; public officials, ladies and gentlemen; dear friends, a very good day to you and wishing you all a Merry Christmas.

Today is a good day to take stock of Spain and I am pleased to be able to do this together with you - the social stakeholders, workers' representatives and business associations.

We are on the verge of closing off this year, 2017. It has not been an easy year, but thanks to the efforts of all the Spanish people this is indeed a year that offers us a horizon of optimism.
Spain is a great nation; it is an open, plural and integrating country. We are one of the 15 most powerful economies on the planet, and one of the best democracies in the world. We continue to grow and create jobs. We are closer to achieving our goal of 20 million people in work and we want the recovery to filter down to everyone.

The serious economic crisis we suffered took away the hope from many of our compatriots, destroyed 10% of our wealth and led to 3.8 million jobs being shed. During those very tough times, there were those, both within and beyond Spain, who doubted the ability of the Spanish people to overcome these difficulties. They said that we would have to renounce our economic sovereignty and ask for a bailout. Some people thought that we would have to renounce our membership of the Euro and there were even those who believed that we would have to renounce the very basis of our system of social well-being.

But the tenacity and courage of the Spanish people have led to many crises being overcome during the course of our history. When we work on a united front, we are capable of achieving many goals. Today, thanks to the efforts of everyone, we know that this year, 2017, will close with the recovery of the level of Gross Domestic Product lost during the crisis and we also know that this year we will beat the records set in each of the last three years in terms of the number of jobs created. We will not have created half a million jobs this year but in fact almost 600,000.

Together with the employment figures, there are many other economic indicators that confirm the robustness of our economic recovery. Spain has now enjoyed four straight years of expansion: we are growing at a rate in excess of 2%, almost double the Eurozone average and well above those of such major economies as Germany, France and Italy, and we will close off 2017 with GDP growth of 3.1%, once again well above the Eurozone average.

The Spanish economy is now both much more competitive and focused on foreign trade. We export more, which has allowed us to put together a positive foreign trade balance for several years in a row. This means that we are growing through our own resources without going into debt.

All of the qualitative indicators ratify this upward trend. By way of example, allow me to quote a few figures from this month of December: the manufacturing index stands at its highest level since 2007; household and company financial debt stand at the same levels as in 2006; the number of property mortgages has grown by 9%; the collection of National Insurance contributions has grown by more than 5% year-on-year, which is the best figure since 2006, and mass consumption is growing by more than 4%.

We are also aware, and this is the most important fact, that there are still some 3 million Spaniards looking for work and that should spur us all on - the government of the nation, the regional governments, the local authorities, the social stakeholders and companies - to keep working together. The efforts that have brought us to this juncture have been worthwhile and encourage us to keep on working to help foster the economic recovery so that this filters down to each and every last person needing and deserving this.

The agreements adopted in recent years allow us to view the future with optimism; optimism adapted to the challenges we face. These agreements have been key.

In the investiture speech I made a little over a year ago, I undertook to give a renewed boost to dialogue and social awareness, and we have begun to follow through on that in 2017. Accordingly, we established the priorities to provide a response to the situation of people with the greatest difficulties in finding a job - the long-term unemployed, young people and those on the lowest salaries at the level of the minimum wage.

I want to thank the workers and business representatives for their commitment to social dialogue which has proved so fruitful during this year now closing. Social dialogue has enabled us to improve the Employment Activation Programme and the extraordinary extension of the Prepara Plan until April.

This climate of forging agreements also served to approve, a year ago now, the Royal Decree on urgent measures to promote the National Youth Guarantee System. This measure allowed us to conclude 2017 with more than 1 million young people registered on the Youth Guarantee Programme. This programme has been successful, with 40% of these young people finding work since it was started up.

And in this same climate of forging agreements, we agreed with the Socialist Party to raise the minimum wage by 8%. Today we have taken another step in this direction. The agreement we are going to sign designs, as you are aware, a multi-year rise in the minimum wage and our goal is to reach 850 euros a month by 2020, almost 12,000 euros a year paid out in 14 payments, as we were reminded here this morning. This rise seeks to contribute to ensuring that the positive effects of the economic recovery reach everyone. This is a reasonable agreement and it is a sustainable agreement, which links in the increase to each year that we continue to enjoy the economic recovery that began back in 2014. Since then, we have grown by more than 3% and created more than half a million jobs each year.

So, the agreement we sign today will maintain the annual rise in the minimum wage, provided that economic growth stands at no less than 2.5% and at least 450,000 jobs are created each year. These conditions are very prudent, because they are below what we are already achieving. As I mentioned a moment ago, we will grow by 3.1% this year, 2017, and more than 600,000 jobs will be created.

Job creation, as you are aware, is and remains the main goal of this legislature. We want to see strong job creation deriving from our economic growth and in this task the role of the trade unions and business associations is fundamental. That is why I want to publicly acknowledge their contribution to making 2017 the best year for employment in like-for-like terms.

We want the recovery to reach all homes and all workers, particularly those on the lowest wages. We don't want anyone to be left behind which is why we are going to improve wages starting with the lowest. In reality, the government, as you know, can only set the minimum wage, because salaries are set in collective bargaining agreements. According to our estimates, 530,000 people could benefit from this 4% increase in the national minimum wage proposed for 2018.

Today's agreement is one demanded by Spanish society, a national agreement that helps enhance job equality, with fair labour conditions. This is an agreement that requires a general consensus, including with other political forces, which I trust will rise to the occasion.

Ladies and gentlemen,

Our democracy has found a way to sign major pacts with the social stakeholders and this is one of them. 40 years and two months ago yesterday, barely 150 metres away from here, the Moncloa Pacts were signed. The first of the major agreements for the economic stability and social progress of our economy was forged back on 25 October 1977, and we want to continue down that path of hard work and achievements.

I would like to end by expressing, on behalf of the government, our gratitude to all the Spanish people for their brave and fighting attitude at the worst time of the crisis; our gratitude to Spanish society for knowing how to respond with patience, with energy and with perseverance. Spain is a great common project that improves with the help of everyone. It will assuredly improve thanks to this good agreement that comprises both responsibility and generosity to the benefit of those workers on the lowest salaries.

I will end now. Many things unite us: we are united by the firm commitment to do more for those who need it; we are united by the major goal of reaching 20 million people in work by the end of 2019; we are united by the desire to lay the foundations for better quality jobs that boost the tremendous potential talent that exists in Spain and we are united by the determination to improve our country, this great nation called Spain.

I wish to thank all of you for working towards the many things that unite us in our desire to improve Spain.

Enjoy the festive period. Thank you very much.

(Transcription edited by the State Secretariat for Communication)

Non official translation