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Press conference by President of the Government at presentation of "Agreement for economic reactivation and employment"

Thursday 9 July 2020

PEDRO SÁNCHEZ_ President of the Government

Dear Antonio, dear Gerardo, dear Unai, dear Pepe, leaders of the business organisations and leaders of the workers' representatives of the trade unions.

Dear colleagues on the Council of Ministers and also State secretaries, who are here with us today.

And to the media, thank you for the work you do.

Dear friends,

I wanted to begin this speech by declaring my recognition of the event we have just held, of the importance it has for my government, and also for the social stakeholders, for their extensive work, as has been mentioned by the speakers here and for the unity and agreement we can observe in this recovery phase that we are embarking on.

Undoubtedly, the fact that the main trade unions and business organisations are able to reach a sound agreement on a regular basis, as we have seen, Antonio mentioned this before, over recent years but more importantly over these last few months, in relation to the health emergency is, I believe, an excellent indicator of the democratic health of our country and a message of confidence that we can send to ourselves as a society, at such a critical time as we are facing now, but, above all, we send this message to our European partners and also to the whole world, because we have economic relations with the whole world.

These agreements have also been forged in record time, against a backdrop of tremendous challenges and measures with unprecedented scope in the recent history of our democracy. That is why I wish to recognise the work of the representatives of the social stakeholders, but also clearly of the ministers, and the vice-presidents of the government who have been involved because, in the end, holding Councils of Ministers - two a week - involves a workload for a great many people, day and night, that I wish to recognise.

But what is clear is that when Spain reaches internal agreements, it makes progress. When Spain makes agreements, it gains confidence in the future. That is what we are signing off on today under two pillars - one is to protect jobs and companies and continue developing something I feel is vital, because it is fundamental, and that is reactivating the economy recovery and economic activity after this health emergency which, fortunately, thanks to the healthcare professionals, to the public servants, and also to private sector workers, we now have channelled and we now have under control.

Over these months, I believe that we had to act with determination, which is what we have done. In the first phase, which we could call, as I have said before - resistance - the short-term priority was to draw up an action plan that could protect our society from the devastating effects of the pandemic. The aim, consequently, was to resist, maintaining our productive system alive and protecting as many jobs as possible.

We are all aware of the milestones on this path. We are all familiar with them because we agreed them together and, if not, we spoke about them together. On an economic front, we introduced a liquidity plan, with no more and no less than 100 billion euros allocated to prevent financial tensions in companies, above all in small- and medium-sized enterprises, and to facilitate the maintenance of activity. In addition, as many as 3.4 million Spaniards have been subject to a Temporary Lay-off Plan (Spanish acronym: ERTE), which has allowed them to maintain their jobs at a time of extreme difficulty for the companies where they work. And moreover, 1.2 million independent contractors have signed up to the extraordinary benefit for the cessation of activity for the first time ever.

On a social front, furthermore, we introduced a very powerful instrument - the Minimum Living Income.

The resistance also applies to thousands of owners of small- and medium-sized enterprises, the self-employed, and I wish to acknowledge their resistance, and that of thousands of family companies, and the structure of family companies in our country is very important, and they have found a way to reinvent themselves in these very complex and unprecedented circumstances we have gone through. With patience, with tenacity, with the ability to restructure and with resistance. Our country also has these traits, which is why the agreements we sign today, in the government's opinion, are very valuable. Because they make the efforts of everyone worthwhile.

Together with the phase of resistance, we are now fully entering, as the subject of this agreement clearly states, the reactivation and job creation phase. After this first phase of resilience of our economic and social fabric, we begin the economic reactivation.

The challenge of reactivating our economy is undoubtedly enormous, because the scale of the crisis facing us is also clearly enormous, not just for Spain, but for the whole of the global economy, and significantly for the area where we are located, which is the European Union.

Despite the difficulty, while we are keeping the virus at bay, the reactivation is our main undertaking. But allow me to tell you, the bases of the recovery began on the first day of the pandemic, with the first of the measures to protect workers and companies approved by the government and which has allowed us to maintain the activity during this time.

Henceforth, the reactivation must be bedded down in two time periods:

In the short term, we must adapt the action plan to the de-escalation of the health emergency. We have already started, with the specific plans for strategic sectors for the GDP of Spain. There you have, for example, the tourism sector, and also the automotive sector. This is the context and the line of action of the extensive economic package approved today at the Council of Ministers, which I will outline later.

And secondly, in the medium and long term, this is the first announcement that I would like to make to you:

We have approved something very important with the social stakeholders: the commitment to shortly reach an agreement for economic reactivation and for job creation, reactivating the social dialogue boards already set up and that unfortunately we had to postpone as a result of the pandemic and because social dialogue was channelled into finding a response to the pandemic. We must ensure, both at a public and at a private level, that the economic recovery creates as many jobs as possible, particularly as many skilled jobs as possible. And furthermore, we must address the different transitions that have speeded up as a result of this pandemic - the energy and ecological transition is one of these, and clearly the digital transition as well. And training must be an inherent part of this transition. The recovery, the reconstruction of our economy, must be green, it must be digital and it must clearly also be inclusive.

The document we sign here today is an historic commitment to ensure that Spain moves forward without leaving anyone behind.

And to achieve that, we will encourage the reincorporation - and I feel this is very important - of workers back to their companies, those workers affected by the Temporary Lay-off Plans as a result of the COVID-19 crisis, prioritising adjustments in terms of working hours rather than in jobs. This is one of the main structural reforms the government and social stakeholders are jointly implementing.

Similarly, companies will boost the re-hiring of workers with temporary employment contracts whose labour relations terminated during the COVID-19 crisis, obviously when the circumstances allow this to happen, and as far as possible with permanent employment contracts.

We will develop effective mechanisms for training and the re-training of workers with new skills, particularly in the field of digitalisation, at a technological level, to be able to take on jobs that are created and their redeployment in the same company, or in another company or sector, particularly in those sectors affected by the reconversion and transformation process that has been speeded up by COVID-19.

We are going to establish a suitable framework for working off-site, which is fundamental for adaptability in the working day, with the aim of increasing the productivity of companies, while improving the situation of workers, work-life balance and family co-responsibility, and the capacity to adapt to the demands of the new economy.

We are going to develop a suitable framework for the shared contribution for the Temporary Lay-off Plans on economic grounds, on technical, organisational and production grounds. I feel this is one of the main structural transformations that we will, I stress, address jointly.

We will set in motion, as Unai has already mentioned here, the representative, the Secretary-General of Comisiones Obreras, a Pact for Industry, a great agreement for industry that allows the country to re-industrialise, which is essential, under different parameters of digitalisation and of inclusion, and also clearly of economic transition, which we must speed up. I have said this often - if this has been the price we had to pay for a health emergency, I don't want to imagine what the price would be of a climate emergency. Between us all, we must leave future generations with a much more environmentally sustainable country.

We will also boost, as I said, the "green" transition of all the productive sectors, of the circular economy - we have been laying the foundations of this over recent months, committing to public-private collaboration, to an investment in industry, in agriculture, in competitive services, in summary, that contribute to the ecological transition and the creation of quality jobs, with the aim of not leaving anyone behind, and also clearly to the modernisation of our economy.

We must also boost the digitalisation of the economy, of companies. In our country, only one in four of our small- and medium-sized enterprises are digitalised. We must now make that leap. To do that, I believe that the acquisition of digital skills through one's career and the incorporation of new technologies in companies, particularly SMEs, is key. And this digitalisation must also have, as Gerardo rightly said, a territorial perspective. We must structure the country, and I believe that this pandemic can also offer us the opportunity to much more effectively and fairly tackle this demographic challenge that all of us here share, as do the vast majority of the Spanish people.

We must modernise active employment policies as we have said on numerous occasions.

We must support the social economy, we must boost the care system, we must support the self-employed, we must modernise our labour framework, which is very clear. We must strengthen public services… in short, we must come out of this with as much social cohesion as possible, which must go hand-in-hand with a tax reform that ties in this fiscal justice with the necessary social justice.

We will address the necessary adaptations to strengthen and guarantee the long-term sustainability and sufficiency of the public pension system, thus protecting the purchasing power of pensioners, and hence provide our elderly folk with reassurance.

And we must boost, as has been said here by Pepe and Unai, effective measures, which Antonio also mentioned, to uncover the black economy, fighting fraud, insecurity and tax evasion.

Dear friends, this Agreement for Reactivation and Employment we have signed today provides continuity to the important agreement reached last week within the framework of social dialogue and endorsed by the Council of Ministers, to extend the ERTEs until 30 September, which will help a great many companies and workers to make the change to the new normal, maintaining economic activity and jobs to the utmost.

The ERTEs have clearly proven to be an extraordinary and effective tool to save hundreds of thousands of jobs and companies which, without them, would possibly not now exist, but would have been lost as a result of this health emergency.

The goal now, which I summon the social stakeholders to work on, and I am aware that they are on the case, is to make these ERTEs a structural instrument of internal flexibility for companies, and to protect jobs, as exist in the most advanced countries in Europe.

We must hence move towards a new permanent framework of regulation, with co-financing for this instrument, which offers greater legal certainty to companies and workers, and less vulnerability and volatility in the labour market, which will generate a greater contribution to economic stability and the maintenance of the business fabric.

The Agreement signed today must also facilitate the creation of quality jobs in this recovery, with the commitment from us all to fight the black economy, adopting measures to facilitate the training and re-skilling of those workers affected by structural difficulties in their sector and to improving the regulation of off-site work and flexibility in the working day, which must serve to facilitate the work-life balance. And this task is pending.

Managing the effects of COVID-19 is a major challenge for our companies. Many businesses have seen their levels of debt rise significantly, endangering their very survival. And this is not because they have carried them forward but because many of them had to close down. Hence, I can also announce that we have set up a Fund to support solvency, with an initial provision of 10 billion euros, which will invest in those strategic companies for the productive and economic fabric that ask for them with the aim of guaranteeing their viability. The Fund will employ various financial instruments, such as debt or a stake in the share capital of these companies.

No-one will be left behind in Spain; neither workers nor companies.

This government will do everything it can to ensure the viability of sectors that are considered to be strategic for the Spanish or regional productive fabric, due to the sensitivity of their social and economic impact, their importance for the health and safety of people, for infrastructures or for their contribution to the smooth functioning of the markets or for communications.

The Fund will be managed by the State Enterprise for Industrial Holdings (Spanish acronym: SEPI), focusing on the highest criteria of rigour, transparency and accountability, with the clear aim of guaranteeing the continuity and solvency of companies that are perfectly viable and solvent and that are at the heart of our business and productive fabric.

It will act at all times in accordance with the temporary framework of European Union State Support, which has been made more flexible during this pandemic.

Similarly, the actions of the Fund we have approved today will be compatible and backed by additional European resources under the new Financial Solvency Instrument, designed at a Europe-wide level and which we hope will be approved shortly.

I would like to once more stress the key role that Nadia Calviño is playing through the Official Credit Institute (Spanish acronym: ICO) with the COVID guarantees for lines of credit, which is the mobilisation of an unprecedented level of resources. This has been an example of an efficient operation that has provided liquidity to more than 400,000 companies in record time.

98% of these are SMEs or independent contractors. And a sum of more than 65 billion euros in financing has now been disbursed, a high figure compared with the initiatives of our European partners. We must now use this mechanism to facilitate the reactivation and growth. To do that, we have set up a new line of ICO guarantees for investment, to the tune of 40 billion euros, in addition to the previous line of 100 billion.

In addition to that, today we have approved two important measures to strengthen support for the internationalisation of our companies, which must be one of the drivers of the recovery: increasing from 10 to 100 million euros the provision of the Fund for the Internationalisation of Companies (Spanish acronym: FIEX), managed by COFIDES and enhanced flexibility to the CESCE line of guarantees of 2 billion euros that we set in motion in March in order to also cover listed companies.

Lastly, we have approved key measures to implement sector plans to support tourism and the automotive sector, presented here just a few days ago.

As regards tourism, we have launched the foundations of the sustainable tourism plans at destination, and measures to alleviate real estate, mortgage and rental costs of tourist premises and travel agencies. As regards the automotive sector, we have formally approved the Fleet Renewal Programme, which is one of the basic pillars of the Plan to Boost the Value Chain of the Automotive Sector that we presented here almost three weeks ago.

The entry into force of the Fleet Renewal Programme hugely stimulates the demand for vehicles, which is so necessary for such an important sector for our country.

These very important measures come on top of others recently adopted, such as the important Royal Decree-Law in the field of renewable energies adopted by the Council of Ministers on 23 June, which will allow the goal we all share to be speeded up so that the ecological transition can act as a green lever to help the Spanish economy recover, by incentivising investments in renewable energies and in energy efficiency, and by developing new productive processes, with the important associated economic activity and creation of skilled jobs.

The need to boost the decarbonisation and sustainability agenda as a response to the crisis is shared at a European level and, in this context, Spain has all the qualities to be in a position to head up this process.

Following the first phase of resistance, the reactivation of our economy will allow us to take steps towards the third phase: namely economic recovery and the return to growth and job creation.

The pandemic has hit our productive fabric and job market very hard. But Spain has some important assets, and the recovery can also be supported by implementing those structural changes that were pending and which have been introduced in the extraordinary situation caused by COVID-19, the positive impact of which will be extended into the future, once the health crisis is under control.

Among other things, for example, a resilient healthcare system, the extension of off-site work and more flexible timetables as an instrument to improve the functioning of the job market and home-life balance; boosting digitisation in the field of education, of companies, particularly SMEs, and worker training; more efficient procedures for public recruitment; the implementation of the digitalisation of the Public Employment Service; the programme to reform and digitalise the administration of justice and greater public-private collaboration in many sectors.

Dear friends, the agreements we have signed today are thus extraordinarily important for the reactivation and subsequent recovery, and to help boost these important assets and strengths in our country through social dialogue. And I believe that we should legitimately feel proud to see what we are implementing, between us all, on a joint and united front. Because we are capable of uniting to overcome a terrible situation, that was unexpected and also to move forwards together towards a better future. Because we have understood what these amount to and those changes that have accelerated during this pandemic.

We must move towards a strengthened, healthy, renewed Welfare State, without the defects it has shown to have.

Despite the scale of these decisions, we will not stop there. As Unai rightly said, the Investment and Reform Plan that is being drawn up and headed up by the Third Vice-President of the Government and Minister for Economic Affairs will play a fundamental role in the recovery. This will be submitted to Brussels for its financing under the new European Recovery Fund which we hope to receive soon in the month of July, and which the Government of Spain is working on. This is a public investment plan that will also mobilise private resources which will lead to the implementation of transforming projects from a point of view that is positive for our economy and for our society.

We are talking about a public investment in the order of 150 billion euros which, in turn, as I said, will free up additional resources from the private sector. This may seem like an astronomical figure, and it is, but the scale of the fall in economic activity in our country, as a result of the lockdown and the health emergency measures we had to take, make it worthwhile.

The preparation and implementation of the Investment and Reform Plan is thus a major challenge that will require the deployment of all the talent and all the potential of our country. And the government, have no doubts about this, will not skimp on any efforts in its implementation, to which end we want to count on the participation and collaboration of all of society, particularly of workers, companies, universities, technology centres and also public authorities, because we live in a decentralised State.

The success of this plan will be a clear demonstration of the potential and resilience of our country, capable of recovering its economy in two years and we need to do this by also transforming the whole structure, becoming greener, more digital and more inclusive.

We know the path to take. We have shown this by extending the ERTEs. We have also shown this through our ability to design specific plans such as those we have already approved, on tourism and the automotive industry, in record time, on a large scale. We will continue to do this over the coming weeks with the digital agenda, which we will present shortly and with the specific Action Plan for Science - this is another of the main lessons we must take away from this - the contribution of science.

And we will continue to prove this with this Agreement for Economic Reactivation and Employment, the talks on which we begin today. This dialogue must contribute to stabilising our economy over the coming years.

We are laying - and this is a perception I believe we can all share, the foundations for a new economy, which has two essential requirements. The first is consensus. Without consensus it will be difficult to lay the foundations for this great transformation towards this new economy. And to do that, the role of the social stakeholders is crucial.

The scale of these challenges requires consensus from the whole of society, structured through the government, Parliament, the regional governments and local authorities. Hence, consensus at a national level in all areas.

And secondly, we are convinced that Europe must definitively confirm its role as key in the equation of these investment and reform plans that we must bring to fruition.

United, we can create a common and cross-cutting project, based on agreement and negotiation, to re-launch our economy. We aspire to create a better situation than we had before.

We are definitively heading towards a new economy, with three characteristics: green, digital and inclusive, without leaving anyone behind.

I want to end my speech by calling for confidence in Spain. This event and this agreement is precisely that, a message of confidence in our country. Over recent weeks, close to 1.5 million people have come off ERTEs to resume their labour activity. The number of National Insurance contributors has increased by 270,000 people since it bottomed out in April. The indices on consumption also offer encouraging figures given the acute problem we face.

This Agreement for the Economic Reactivation and the commitment to create jobs are heading in the right direction. After the fall this year, the economic recovery will come and in what is left of this term of office we will be capable of creating, with contributions from the public and private sectors, many new jobs in new sectors that will flourish as a result of this great transformation we have ahead of us.

Better quality jobs that move in the right direction for the economic recovery. We know that the challenges remain huge, that the gravity of the crisis is what it is, that there will be still more tough months ahead of us, which will require a great deal of effort under pressure, during which time the alarms and the bad news will go side-by-side the inevitable and sound triumphs of progress. Not only at a labour and economic level, but also regarding the health emergency.

But, and I will end on this note, we have an extraordinary country and we must all rise to the occasion. The signs of these days clearly indicate that, if we act on a united front, as we are doing today, we can make this recovery happen quicker and more resolutely. Today's event is one more step and, in turn, it is a guide to the path we must follow to make progress more quickly. I have said this on many occasions, unity has not only saved lives, but it can also save companies and jobs.

Hence, congratulations to all those parties gathered here today, to the business organisations and trade unions. You have the government's full recognition for the work that has made it possible to take this new step in winning the future we deserve as a country. This is the path to take - the sincere union of all wills, talents, capabilities that we treasure as a society committed to progress and a common well-being.

As I said at the start of my speech, when Spain forges agreements we make progress. When Spain forges agreements, Spain gains in confidence and wins its future. So let's protect jobs, let's protect companies and move forward together towards this future of economic recovery and transformation.

Thank you very much.

(Transcript edited by the State Secretariat for Communication)