Speech by President of the Government of Spain at the round-table of leaders "Advancing a New Social Contract" of the Davos Agenda

Moncloa Palace, Madrid

SPEECH BY PESIDENT OF THE GOVERNMENT OF SPAIN, PEDRO SÁNCHEZ

Q.- In many countries, the pandemic has revealed these inequalities, some of them deep rooted as in the case of structural youth unemployment. So can you tell me about some of the measures that Spain has taken in response?

President.- Ok, thank you and good morning to everyone. I would say that COVID19 has prompted a massive policy response with large similarities in the instruments used and objectives pursued by most governments. We have changed the paradigm.

From the start of the pandemic, Spanish Government set out what we call a "social and economic shield" to protect families, workers and companies. Let me highlight four of these measures:

1. Short-time work and furlough schemes, a tool that we want to turn into a permanent fixture in our toolbox.

At the height of the first wave of the pandemic, 3.6 million workers were covered by these schemes. At the end of 2020, this number was down to more or less 750.000, a 79% reduction since April.

More than 750.000 young workers under 20 have benefited from these.

The second is: Minimum Living Income, a permanent measure that will support more than 850 thousand vulnerable families to tackle structural inequality.

The third: Law on tele-working to provide flexibility to both companies and workers.

And finally, bank-guarantee facilities of over 87 billion euros.

This has allowed companies to receive 115 billion euros in financing, supporting more than 600.000 companies, mostly SMEs and self-employed.

And now my country, as you know, is one of the main recipients of the Recovery and Resilience Plan, with an allocation of nearly 70 billion euros in transfers for the period 2021-2026.

Three aspects need to be emphasized of our Plan:

1. Investments that will create jobs and transform our economy.
2. Enact long lasting reforms that will raise productivity and also competitiveness.
3. Upskilling and re-skilling of workers into sectors with high demand, mainly ecological transition and digitalization. In my view, this is key. Thank you very much.

Q.- Oh thank you so much prime minister I mean I´m very interested, you talked about the transition into kind of green jobs and what that might entail. I mean do you think just very briefly that, I mean that really does require the design of a new social contract? Because previously you just talked about people falling out of work, rather than this fundamental transition, we got often people who are in a very good work, in need to switch jobs if we are going to have a green new deal. Can you say a little bit about what specifically Spain is doing on that front?

President.- Oh absolutely, at European level you know we have agreed some weeks ago to further 55% reduction of greenhouse gas emissions by 2030. The Spanish government is second to none in the ambition to progress towards a decarbonized economy. Early last year we formally approved the state of climate emergency and we will soon approve in the parliament, in the national parliament a major law on climate change.

By 2030, 74% of the electricity will be generated through renewable energy in coherence with a trajectory towards a 100% renewable electricity sector in 2050. In the next three years, we will invest 1.5 billion euros in the development of green hydrogen projects and about 1 billion in the circular economy, is a key lever of industrial modernization in Spanish economy, and we will also channel resources from the Recovery and Resilience Plan to renovate 500.000 homes and buildings and enhance their energy efficiency, so we are very committed with this decisions. We want to also to integrate the social perspective and also the territorial perspective in the ecological transition and therefore we found a huge opportunity to create jobs, new jobs, in new sectors, and of course we have the challenge of the employability, especially for the youth.

Q.- How do you see this socially, culturally as well as economically? (on youth unemployment)

President.- Thank you, Hilary. I think that Youth unemployment is unacceptable high in Spain. Last available data show that 40% of workers under 25 year's old can´t find a job. Since this pressing issue is at the centre of my Government's agenda, we are ready to take decisive action at this front. Let me highlight three areas of intervention in this respect: First, education and vocational training: we have just approved a new Educational Law and are working on a law on vocational training, which I personally consider is crucial. Second, digital skills: we will spend 2,5 billion euros in a massive plan to advance digital skills, with a special focus on girls. And finally, job contract regulation: we will review all incentives to hire young workers and will reinforce apprenticeship contracts, so that they are used not as cheap labour, but to ensure continue learning of young people.

Against the context of the Recovery and Resilience Plan, we will modernize the design of active labour market policies with a view to enhance youth employability. In so doing, we will invest more that 750 million euro especially dedicated to youth employment. So, yes, we consider that this is one of the major challenges to work on in the short and medium term.

(Transcript edited by the State Secretariat for Communication)

Original speech in English