You are in:

Speech by President of the Government of Spain at inauguration of Economic Symposium "Wake up, Spain!"

Madrid, Monday 12 April 2021

SPEECH BY PRESIDENT OF THE GOVENRMENT OF SPAIN

Good day,

First of all, I would like to congratulate Pedro J., the editor-in-chief of the daily newspaper El Español, and the whole community of the daily El Español for organising this very opportune economic forum.

We clearly find ourselves at a crucial point in time. As the editor-in-chief of El Español rightly said, in just a few days' time, we will submit to the European Commission the Recovery, Transformation and Resilience Plan of the Government of Spain, after months of a great deal of hard work and of intense dialogue with the social and economic stakeholders present here today and also with the European authorities.

A Plan that will serve to achieve two goals: the first of them, the short-term economic recovery, but also the major transformation, the great reconversion, of our economy, making it more competitive and hence more prosperous in the medium term. Spain can. And that is what this great work, which I would say is collective, is called, an attempt at modernisation and to enhance competitiveness that we will set in motion in a few days' time. And as the editor-in-chief of El Español rightly said, as Spain has always found a way to do when it has faced major challenges over the course of our recent history. The consolidation of democracy, of our democracy, which is still young, is probably the most fitting example, but also Spain's membership of the European Union, its membership of the Eurozone, the construction of the Welfare State, the extension of rights and freedoms, the modernisation of our economy in the 1990s thanks to the structural funds, which amounted to 8 billion euros in little more than six years. Here we are talking about 140 billion euros in six years.

Ladies and gentlemen, Spain is a success story. And I have no doubts that this new chapter will also be a great collective success story, which will translate into greater economic growth, more capacity to create jobs and also to enhance social well-being. After these long and very hard months of the pandemic and thanks to the action of science and, why not say it, of the concerted action of the European Union as well, because we are not only buying these vaccines on a centralised basis but we are also providing the pharmaceutical companies with the economic resources to speed up the research and production processes of these vaccines. Anyway, as I was saying, after the long months of the pandemic and thanks to science and to the concerted action of the EU, we find ourselves now at the beginning of the end of this health, economic and social emergency.

Many of you will ask at what rate the economic recovery will take place in our country. And the answer is clear; the recovery will take place hand in hand with the rate of vaccination. The faster we vaccinate, the faster we will recover. And we are already achieving that, because the vaccination rate is speeding up, setting record after record in the month of April. Half a million vaccines administered a day last week. In total, more than 10 million vaccines administered, thanks to conscientious planning together with the regional governments through the Ministry of Health, with milestones and targets, with a schedule that I wish to describe as prudent and well thought out, so that we can address the most important vaccination campaign in the history of Mankind, and thus also of our country, with guarantees and determination. We will do better each month than the previous month. This week, for example, Spain will have more people vaccinated with the full dose, that is, two doses, than the number of people who have officially notified contracting the disease.

- In the week of 3 May, that is, in just a few weeks, we will have 5 million people fully vaccinated.

- By the first week of June, we will have 10 million fellow countrymen vaccinated.

- And by 14 June, this will amount to 15 million people vaccinated.

- And by 19 July, 25 million people will be vaccinated.

- And by the end of the month of August, we will have hit our target, the European Union target, which we have also set here in Spain. And that is for 70% of the Spanish population, in other words 33 million fellow countrymen, to be immunised.

Hence, what is the government focusing on 101%? If you will allow me the expression, well, we are focusing on vaccination to ensure the recovery. That is what the Government of Spain is engaged in. We are well aware of the huge magnitude of this emergency, but also of the great transformations that exist in our country to resume the path of economic recovery, as quickly as possible and sustained over time without leaving anyone behind. Because, it is true, this economic recovery must also learn the great lesson we have taken away from the 2008 financial crisis, which is that you cannot have a sustained recovery over time without the backing of social and territorial cohesion. In barely 10 years, if we look back, Pedro J., ladies and gentlemen, in barely 10 years, the Spanish people have had to tackle three absolutely overwhelming intergenerational events.

- The first of these, the worst economic recession in the last 80 years.

- The second of these, the worst pandemic in the last 100 years of the history of Mankind.

- And the third, the worst climate emergency in the history of Mankind, for which there is no vaccine.

The pandemic has speeded up change with a huge disruptive potential. Here we have large corporations that have been talking and warning of this for a long time. Clearly, the climate emergency I mentioned is the greatest challenge we are facing from the point of view of the survival of Mankind, but also the digital transformation. And I would like to underline the pandemic because we must raise the focus and also look beyond our borders; it has speeded up the transition of global power from the Western world to Southeast Asia, with China as a superpower. And this poses some major challenges to our common project, to the European project in the post-Brexit era.

Both questions, if you will allow me, are absolutely related. The great Marshall Plan, if we can describe it as such, agreed on by Europe back in July 2020, like the creation of the Single Market, means the federalisation of Europe, something which, by the way, many of us present here have called for and demanded in recent years, above all, after the creation of the Single Currency.

The agreement reached back in July means the creation of a new fiscal instrument, the mutualisation of debt, so often called for. The mutualisation of debt for specific economic reconversion projects, such as the digital transformation and the ecological transition, which, complemented, as I said before, by the centralised acquisition of vaccines by the European Union, the development of the debate at this time in the European Council on strategic autonomy, without falling into protectionism and also the unprecedented response by the European Central Bank, together with the Unemployment Insurance Fund that is allowing the Temporary Lay-off Plans (Spanish acronym: ERTEs) to be financed at a European level, is the greatest European integration leap we have taken in decades. And we have done this in under 12 months, I repeat, in under 12 months.

Some people may say, dear Pedro J., that this would not have been possible if the United Kingdom had remained a member of the EU. This is a debate we will leave for academia and the political scientists. But what is true is that over these last 12 months we have taken a huge leap in the integration and federalisation process of the European Union. And I believe that this is great news, albeit against the backdrop of the calamity we are going through.

And in just a short time, we have also started work on strategic autonomy, but also on strengthening the coordination of all our policies tied into health and science. I am convinced that we will see, in the near future, much more progress, pushing aside and marginalising any nationalistic and localised whims that may emerge in Europe.

Just look, although what I am going to say may seem paradoxical, the truth is that Europe will come out of this crisis much stronger, which means that Spain will come out of this crisis much stronger. The Recovery Plan will be a success; this will be a case study for both Europe and for Spain, not just because of the economic resources committed, which are huge - 140 billion euros in six years - not just because we will continue to finalise the Economic and Monetary Union, but because at a political level, which I would also like to mention, this means Europe's recognition that it can jointly head up, together with other global powers, the huge transformations and transitions that will define competitiveness in the 21st Century, that is, the ecological transition and the digital transformation, giving them their own European focus, that is, a humanistic focus. In fact, the government has brought forward some of these aspects by - through public information and also thanks to the advice of scientific experts - pushing through what is a charter of digital rights, precisely to safeguard rights in the online world.

Hence, I want to say to you, as rigorously as possible, that I am absolutely optimistic as regards the future of Europe and of Spain. We have been subjected, as the editor-in-chief of El Español rightly said, to a terrible test, and we have deployed, in record time, an agenda of resistance and also an unprecedented transformation in both Europe and in Spain. In our country, we have deployed measures to resist, to make progress, to recover our economy without leaving anyone behind. In total, Spain has responded with measures that exceed 20% of the Gross Domestic Product of our country, in line with our large peer countries.

That is, 140 billion euros in publicly backed programmes, 40.8 billion euros in direct aid to pay salaries, National Insurance contributions, workers under an ERTE and the self-employed. In this case, harnessing the involvement of the trade unions and the business organisations - the social stakeholders, in short - and I want to once again acknowledge the efforts they have made to forge social agreements through social dialogue. Going back to the economic resources deployed over these long months of the pandemic, we have also transferred to the regional governments 26 billion euros to strengthen areas under the jurisdiction of the regional governments - our healthcare, our education, care for our elderly folk, and 4.8 billion euros in fiscal moratoriums. This has helped maintain the level of activity, protect the most vulnerable, which were priorities of the Government of Spain and of all institutions in both Spain and in Europe at all times. And thanks to this response, in coordination with a mew fiscal and monetary policy at an EU level, as I said before, we have protected Spain and avoided a potentially catastrophic situation for us at this time and to help push on in the future.

Together with that, the pandemic has also tested our institutional architecture at all levels in Europe, and we have stepped up our coordination work, as I said before, through the centralised acquisition of vaccines. What can a Länder or an autonomous region do, competing with countries with millions of people by trying to buy a vaccine alone? We are better together, united. And also through the European vaccination certificate, which Spain and some other countries headed up in the European Council debate and at a national level with the introduction of this term, with co-governance under the state of emergency, which is a constitutional instrument that has served to flatten the curve of contagion, and clearly also with the agreements with the social stakeholders that I just mentioned.

In short, and we are aware of this, the toughening of the health restrictions during the third wave that began at the start of this year has had an impact on the economic indicators in the first quarter, which is why the Government of Spain lowered the figures last week for economic growth in 2021 to 6.5% of GDP. Our economic policy has always been prudent. We are aware that the best fiscal policy is the vaccination plan and yet, together with the serious threats and difficulties that still persist, it is clear that there are also some positive elements that I feel are important to highlight.

This March, as economic activity has reactivated and consequently mobility restrictions have been lifted, the social security system has registered 70,790 more workers, while unemployment has fallen at the fastest rate since 2015, to stand below the barrier of 4 million workers once again, and the reactivation of workers under an ERTE has speeded up significantly.

Hence, the horizon is clear. After a strong contraction is 2020, Spain will be one of the developed countries to enjoy the most growth in 2021 and 2022. The growth forecasts are in line with the forecasts of such international bodies as the International Monetary Fund, which just this week revised GDP growth for 2021 up to 6.4%.

This would place us, together with the United States economy, as the Western economy to grow the most this year and next year growth is forecast of 4.7%, clearly higher than the Eurozone average and also of developed companies in general. The Bank of Spain also forecasts similar figures, with growth forecast for 2021 at around 6% in the central scenario.

What I want to say by this is that the protection measures have clearly served to resist. And now the time has come to move forward, to which end I would like to announce that at tomorrow's Council of Ministers we will analyse the Recovery, Transformation and Resilience Plan at the committee set up to that end, and the day after I will present the Plan to the Lower House of Parliament, following which the final approval of the Plan will be put before the Council of Ministers a few days later, prior to its submission to Brussels before the deadline on 30 April.

As I said, we not only want to recover our levels of growth from before the pandemic. We want to grow even stronger, be more competitive, create more jobs and enjoy growth that is sustainable on three levels: fiscal, social and environmental.

The huge shock we have suffered has shaken things up; it has clearly shown both the strengths and weaknesses of the Spanish economy, and hence, has speeded up the need to address transformations that have been delayed far too often in political debate.

If the challenge is extraordinary, the resources are also extraordinary that we will receive over the next six years. As you know, Spain will have the historic opportunity to receive 140 billion euros in transfers and loans from 2021 to 2026, along with the instruments planned under the Multiannual Financial Framework that are already starting to be implemented or soon will be.

And to manage these extraordinary funds, the Government of Spain has designed the Recovery, Transformation and Resilience Plan that we have been drawing up with the European Commission and that we will present, as I said before, in the next few days.

And due to its tremendous scope, I feel it is essential to underline and define this initiative as the most important in the history of our economy. To that end, I will appear in the Lower House, at my own request, on Wednesday, to set out in detail the broad strokes of the Plan to the political forces with parliamentary representation, because when the time comes to begin its implementation, the communication and knowledge of the Plan will be essential at all level of Spanish society: institutions, the main social and economic agents, business owners, researchers, entrepreneurs, and also the media, which is why I am very grateful to be able to hold this meeting to forge dialogue between the public and the private sector within the framework of this 'Wake up, Spain!', as previously referred to by the editor-in-chief of El Español.

The Plan, as you know, is structured at three levels: the first of these are the four horizontal transformation cornerstones that will pervade all the reforms, all the projects we set in motion. They are aligned with the establishment of the rules, the mechanism for recovery and resilience at a European level, which is the ecological transition, which we will allocate more than 30% of the resources to, the digital transformation, with a similar figure, social and territorial cohesion and gender equality.

Together with this cornerstone you have the second - the 10 driving policies established due to their great capacity to impact economic activity, and to job creation under the first phase of the Plan, which will determine the future evolution of the country.

The third cornerstone comprises the 30 components associated with the different driving policies that we will use to structure the projects under which the Plan will be developed.

We are talking about modernising our education system, for example, of taking a qualitative leap in vocational training, which will be one of the main tasks the Government of Spain commits to. We are talking about boosting sustainable mobility, and hence, undertaking a major transformation in a fundamental industry for our economy, which is the automotive sector. We are talking about reversing rural depopulation. The first few items we have set in motion in the Recovery Plan were done just a few weeks ago, when the Council of Ministers approved 600 million euros to be allocated precisely to the demographic challenge, including elements of items, to put it better, of investments related to everything to do with the demographic challenge and territorial cohesion.

We are also talking about conserving biodiversity, heading up the energy transition, modernising and digitalising our industrial fabric and also our SMEs.

We are also talking about transforming our job market through an unprecedented commitment to science and innovation, and to the care economy.

We must take away from this a tough and resounding lesson from what our elderly folk learned, above all, in our care home system, in attention for the care of the elderly, which is clearly expensive, inefficient and also highly vulnerable to pandemics, such as the one we are still suffering from in our country.

We are also talking about housing policy, about the construction sector, but also about the refurbishment and renewal of urban environments to make them much more sustainable and to boost the circular economy. We are talking about the competitiveness of our tourism industry. We must remain committed to the tourism industry in our country.

We are talking, as I said before, about modernising the automotive industry, but also about extending the network of infrastructures. We are talking about boosting industry, culture and also sport, sectors that suffered badly from the restrictions and the closure of cultural activity.

And the modernisation of our public authorities, something that business owners have been demanding for a long time, and also a self-analysis that must be made of the public authorities in terms of an ex ante and ex post analysis of public policies, in the awareness that in the future we will be faced with budgetary financial restrictions, and hence will have to be much more efficient and fairer in the performance of our public policies.

We are talking about updating our fiscal system. Let's look at what the United States, through Secretary of State Yellen, said to us a few days ago about the need to tackle a revision of the fiscal system at a global level. And we are also talking about the sustainability of our public pension system and the adaptation of our labour regulations to the reality of the job market in the post-Covid world. The Remote Working Act, for example, a pioneer among our peer countries, which I feel is a perfect example of what I am saying.

And also regarding this architecture of pillars, levers and components, I would like to announce to you that the Plan contains a total of 212 measures, of which 110 are investments and 102 are reforms.

Under the heading of investments, the volume of public investment mobilised for 2021 - 2023 will amount to 70 billion euros, with a very clear aim, which is to have an immediate impact on economic recovery in 2021, and also a knock-on effect on private investment in future strategic areas related to more disruptive innovation.

We want to set up companies, we want to create jobs, and we want our companies to grow in. And we also want these jobs to be better quality. To that end, I can announce to you that this investment will be focused on such important plans as the modernisation and competitiveness of the tourism sector, the 5G roadmap, the Strategic Vocational Training Plan and the Green Hydrogen roadmap, to name but a few.

Allow me also to quote some examples of investment under the Recovery Plan. 6,000 MW, as I said, of renewable energy will be auctioned off, 1.5 billion euros will be allocated to projects tied into hydrogen, energy, not for the future but for now; 1.3 million SMEs will be digitalised and 140,000 classrooms in our education system will also be digitalised.

150,000 rapid charging points will also be installed to boost this great transformation which the automotive sector is involved in, the acquisition of electric vehicles will be supported to achieve a fleet of at least 250,000 electric vehicles by the year 2023; we are implementing the MOVES Plan again for 2021, whereby electric vehicles and support for electric vehicles will clearly be the cornerstone of this Plan.

More than half a million houses will be refurbished; this is one of the main tasks pending as a country, and the Government of Spain is not only committed to these refurbishments, but is also planning innovative measures, tied into the financial sector and at a fiscal level, which I hope will incentivise home owners to consider refurbishing and renovating their homes at a more sustainable level.

65,000 places will be created for pre-school education for children up to 3 year olds, which I feel is one of the main tasks pending for our education system, and broadband and 5G will be taken to the four corners of Spain.

And, as regards the reforms, I would also like to say that I should begin by stating that we are not starting from scratch because the Plan is a continuation of a strategic agenda that began almost three years ago. Last week, for example, the new Climate Change Act passed through the Lower House of Parliament, from the Paper of the Environmental Committee, a law that will now be taken to the Upper House and we hope that can be definitively approved at the end of this month. But I also wanted to say that the European mechanism is a unique opportunity to undertake crucial reforms in key areas, as I said before, the Climate Change Act, the transformation of our energy model, the modernisation and digitalisation of the public authorities, the reform of our justice system, which the Government of Spain is already working on, improving the business climate and administrative simplification, where there are two important laws, one tied to the size of companies and also to improving the functioning of our market at a State level, and why not say it, a new Start-up Act, which the Government of Spain has been working on for months, strengthening our science and research system - just a few days ago, the Council of Ministers had the first reading of the Draft Bill of the Science Act - hence, there are many things we are developing, that are already underway and which, let's say, will shortly see the light in their publication in the Official State Gazette, and also the transformation of our dependency and social services system.

In short, what I want to say by this is that we have made a decisive commitment to the improvements and transformation of public policies, on which matter I wish to refer to and underline something that I mentioned earlier, which is the necessary evaluation of public policies, better education and training in all areas. And I would also like to stress to you that we need to modernise our employment legislation to achieve a more dynamic job market, which must be more resistant and inclusive, and address all the dilemmas of digitalisation and the structural problems that we have been carrying with us for many years. I believe that the ERTEs, the simplification of contracts, the renovation and modernisation of active employment policies are fundamental elements for the new job market in the post-Covid era.

In total, as I said, more than 100 reforms which are going to change our country, which I am convinced are going to change it for the better and which are going to lead to a leap in modernisation and transformation in the next decade.

The effect of these investments and improvements in economic growth is estimated, according to the Government of Spain's economic services, at 2 percentage points a year as from 2021. It is also estimated that 800,000 jobs will be created over the period of execution, and the structure of the country will be improved by settling people throughout the country. Furthermore, its impact on the growth potential is placed at over 2% of GDP as from the year 2030.

And we should not forget something very important, which is the major positive consequences that this Plan will have on equality, and on social and territorial cohesion.

In Particular, the Plan seeks to offset the impact of the pandemic on the two groups worst affected by a crisis once more, as they were in the financial crisis: firstly, women, and hence we need to prioritise closing the gender gap, something that not only the Government of Spain anticipated in its drafting right from the outset, identifying gender equality as one of the cross-cutting cornerstones that explain the horizon of investments and reforms I mentioned before, but also the European Parliament and the European Council, which told governments that gender equality had to be one of the fundamental pillars behind the transformations and investments of Member States.

And also, logically, together with the gender gap, increase the personal and professional opportunities of our young people. It is not right for our country to have the level of youth unemployment that we have, that we are suffering from at this time, because this is logically a tremendous risk to our potential for economic growth, for job creation and for the incorporation of companies in our country, along with the political consequences.

Hence, I believe that reducing inequality in terms of income by two thirds of the distance that separates us from the European average must also be one of the aims of this Plan.

And on this point, I would also like to say to you that we are working on both education and vocational training, at least that is how the Government of Spain interprets this. The measures on education and training represent a key element of the Plan, logically aimed at reducing unemployment and at raising the level of productivity, which is one of the main pending tasks for our economy.

Overall, the Recovery Plan will allocate some 9.3 billion euros to the modernisation and digitalisation of the education system, and also to the reform of our university system, along with the modernisation and renovation of active employment policies, and to boosting vocational training and the accreditation of professionals skills for a good part of our labour force that do not have any qualifications at present to accredit the professional capacities that they perform in the job market.

These investments and reforms are absolutely key to improving productivity, and hence wages, to transform our productive model and reduce, as I said before, our high youth unemployment figures.

And they will also have a very important impact on social cohesion. The actions aimed at promoting digital inclusion, with a special focus, as I said before, on closing the gender gap and on boosting the digital training of vulnerable groups and in areas in demographic decline, the provision of portable devices and connectivity for underprivileged pupils, the modernisation of vocational training, the creation of places in the first cycle of pre-school education, prioritising access to students in areas at the greatest risk of poverty, will all be essential if we want to develop equal opportunities and the access to quality jobs by broad sections of the Spanish population.

As I said before, employment is the priority for everyone. For business owners, institutions, public powers and entrepreneurs, because employment is the result of economic growth, and hence is the key to generating greater growth, in turn. It is also the priority for our men and women, because they are looking for a present and a future through a sustainable life project. And of course, obviously for the Government of Spain, because jobs guarantee prosperity.

We are up and running. This is true because the emergency and the speed of these changes we are undergoing have forced us not to waste a moment of time. We are because this is an irreversible process at a global level, in which leadership is forged through our ability to anticipate these hugely disruptive changes for our societies. And this is true because our country deserves take advantage of this historic opportunity.

Over the course of recent weeks, the Government of Spain, as you know, has undertaken a far-reaching administrative reform, one that I would call structural, to eliminate many bottlenecks, many hurdles, that will allow the oversight and control that correspond to a social and democratic state under the rule of law to be guaranteed, as in Spain, but also the oversight and controls set by the European Commission - the efficient and rigorous management of public resources, with full respect for European guidelines and the principles of transparency and accountability that I mentioned before.

And it is not just a case of a project by the Government of Spain, as the editor-in-chief of El Español rightly mentioned before, but of a country project, by Spain and for Spain, which demands the utmost involvement of economic agents, social stakeholders, public institutions and the utmost public-private collaboration, which must be speedy and excellent. This requires entrepreneurship, commitment and innovation by the whole of society, even including the designing of tools and instruments to set this in motion. The clearest example is the announcement we made some weeks ago of a PERTE in the automotive sector, which is a fitting example of how the Government of Spain conceives this public-private collaboration as driving projects for the transformation of sectors that are so important for GDP and hence for the economic growth of our country.

Anyway, we have four days to debate, agree, propose and, above all, open our eyes to the reality of the present and inspire our vision of the future.

Let's do this through unity, because we are all united by a common desire to modernise and transform our country, to make it a global leader in terms of progress and well-being. We can do this. And we are going to do this. I have no doubt about this, because Spain has always been able to and it will be able to now. And as I said before, this will be the story of a great collective success for Europe and for Spain because we have the capacity, we have the vision of the things that we need to do, we have the will and the necessary resources to achieve this.

So we are going to make this a reality. I don't want to end without once again thanking the community here at El Español, those who are present here, those who are following us by streaming, and also clearly the editor-in-chief and his whole team for the tremendous opportunity offered by holding this hugely important symposium.

Thank you very much for your attention and presence here.

(Transcript edited by the State Secretariat for Communication)

Non official translation