Speech by the President of the Government of Spain at the 'European Funds: towards strategic autonomy' forum, organised by elDiario.es

El Beatriz Auditorium, Madrid

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

Good morning and thank you very much to the ministers who are with me. To the president of elDiario.es, José Sanclemente, and of course also to the deputy director of elDiario.es Neus Tomàs, to all the journalists of this group of professionals who make up elDiario.es and to the other authorities, ladies and gentlemen, sponsors too, who it is important to remember as the director Neus has done.

First of all, as I have done every year that I have participated, I would like to thank elDiario.es for organising this forum, which is also an important forum from the point of view of education and reflection on this great transformation that has been underway since 2020, when the European funds were launched, at least conceptually. It is therefore a pleasure for me to be here for another year.

I know that many of you are expecting me to talk today about a host of macroeconomic data illustrating how well the Spanish economy is doing.

Just today we have once again had a magnificent figure, a seven-tenths of a percentage point drop in the evolution of prices in our country. I believe that this, if it also shows something about underlying inflation, is a clear success of the Government of Spain's economic policy and, from the energy point of view, of its energy policy.

I could also cite the latest economic growth forecasts for 2025 by the OECD, released last week, which once again place our country at the head of the main advanced economies in terms of economic forecasts. And I believe that this too, in a context as uncertain as the one we are living in, takes on greater value.

Or I could refer for another year to this record in the tourism sector, which is so important for the good progress of our economy. We are talking about 94 million visits or exports of goods that are at a record high of close to 400 billion euros, in a context of a tariff war, as we have unfortunately seen in recent days from the US administration.

Or, most importantly, the labour market, with 21.5 million men and women national insurance contributors in the Social Security, a figure we have never seen before in our history.

Or I could simply reproduce the praise that, from the more objective point of view that perspective provides, the international media recognise Spain as an advanced economy and its performance in these uncertain years.

In any case, today I would like to focus not so much on the big figures, but on how we are managing to translate Spain's extraordinary economic performance into the daily reality of the people, of ordinary people.

An achievement that owes much to the decisive contribution, as I was discussing earlier with some of the sponsors of the recovery, transformation and resilience funds.

And we are achieving this, as I said before, in the midst of a not very easy scenario over the last few years. I think we have suffered from almost everything. Like all developed economies. We have suffered a particularly severe inflationary spiral, we have had to face a pandemic which, although not overcome, should remind us of the seriousness of the situation. The response that was given, unprecedented on the part of Europe and the member states, and now that we are seeing how there are great powers that are withdrawing development aid and the impact that it can have on certain diseases in continents, such as the African continent, I believe that we must always remember the importance of public health and of international cooperation and solidarity.

In any case, in such a context, what we are achieving certainly has even more merit. We have shown that it is possible to grow and redistribute with an economic policy that puts people at the centre, ensuring that the wealth created also reaches the middle and working classes.

We have done this by increasing the minimum wage by 61% in the last six years; we have also increased the average wage of working men and women in our country; we have created the minimum basic income, which already benefits more than two million people, especially by designing this minimum basic income to combat child poverty, which continues to be one of the main obstacles, one of the Achilles' heels, to be more precise, of inequality in Spain; and we have achieved a labour reform that has reduced the rate of temporary employment to figures not seen since 1987.

And all this, moreover, with a rigorous, serious and responsible fiscal policy.

I believe that the data shared yesterday by the First Vice-President of the Government of Spain and Minister for Treasury is very eloquent of how it is possible to boost economic growth and job creation figures and redistribution of wealth through public and therefore social policies, but at the same time we can close the public deficit and balance the figures.

We end 2024 with a reduction in the public deficit of seven tenths of a percentage point compared to 2023. We are therefore talking about figures that are below 3%, namely 2.8%. They rise above 2.8% and therefore above 3% as a consequence of the impact of the DANA. It is curious that 93% of the total investment and expenditure of the DANA in Valencia corresponds to the Government of Spain, I repeat, 93%.

In any case, going back to the public deficit figures, we are talking about the best figure since 2018. And then came the pandemics and then came the wars and then came the inflationary drifts. Also the energy crisis. But we are back to figures very similar to those we had in 2018. And once again, because it is a substantial improvement on our forecasts and on our commitments to the European Union.

Moreover, we are continuing to reduce public debt, which is already 22.5 points below the peak we reached in the pandemic, already very close to 100% of Gross Domestic Product.

In other words, not only are we meeting the targets set with Brussels, allowing us to exit, as I imagine the Vice-President will have said, from the excessive deficit protocol, but we are also doing so with a certain degree of ease, projecting solidity, confidence to the outside world and also fiscal capacity and margin to tackle some of the challenges that lie ahead.

I believe that we are demonstrating that it is possible to strengthen social cohesion and territorial cohesion, while also managing public accounts rigorously and efficiently.

This is the path that has led us to achieve other milestones that directly affect the household economy. To give you an idea, according to the OECD, Spain is the only large economy in the European Union, I repeat, the only large economy in the European Union where real wages are above pre-pandemic levels. And I think that, if it means anything, it means that households are gaining purchasing power, especially lower incomes, which suffer most from inflation and, moreover, according to the Bank of Spain, household wealth is at an all-time high.

I will add some nuances to this statement later, but I would like to say and emphasise that macro and micro go hand in hand in our country today, thanks to the efforts of our workers, of businesses, of the self-employed, of the social economy, of course, first and foremost. But, also, because there is a government that since 2018 we have prioritised a more people-centred economic policy over any spreadsheet.

Obviously, I am aware, we in the Government are fully aware that there is still a lot to do to bring the fruits of growth to households.

And the questions could be: What good is it, for example, looking at the Minister for Agriculture, Fisheries and Food, that olive oil has fallen by 32% in the last year, as it has, if many citizens still have to choose between buying olive oil for their children's dinner or taking them to the cinema? Or that the housing law is working where it is applied, for example, in the data we have recently seen from Catalonia, when many families' salaries have gone by the 5th of every month, because they have to either pay rent or the mortgage.

And to all of them I say that this is certainly not enough for the Government either.

As long as there is a single pensioner who has to ask their family for help in order to be well looked after, as long as there is a single worker who has to ask their parents for help because their salary is not enough, there will be a lot of work ahead, a lot of work.

And in the face of those who opt for the invisible hand or, in a much less sophisticated way, for the chainsaw of the market, the Government, my government, is clear: There is no better recipe than to act decisively, with solidarity, with the visible hand of a good economic policy that must also be designed by the public authorities.

And this conviction has led us to deploy the largest fiscal stimulus in our history and, therefore, a completely different response to that given by the neoliberals during the financial crisis to protect the incomes of citizens, of companies, from the onslaught of the pandemic. And I believe that this has also been a great lesson, because we have evidently recovered the levels of GDP prior to the pandemic in less time than was the case during the financial crisis and the neoliberal response, and it is thanks to the solidarity of our European neighbours, I am referring to the NEXT funds in this case, that we have been able to tackle the biggest transformation of our productive fabric in decades.

And so today I would like to talk to you with concrete examples of how the Recovery, Transformation and Resilience Plan is driving that transformation.

But first, let me remind you of a few facts, or rather a maxim that seems sometimes in the published conversation to be forgotten. Without reforms there are no funds, without reforms there are no funds. And Spain is delivering. We are the country that has met the most milestones and the most transfer targets, and as a result we have already received almost 48 billion euros in transfers, more than any other EU Member State. This is only a part of this 80 billion of non-repayable funds which, together with the loans we are entitled to, amounts to the equivalent of 10% of our country's Gross Domestic Product.

Therefore, the idea I want to convey to you is that without reforms there are no funds. In other words, without advances in green taxation, without policies to conserve the coastline and, for example, water resources, without the promotion of sustainable mobility, without the roll out of renewable energies, without the promotion of the ecological transformation of agriculture and fishing, Spain would have missed the best opportunity we have had to modernise our country. Without vision and commitment to the transformation we want, both ecological and digital, we would not have the resources we have today to make the digital and green reindustrialisation we want for our country and for our continent a reality. It is worth bearing this in mind at a time when some people are denying the European Green Deal and are doing so out of pure opportunism or ideology.

And I would like to remind those regional governments that they have managed a third of the amounts launched so far in the different calls for proposals. One out of every three euros has been managed by the autonomous communities and I believe that this is an example of co-governance, of institutional loyalty which, furthermore, strengthens our territorial cohesion and the autonomous state. But this, of course, also requires mutual loyalty. Because the conditionality of these funds to these reforms aimed, for example, at the European Green Deal, binds us all, and particularly the General State Administration, which is the one that has to answer to Brussels. And, therefore, we will not allow anyone's ideological fickleness, anyone's denialism, to jeopardise the arrival of NextGenerationEU funds in our country.

We will not allow any government controlled directly or indirectly by the denialist far right to put at risk a single euro of European funds, which in the end have a positive impact on the territories, both from a business, social and employment point of view. Because it is tantamount to denying future opportunities for thousands of companies in these territories and, therefore, in our country.

Just one fact. The Bank of Spain points out that almost half of the companies would not have invested without the driving force of NextGenerationEU funds. And many of them are small and medium-sized companies. They are self-employed people. It is a social economy and accounts for more than 40% of the aid granted from these Next funds. And without the additional muscle of the recovery plan, they would not have taken that decisive step that is allowing them to grow, open up to the world and export.

Therefore, what I want to say with this is that Spain is moving forwards in a very complex, very difficult context, which you are also witnesses to and probably victims of these tariff wars. This time, however, we are not making progress with a big buck as in the past, but with balanced growth, with inclusive growth and with sustainable growth. I believe that the impact of the Next funds has been decisive in this process.

It is being decisive in three respects that I would like to share with all of you. The first. According to data from the Ministry of Economy and Trade, the NEXT funds have contributed to a 2.6% increase in our Gross Domestic Product until 2024, namely until December 2024.

In other words, our GDP increased 2.6% more by December 2024 thanks to European funds.

Secondly, because they help us to reduce what we were all watching during the financial crisis and that is the risk premium.

And, thirdly, this is a piece of information that really caught my attention when it was shared by the European Central Bank. The NEXT funds have enabled us to reduce public debt in our country by 7.8 points.

Therefore, we are talking about very positive macro figures and an impact that is having on our public accounts, on economic growth, on reindustrialisation and the transformation of our productive fabric that I believe is formidable, unprecedented in the democratic history of our country.

These are the scales that I believe make the difference between having or not having the additional impetus of this recovery plan. Also between fighting the battle or giving up, because the easiest thing to do during the pandemic would have been to give up and wait for others to do or propose. Between keeping quiet and sitting back or making the voice of our country, of Spain, heard loud and clear at such a decisive moment for the European Union.

In any case, thanks to this, by combining our efforts, we are transforming the Spanish economy along two main lines, which I believe to be the guiding principles. No matter how much noise there is and no matter how much anti-digital discourse there is in the humanist perspective of this digital transformation, or anti, or rather, climate change deniers, I believe that these two major axes, the energy transition and the digital transformation, are the present and future vectors of Spanish, European and also global economic competitiveness.

But as I said at the beginning, to appreciate the full scale of this change, I think we have to go the short distance. That is why I would like to outline, through five concrete examples, the formidable impact that European funds have had or are having in our country. The first one I would like to highlight is innovation in sectors such as artificial intelligence. It is often said that artificial intelligence is almost foreign to Europe, and therefore also to Spain. There is some truth in this.

But it is also true that thousands of Spanish companies are already working on artificial intelligence. And I would like to highlight a Basque startup, Multiverse Computing, which has achieved something incredible, namely a language model understanding software that reduces energy consumption by up to 80%. This was also thanks to the 18.5 million euros of the recovery plan, a co-investment of 67 million euros financed by European funds.

The second example I would like to share is linked to health technology. I remember in 2022 I visited a boy, Jorge, a teenager with a rare disease, specifically GNB1, the day before he was to be operated on. It was his birthday the day I had the opportunity to meet him. And that day he received the best possible gift, a paediatric exoskeleton manufactured by a company from Madrid, MARSI Bionics, which is a spin-off of the CSIC. Thanks to 2.2 million euros from the cutting-edge health programme PERTE and the work of 75 researchers, MARSI has developed the first paediatric exoskeleton in the world, and it is 100% Spanish. I think this is an extraordinary innovation because it grows and adapts to children from 2 to 17 years of age, imitating the natural functioning of the muscle. And I think it has such a transcendental impact on the lives of people who really need the contribution of innovation and science, that I am proud to see that what was then a project with many uncertainties has been consolidated.

The third example is linked to sustainable urban planning. You know that we have a very old housing stock, very old, and that when we talk about housing we often forget the most important part, which is rehabilitation and urban renewal. I would like to highlight the rehabilitation of a hundred houses in the San Antonio colony, in the municipality of La Vall d'Uixó, in Castellón. This is a neighbourhood of working people, of ordinary people, with a medium-low income, built more than half a century ago and which is going to benefit from an injection of 2.5 million euros of European funds. Who lives in this neighbourhood? Well, there are many elderly people living alone, as is the case in many of our cities' old quarters, and almost a quarter of the dwellings are empty. This plan includes mobility improvements, the installation of lifts, the design of streets, pavements, also for people with mobility difficulties, and of course, something very important, greater energy efficiency through aerothermal energy, which will allow families to save €400 per year.

I believe that this also gives an image of how we are uniting not only social cohesion, but also the economy of a sector that unfortunately suffered greatly during the financial crisis due to the bursting of the real estate bubble and that is now once again gaining considerable traction and is so important for employment and the economic development of our territories, such as the construction sector.

The fourth example is related to the energy transition, which you know this government is very committed to. I was also very pleased to hear that the First Vice-President of the Commission is going to participate in this forum. The Secretary of State, Hugo Morán, who is also one of the main exponents of this energy transformation that we are carrying out, is here. A key lever that I believe is proving very important not only for the competitiveness of our economy, but also for economic security and to which Spain is devoting, as you know, 40% of the investments in this recovery plan.

The results are there, they speak for themselves. Today, energy prices are no longer a chronic weakness that hamper our competitiveness, but a competitive advantage for our industry. There is still a lot to do because we do indeed need to continue to become more competitive. But, well, I would like to remind you that the wholesale price of electricity in Spain is half that of Italy and 40% lower than in Germany. This also has a lot to do with the boost we have given to green energy. One of the central elements, what is it? It is the commitment, as you know, to the development of renewable hydrogen, which is also showing a great deal of appetite by foreign investors - today we have also heard some information about sovereign investment funds that are once again backing these green hydrogen projects in our country. In 2024 alone, to give you an idea, we are tripling the objectives of a roadmap, the green hydrogen roadmap, which is being rolled out throughout the territory and particularly in areas where reindustrialisation was an impossible dream and which today are synonymous with quality employment and new opportunities. And I am thinking of Andalusia, of Extremadura, in short, of places where the industrial revolution of fossil fuels has effectively passed us by.

A good example of this is the work of the company NORDEX, which focuses on the design, manufacture and assembly of modular electrolysers that will enable production to be scaled up to use green hydrogen in different sectors, such as steel production and fertiliser production.

The last example - which is related to something that formed part of the conversation at these elDiario.es conferences - is strategic autonomy, open strategic autonomy, because we do indeed have to reindustrialise, we have to take note of what is happening and the discourses that we are seeing in other parts of the world. We need to wake up from the European point of view and we need to reindustrialise, to focus on technology and green energies. In any case it has to be open because we have to look for new allied trading partners now that others want to close the doors on us with tariffs.

This week the European Commission published the first list of European strategic projects linked to critical raw materials. In total, there are 46 projects throughout Europe, of which, and this is what I would like to highlight, seven are located in Spain. We are talking about 15% of the total. Seven projects spread across our country, to extract and produce some of the most necessary minerals if we want to be able to lead or continue to lead the green transition and, of course, the digital transformation. We are talking about lithium, copper, nickel, in short, minerals that are very important for the strategic autonomy of our continent.

In short, I believe that, all in all, what I want to say is that we are prepared, that Spain is doing its homework, it has undoubtedly done its homework. As I said before, without reforms there are no funds, and if we are the first country to receive these transfers and these disbursements, it is because we are making the reforms.

These are reforms, by the way, that were included in the country recommendations systematically made by the European Commission and that the Government of Spain, with parliamentary fragmentation, with a coalition government in a parliamentary minority, has managed to move forwards - by the way - with social peace, and I believe that this is also proof of the current Government's capacity for negotiation and agreement.

Spain has therefore done its homework. I believe that this allows us to look to the future with a certain confidence, despite, I insist, the difficulties of an international context which, if it forces us to do anything, it is to row harder. In a few days' time, the highest tariffs ever imposed by the United States on the European Union are expected to come into force. And today, from here, I would like to call once again on the US Administration to come to its senses, to enter into dialogue with the European Commission and to stop this nonsense. And today I am also being clear again. If tariffs are imposed on us, then we must respond decisively, and Europe will fight back. We will act swiftly, proportionately and with unity. I believe that these are the three criteria for the response that we will give from the European point of view.

Speed because the Government will be on the side of our farmers, our businesses and, ultimately, our people. From the first announcements, or at least the first threats, we have been preparing and developing a National Contingency Plan to help the most affected sectors. Secondly, with proportionality, because we believe that a trade war obviously benefits no one, it harms everyone, especially the weakest. And with unity, because we will respond in coordination with our European partners. Let us never forget that Europe is the world's leading trading bloc and therefore we are a trading power; and as a trading power we can respond to this nonsense that is being put forward, in this case, by the US Administration.

In any case, ladies and gentlemen, we are well aware of where withdrawal and autarky lead. That is why we, and this is what I was saying before when I spoke of open strategic autonomy, because we decided to be a European project, an open and therefore prosperous political project, and not a closed and poor one. Where others seek confrontation, we will continue to reach out for dialogue; where others generate uncertainty with the threats and announcements they are making, we bring certainty; and where some build walls, we forge new alliances.

And I think that Spain has had a lot to do with this diversification of alliances with Mexico, with Chile... well, now we are moving towards a trade agreement with India, the renewal of the existing one with Canada... In a few days, as you know, I will be travelling to China - this year marks the 20th anniversary of the Spain-China Strategic Partnership - and I will also be travelling to Vietnam, two strategic partners in Asia in order to establish new economic links, and I will also, of course, be holding a new round of contacts with our partners in Latin America and the Caribbean to try to underpin the European Union-Mercosur agreement, which seems to me to be much more important than ever.

We have never been so open to the world, but we are very clear that we must develop our own capacities. The open strategic autonomy that we defend for Spain and for Europe is the only way to preserve our model, which is a democratic model, one of respect for human rights and freedoms, and also, logically, one that incorporates and is an active part of the great debates facing humanity, such as climate change or the technological revolution and the implications it may have on the world of work and the economic and social spheres.

That is why - I conclude - by saying once again that Spain is moving forwards in spite of everything and against everything. It is doing so by growing, as Europe is doing, inwards, and it is also doing so by growing outwards, by opening up, by contributing as never before from the European Union's control panel.

And the data is there. The figures are, I believe, very resounding and I believe that they should also convey a sense of pride in the country, because this success is not due to a government, but to Spanish society as a whole, the fact that Spain today contributes 50% of eurozone growth. Can it be said that Europe needs to do a lot of homework for competitiveness and to improve its economic growth? There is no doubt about it, but the fact that Spain is at the forefront and that it represents 50% of the growth of the eurozone is an absolutely impressive, formidable figure, considering that we represent 10% of the Gross Domestic Product.

That we are a great European economy. And, by the way, the one that has gained the most productivity per hour since 2019, the one that creates the most jobs in the whole of the European Union, one in three new jobs, and we have managed to reduce inequality to the lowest in the historical series. I insist, we still have serious problems of inequality, especially in housing and child poverty, but we have a government committed to this cause, to the fight against inequality.

And we are reaching these milestones as we move towards a new productive model that guarantees social and territorial cohesion, with quality employment, with a clear commitment to training and investment in R&D as the foundations of our present and future prosperity.

Well, I think these are Spain's credentials, and they are recognised outside Spain. The Recovery, Transformation and Resilience Plan contributes decisively to this. I believe that the success of the NextGenerationEU funds is the best example of the fact that the answer to the challenges we face lies in more Europe, and the government is working every day in that direction: to build the best Spain from a Europe that must inevitably be much stronger and more integrated.

That is the debate we are having now, how to move forwards in this integration in some policies that for many years we have left aside. I recalled in the Lower House of Parliament how in the 1950s there was already talk of the European Defence Community, how the security architecture after the Second World War and the Cold War led Europe to delegate many of these competences and policies to third countries. And how now, after what has happened in these three years of Russia's invasion of Ukraine, we in Europe must also take a step towards integration and, why not, in the future - I am convinced that we will achieve it - have a European Armed Forces, because if we do that, I am convinced that our capacity for deterrence will be greater.

And I am also convinced that in the capacity to influence a new international order that is being designed right now, Europe will be a central player. And this will be very important for us to be able to guarantee a multilateral order, respect for international law, the safeguarding of international humanitarian law and, therefore, prosperity and, in short, the consolidation of peace dynamics based on diplomacy and not on the law of the strongest.

This will be the debate that we will be having - we are already having it - during these months and the coming years, and in which Spain, as a major European economy, is also prepared to make its contribution.

So, thank you very much to elDiario.es, thanks to the sponsors and thanks also, of course, to all those who have followed us on streaming. Good morning.

(Transcript edited by the State Secretariat for Communication)

Original speech in Spanish