Speech by the President of the Government of Spain, Pedro Sánchez, at the event "Latin America, The United Satates and Spain in the Global Economy Forum", organised by the Spain-U.S. Chamber of Commerce

SPEECH BY THE PRESIDENT OF THE GOVERNMENT OF SPAIN, PEDRO SÁNCHEZ

Good morning.

I would like to begin by saying that it is, of course, an honour for me to participate once again in this gathering, which has become a regular fixture during United Nations week.

And I would therefore like to thank the Chamber of Commerce for making it possible and also for symbolically bringing together two countries that share so many ties. And especially in a year like this, on an anniversary, the 250th anniversary of the founding of the United States and its independence. Ties based not only on economic grounds, obviously, but also on cultural, historical and, of course, emotional bonds.

I want to start by asking you to perform a simple exercise.

Imagine that, in 2022, Russia's invasion of Ukraine had not taken place. Imagine a world without the succession of conflicts that we have unfortunately experienced in recent years in the Middle East.

Imagine, just for a moment, where we would be today. Imagine if the prediction made by some as we emerged from the pandemic - proclaiming, incidentally, that we were on the threshold of a new "Roaring Twenties" - had actually come true.

This prediction could indeed have come true.

But, regrettably, that was not the case. And I believe the primary cause has a name: war.

Wars are, evidently, human and political decisions. They are not mere strokes of adversity, such as a natural disaster resulting from the climate emergency we face, or, logically, a pandemic.

And in an interdependent global economy, their consequences are not limited to the battlefield.

They cross straits, oceans, ultimately impacting every corner of the planet. I believe that today everyone, every ordinary citizen, is keenly aware that geopolitics affects their daily lives.

And certainly, it affects citizens' pockets, particularly those of the most vulnerable.

Last week, for instance - just to give you a figure - Spanish citizens paid an average of 1.83 euros per litre of diesel. 1.83 last week. That is 41 cents more than just seven months ago, before the start of the war in Ukraine. In Germany, it is 70 cents more. In France, 64 cents more and in Italy, 49 cents more.

In all these countries, the price exceeds two euros per litre. Even here in the United States - a country rich in reserves - the price per gallon has been breaking all-time records for two weeks now.

For a few, war is obviously a business and it is a geopolitical game. But for those suffering its consequences, not only the humanitarian ones, which would be bad enough on their own, but also the economic ones, it is a genuine personal crisis.

I believe that is the difference between making enough margin to keep a business afloat and having to shut down for good. Or between facing the start of the school year - a time when all families in our country are busy preparing - without financial strain, and struggling to make ends meet. And I believe that this is the real problem, the true face of inflation and what we are facing again after the energy shock resulting from Putin's war in Ukraine.

Obviously we are well aware that rising prices are one of the first concerns of our citizens. In Spain, in Europe and in the United States as well.

In recent days, I have had the opportunity to speak with political representatives from various parties, and indeed, the cost of living is a major topic of debate here in the United States, too.

Inflation, in a way, represents a sense of exasperation. It represents deep uncertainty about one's livelihood. It is, frankly, frustrating to find that one's salary simply does not go far enough. It erodes wages. It erodes trust. And, ultimately, it has the power to pave the way for reactionary rhetoric that clearly undermines trust in our institutions. Moreover, I believe history offers excellent examples of this.

That is why I believe it is essential to have both the capacity and the will to respond effectively to every crisis. And in recent years, unfortunately, we have had to deal with many of them, starting, naturally, with the COVID-19 pandemic.

And I honestly believe that in each and every one of them, acting from our position as the Government of Spain, we have followed the same roadmap based on two pillars. The first is protecting our companies - and, naturally, our workers - as well as our country's households and industries through emergency measures. And secondly, aligning those measures with a long-term strategy - thereby turning adversity into a stimulus, if I may use the example, to continue transforming our economy, as the ambassador rightly noted in his introduction, through the green transition and digital transformation.

And the data speaks for itself.

The Spanish economy is facing this final quarter of the year - a turbulent and complex time internationally, with significant impacts on both our own economy and that of Europe - with a year-on-year growth rate of 2.7%, maintaining a positive gap compared to the rest of Europe. We have just received the latest forecasts from Standard & Poor's for the Spanish economy, projecting growth of 2.4% by year-end - three times the Eurozone average.

This is also driven by job creation, which is showing impressive resilience; we have reached 22.8 million people in employment, with an unemployment rate below 10%.

Furthermore, thanks to the labour reform agreed upon with social partners, we have brought the rate of temporary employment down to historic lows - aligning with the European average - while exports now account for no less than 36% of our Gross Domestic Product. Consequently, they are regaining their momentum within what I previously described as an extremely complex international context.

And all this, as I say, has been achieved despite the succession of crises we have had to face - and in a landscape where no other European country has managed to see real household disposable income, that is, income adjusted for inflation, grow the way it has in our country.

Therefore, we are not merely growing. We are doing so, I believe, in a positive, balanced, healthy way, and, therefore, redistributing that growth. This is something that, incidentally, did not occur in previous periods of economic expansion but is happening now.

Furthermore, we are doing this by prioritising resilience and creating greater room for manoeuver to face any adversity - something that is unfortunately necessary in such an uncertain climate.

While there are many examples we could discuss, energy stands out as the clearest illustration of the point I am making.

Today, we are approaching 60% electricity generation from renewable sources; this clearly makes us far more autonomous - and thus more resilient - in the face of external energy shocks.

And secondly, it makes us more competitive than we were in 2018, as well as more competitive relative to our main European rivals.

Based on data from the second half of last year, the final price of electricity for our companies was 23% lower than the European average, 31% lower than in Germany, and 40% lower than in Italy.

There are many successful business leaders here today. No one understands better than you the implications - when deciding, for instance, where to locate an industrial plant - of whether the cost of energy, and electricity, is competitive.

That is why I believe what we are achieving is so important: transforming a historic weakness of the Spanish economy - specifically, the cost of energy for small, medium and large enterprises alike - into a genuine strategic strength relative to the rest of the European Union, to attract wealth, to attract investment and also opportunities - specifically to regions that missed out on previous waves of reindustrialisation.

I am thinking, for example, of inland Spain, of regions like Extremadura, Castile and León and Castile-La Mancha. In Andalusia, where I recently had the opportunity, together with the Second Vice-President for Energy Transformation and Ecological Transition, to present this important Green Hydrogen Valley, one of the largest industrial projects, not only in Spain, but also in Europe.

That is why, in just one year - last year - we ranked third in the world, I repeat: third in the world, for announced greenfield renewable energy projects, with a total value exceeding 4.5 billion euros.

Furthermore, I believe that this very advantage - abundant, competitive, clean energy - serves as the gateway to the next great opportunity before us: the drive for artificial intelligence and, consequently, digital transformation.

We have the connectivity, we have the talent, we have competitive renewable energies. I think we honestly have a thriving ecosystem, the second-fastest-growing entrepreneurial ecosystem in the European Union over the last five years in the field of artificial intelligence.

We also have the commitment of the public sector and government authorities, evidenced by major investments such as the construction of one of Europe's large gigafactories right here in Spain.

Therefore, we naturally roll out the red carpet for anyone wishing to invest, for instance, in data centres. But we welcome those who want to invest and do it right. We welcome investment in data centres that create quality jobs, foster technological sovereignty, generate employment and knowledge, support local suppliers, and, above all, do not compromise the electricity supply or vital resources like water - which, unfortunately, are becoming increasingly scarce in our country. We want investments that allow data centres to operate in line with the environmental sustainability standards the Government of Spain has always championed. I believe that is the difference between rolling out the red carpet and showing a red card.

The key is to anticipate developments so we can regulate with sound judgment and strategic vision - something I believe the Government of Spain is doing.

To me, the intense debate currently taking place regarding artificial intelligence demonstrates that a single actor is not enough to bring order to the prevailing chaos.

This past Monday, at the Moncloa Palace, I presented the Artificial Intelligence Plan, aimed at ensuring the technology's responsible development. And one of the panellists noted that what is currently happening in the field of artificial intelligence is not merely a race, but a stampede. This is concerning, given the implications of the technology.

Therefore, the public sector, public authorities and democracies must clearly open up a major debate - both nationally and regionally - just as we did during Spain's Presidency of the European Union with the first regulation, the first Directive, on artificial intelligence. And, naturally, we must do the same at the multilateral level.

It is clear, however, that in a world too often resembling a Risk game board, open economies require reliable rules, predictable partners and long-term cooperation.

Hence the need for more dialogue, more collaboration and, of course, more multilateralism.

We must never forget the lessons of the pandemic; we face global challenges that can only be met through a common, shared perspective.

And I believe this logic underpins our relationship with the United States, as well as our ties with our sister nations in Latin America and the Caribbean. We will, of course, welcome the Ibero-American community with open arms at the Ibero-American Summit to be held in Madrid this coming November.

Obviously, the Spanish economy cannot be understood without the United States, the largest investor in our country, the main destination for our exports outside the European Union.

Nor can it be understood without Latin America and the Caribbean, for whom Spain serves as a gateway. Many large Latin American companies find in Spain a gateway to the vast European market. And conversely, the Ibero-American community is, logically, the gateway for Spanish and many other European companies alike.

Our vocation is European, it is Ibero-American, it is transatlantic. We do not choose between these spheres. I believe the intelligent course of action - especially in this increasingly fragmented world - is to do the exact opposite. We must connect with one another.

And so, let there be no doubt: the bond uniting Spain and the United States is solid. It is more solid than the steel that holds up the Brooklyn Bridge. This bond transcends any passing circumstance or any differences regarding the actions of one government or another. For what unites us is clearly far greater than what divides us.

We are not merely business partners. I believe that we are essential partners.

And we are not merely strategic allies. I believe we are fellow travellers on a shared journey.

We're not merely friends. I believe we are family.

And that is the message that I would certainly like to convey to all of you this morning.

That is all, thank you very much.

(Transcript edited by the State Secretariat for Communication)