Speech by the President of the Government at the closing ceremony of the 41st annual meeting of the Cercle d'Economia

Catalonia Congress Palace, Barcelona

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

Good morning, dear Salvador, President of the Generalitat de Catalunya; dear Jordi, Minister for Industry and Tourism; the Mayor of Barcelona is not here, as he has excused his presence, but I send him a big hug from this rostrum; and, of course, President of the Cercle d'Economia; authorities, ladies and gentlemen; good afternoon.

For me, as the President said earlier, it is an honour to be able to participate once again this year in the annual meeting of this important forum of opinion, a forum of ideas, which is the Cercle d'Economia.

This edition, if I may say so, has a particularly special appeal, as it marks the first time in the history of this organisation that a woman, Teresa Garcia-Milà, has served as president. I believe that this is an achievement that we must all underline. And yet another sign that equality is also advancing in the economic and business sphere, and that is always very good news. So thank you for leading the way, President, dear Teresa.

Ladies and gentlemen, this very morning, the OECD confirmed that Spain will continue to be the large economy in the eurozone with the highest growth this year. Specifically, the forecast is 2.2% for 2026. And this in a context, as you know much better than I do, that is very turbulent, very complex, in which the majority of countries are falling back, and in fact, their economic growth forecasts are being revised downwards. And so we are going to be leaders once again, for the third consecutive year, in economic growth.

Yesterday, in addition to this, we also received data on Social Security enrolment. Alejandro referred to this earlier. I think it is very important to recall that we surpassed the figure of 22.3 million national insurance contributors, achieving the second-best month of May in the historical series. This is 3.5 million more than in 2018. We have therefore been creating jobs for 64 months in a row, more than five years.

I believe that the data reflect an unquestionable reality, and that is that Spain is making progress. And it is doing so thanks, without a doubt, to the efforts of many of its workers; it is also doing so thanks to the talent of the companies; and it is doing so, and I would like to dwell on this, thanks to two factors that are not an end in themselves, but which have helped this economic growth and job creation, this transformation that we are of course promoting in Catalonia and in Spain, namely stability and agreement, or rather, agreements, because there have been many of them.

Stability and agreements that I believe have allowed us to move forward in the right direction over the last eight years, tackling the urgent, but not forgetting the important.

Stability and agreements that have been possible thanks to endless hours of negotiation with the social partners, and include the labour reform, and of course, the pension reform; with governments of all political persuasions, not only at home, but also at European level; and with groups in a parliament as pluralistic as our nation state is diverse.

In this regard, here in Barcelona, I would like to emphasise and express my gratitude for the extraordinary cooperation we have with the Government of the Generalitat, with President Illa, and with all his ministers in many areas of interest to the citizens of both Catalonia and the whole country. Because if Spain and Catalonia, in my opinion, are experiencing a more than favourable moment in the economic, social, employment and institutional spheres, it is because, if I may say so, the government, which I have the honour of leading, has also faced the country's problems head on.

We can see this, for example, in our firm commitment to the agenda of the reunion between Catalonia and Spain, whose most significant milestone, pending the pronouncement of the European Court of Justice, will be the full and effective application of the Amnesty Law. This is a milestone that we hope the government will achieve during the current legislature.

I am fully aware, as I have said on many other occasions, from other spheres and also from other platforms, that the Amnesty Law, as well as the measures of grace that were taken previously, do not represent the end of our duty, which is to confront and resolve the political conflict, but with the same conviction I believe that we cannot ignore the value that all these decisions have had in returning to the territory of politics what should never have left politics.

Therefore, we still have to address the roots of this territorial conflict. Consequently, to make progress on the Brussels agreements with the political formation of Junts per Catalunya. To also fulfil the road map set and agreed with Esquerra Republicana, and for this I am counting on the tireless help and also the wise advice of President Salvador Illa.

I know it will not be easy, but as I have said before, if Spain and Catalonia are experiencing one of their best moments today, it is also because the Government of Spain has tackled entrenched problems and has also dealt fairly and effectively with the challenges facing Catalan society and Spanish society as a whole.

Furthermore, I would like to stress something very important that we can probably develop further later in the conversation, and that is that this understanding between different parties- because there have been agreements, and I would like to vindicate this, both with other progressive forces and also with nationalist and pro-independence forces, both in Catalonia and in the Basque Country - is good for the state as a whole. And then there are the economic, employment and transformation figures, the achievements of the last eight years, looking ahead to the decade of 2030.

This means that we can once again position our country as a leader in growth and job creation, promoting social advances, while at the same time protecting rights and freedoms in the face of the advance of the far right, which is evidently taking place in Catalonia, in Spain, as well as in the rest of Europe and indeed across the planet, making us, in a context of war as complex as the current one, a benchmark for international legality and Europeanism.

So there is indeed a lot of work ahead of us, for this year and for this decade. And that is the greatness of politics. That is precisely the greatness of politics. And that is why I believe it is important to highlight these agreements and the stability derived from them, as essential tools for building on what has been achieved and continuing the task in the coming years.

Because, in my opinion, ladies and gentlemen, this is also- or I would say fundamentally- the main objective of our government, the Government of Spain: to bring about the greatest economic and social modernisation in the recent history of Catalonia and Spain.

And I believe that, furthermore, the starting point from which we look at that horizon is very different from that of 2018. And these are not opinions, they are data. Spain is no longer different in the way it could have been then. "Today it is a benchmark".

We are growing more than ever. But this time we are doing it on a different basis. We don't do it like we used to. We are doing it precisely as the OECD also points out in its report, with much more sustainable, much healthier and much more balanced bases. From cutting rights, from destroying jobs, in short, from competing by making labour relations more precarious, to a labour reform and a rise in the minimum wage, which has also allowed us to reduce inequality to its lowest levels in history.

And with this, we have also moved from the Spain of the "pelotazo" to the Spain of work and entrepreneurship. There have never been so many women working, and never have there been so few young people neither studying nor working; and this, moreover, must be contextualised in a scenario of economic growth where the school dropout rate has not increased. Temporariness is at a minimum, because employers not only operate within this new regulatory framework, but also understand that the competition to attract this talent is also one of the main demands for their companies in the present and in the future, in the 21st century.

And of course, we have the number of employed people at an all-time high. Unemployment is going to fall below 10% this year for the first time since 2008.

Spain has therefore prospered a great deal in recent years, and so has Catalonia. And I believe that proof of this is that for the third consecutive year, Catalonia has exceeded 100 billion euros in exports, thanks to the more than 18,000 companies that have gained and continue to gain markets abroad.

This is an all-time record that we must consolidate, which is why I would also like to announce a new milestone reached since the dialogue in the last bilateral commission between the Government of Catalonia and the Government of Spain to update the Zona Franca consortium, in order to streamline the management of real estate and land for logistics and industrial purposes, increasing the weight of the Generalitat to 40% and that of Barcelona City Council to 15% in an entity that is key for Catalonia and for its growth and industrial development.

Ladies and gentlemen, I believe that we have done a great deal, it is clear that we still have a great deal to do and, furthermore, the president of the Cercle has mentioned some of the aspects. We must do this together, Catalonia and Spain, and I believe that we must continue to do so in the coming years on the basis of five major pillars that I would like to share with all of you briefly.

The first is the energy transition. We citizens have transformed the environmental responsibility we have as a country which, according to science, is very much affected by the climate emergency, into a lever for prosperity and not a brake on that prosperity. Just one current fact will suffice: electric futures for the year 2025 are cheaper in Spain than in Germany, by 55%. 80% cheaper than in Italy. We are the second country, not in Europe, but in the world, second only to the great economy that is the United States, in attracting greenfield energy projects. And we account for one in four green hydrogen projects being considered and developed across the EU. I therefore believe that our energy model- and I am sure that it can also be a subject of debate - is a successful energy model. In the coming years, therefore, what we must do is continue to push this model forward until we are at the global forefront of electrification and energy sovereignty. This is a strategic issue for the EU as a whole.

Two. Training, training and training, and attracting human capital. In this age of walls and fears, we choose to be an open and prosperous country, not a closed and poor one. And that does not mean that we do not have a migration policy. We have an effective migration policy on all fronts. And if you want, we can talk about it afterwards. In any case, I can tell you that Spain is moving towards the Spain of 50 million inhabitants and 100 million foreign tourist visitors to our country. And that is proof that things are being done well, and that Catalonia and Spain, of course, aspire to much bigger things. Because this is the dilemma facing Western societies grappling with the demographic challenge, the demographic winter. The question we must ask is do we want to have a much smaller workforce than we had in 1990, or do we want to have a workforce that is large and robust enough to be able to guarantee the prosperity and the economic growth that, among other things, finances our welfare state? Will there be technological advances, will there be robotics? Of course there will be, but it will not be enough to offset the population decline resulting from the fact that, in developed societies, women and men are free to decide what size family they want to have.

So that is our real priority, and it requires that we treat all citizens living in our country with dignity. By the way, I recall, Teresa, President, that this year irregular migration flows are down by 40%. Therefore, the government is also doing its homework in the fight against the mafias that illegally traffic human beings. We have to recognise rights because in doing so we will also be recognising obligations for these people, promoting their social and professional integration so that they contribute appropriately to the development of our economy and the sustainability of our welfare state. Last week there was a report by AIReF that said that this process of regularisation, normalisation, recognition of rights and obligations for the migrant population that contributes to the economic development of our country is going to involve an initial annual increase of more than 1,000 million euros. This is also the sustainability of present and future pensions.

Along with this second pillar, there is a third, which is obviously the digitalisation and reindustrialisation of our territories. Yesterday we had the opportunity to hold one of the last ministerial commissions of the Recovery, Transformation and Resilience Plan, which is the framework within which the management of Next funds operates. They know there are going to be new resources coming through this sovereign wealth fund we have named the Spain Grows Fund. We aim to mobilise, also leveraging private investment to 120 billion euros to continue modernising our productive fabric and put it at the global forefront. And, obviously, Catalonia will play a key role in this entire process. Without going any further, this very morning I had the opportunity to join the mayor and, of course, the company Grifols, in laying the foundation stone of this great company, which is a world benchmark in the pharmaceutical industry. And this afternoon I will also be with Seat Cupra which manufactures, I like to underline it again, the first 100% Spanish electric car, the first 100% Spanish electric car.

Fourth, we must carry on stimulating domestic demand, and for this what we need to do is... Look, I find this figure particularly interesting because it contrasts somewhat with what the president said. Since the end of the pandemic, real disposable income - that is, household income adjusted for inflation, has grown by 8.3% in our country; real disposable income has grown by 8.3%. Therefore, no inflation. In other words, we are talking about growth which, comparing with the large economies around us, is more than double that of France, triple that of Italy, and quadruple that of Germany. Of course, you could say that we have come from further back, but the facts are the facts. This is the reality. Households' real disposable income has grown by 8.3% in a context of high inflation such as the one we are currently experiencing, derived from the energy shocks caused by the wars in the Middle East, particularly in Iran, and previously in Ukraine. That is why I will never tire of repeating it, and I am delighted that the president of the Cercle has said as much: their staff are paid well. It is good for them, and it is good for you and your business. I think this is a great day for everyone.

Fifth, we will continue to defend fiscal solvency and ambition, because only by harmonising the two can we build a truly advanced, fair and sustainable country in the medium and long term.

And in this regard, I would also like to announce, here at the Cercle d'Economia, that the Government is set to begin the process for presenting and approving the new General State Budget for 2027.

This very week, the order setting out the budget will be published in the Official State Gazette, and over the course of this month what we are going to do is update the macroeconomic framework, with the aim of having our accounts approved in coordination with the rest of the parliamentary groups in the General Courts.

We will obviously share the details with all parliamentary forces, with the media, in the coming weeks. But in this forum, I would at least like to advance some of the basic principles, which have obviously also been inherent in other budgets that we have previously approved.

First and foremost, they are going to be social budgets, because the objective of the Government of Spain is to redistribute wealth, thereby further strengthening our welfare state, so that our public services can reach where they are currently failing to reach, and, therefore, meet the expectations of our citizens, giving them what they deserve.

Second, housing will be a key priority in this draft General State Budget, with the largest ever allocation of public funds in the history of our democracy.

Three, I can also tell you that these budgets will be in line with the fiscal responsibility that we have been cultivating over the last few years. We are going to continue to reduce our public deficit - the OECD forecasts that Spain's public deficit will stand at 2.2% of GDP by 2026 - but what we also want is to end this parliamentary term with a public debt below 100% of GDP.

We are going to do all of this by logically seeking ever closer integration and coordination with the European Union and ever stronger and more diversified links abroad. It is clear, and we can probably talk about it later, that Europe must strengthen its sovereignty - this is the title and the purpose of this year's meeting of the Cercle de Economía - in energy, in technology, in defence. Europe was clearly not meant to be anyone's vassal and its prosperity and freedom cannot be shaken whenever someone powerful writes something on social media. For this reason, I believe that we are rightly committed to renewable energies and to the reindustrialisation of the entire state territory, precisely in order to contribute to this strategic autonomy.

It is also true that this majority, this greater sovereignty, will not be built on our own and that to achieve it, therefore, we will need to expand our presence in the world. And that is why it is so important to diversify our supply chains; to expand our trade agreements, such as, for example, the one recently reached with Mercosur; to strengthen our intermational relations, which is something I believe the Government of Spain is doing.

In short, the budgets that we will present will have this global vocation, this fiscal commitment, this social rigour and this ambition to once again go beyond the Pillars of Hercules. And, at the same time, I would like to assure you, President, ladies and gentlemen - and with this I will finish - that this General Budget of the Spanish State is designed to resolve the problem of regional funding, thereby culminating the path we have been following for some years now. I believe that some data highlight the extraordinary effort that the Government of Spain has been making over the last few years to finance public services in all territories, including Catalonia.

Catalonia has received an additional 60.7 billion euros, compared to the period of the previous administration. So we are talking about facts. Only yesterday, in the Council of Ministers, we approved the payments on account, which amount to 158 billion euros for all the territorial administrations. Therefore, we are also redistributing these fruits of growth, from a territorial point of view, as is appropriate and in accordance with the law. We want to go a step further with the reform of regional funding, twelve years after its expiry. Of course, we also want the central government to take on part of the debt of the autonomous communities, which stands at around 83 billion euros. This is a very important milestone, together with the deliveries on account that we approved yesterday in the Council of Ministers.

These, as I have said, will therefore be some of the guiding principles of this General State Budget, which we will begin to process this very week. A budget which, I repeat, is more ambitious, even more socially focused, and even more fiscally responsible.

I am going to end with this: I believe that, if there is one thing I can share with you after these eight years at the head of the Government, it is that experience, if it has taught me anything, is that there are two ways of understanding and approaching a country's economy: when you believe in its potential and when you do not.

For a long time, we were governed by those who did not believe in the potential of the Catalan economy and the Spanish economy as a whole. By those who thought that Spain and Catalonia could only compete on the global stage on the basis of low wages, lax regulations, polluting energies, small companies in sectors with little added value. Those who did not believe in our economy applied their neo-liberal orthodoxy. And it did not work because the growth they reaped was insufficient, fragile, environmentally unsustainable, socially and territorially unjust. And it had its political and social implications, as we recall not only in social demonstrations, but also in territorial conflicts.

We humbly believe that we are applying a different formula; one that does believe in the talent of our workers, and in the potential of our companies; one that is committed to innovation, training, clean energy, open trade and industries of the future. One, therefore, that is not afraid to compete with the big players and has no qualms about sharing the limelight with the smaller or medium-sized powers of the world. One in which the focus is not a city or a region, but a concept of shared prosperity. And I humbly believe that this formula is working. And now, therefore, our duty is to maintain it in order to complete this change of model, this transformation. Reap the enormous social and economic benefits that this will bring us, if we persevere in this direction of stability, agreements, trust and ambition.

That, ladies and gentlemen, is our promise. And that, ladies and gentlemen, is our plan. Thank you very much.

DIALOGUE BETWEEN THE PRESIDENT OF THE GOVERNMENT, PEDRO SÁNCHEZ, AND THE PRESIDENT OF THE CERCLE D'ECONOMIA, TERESA GARCIA-MILÀ

Teresa Garcia-Milà: Thank you very much President for your speech full of content, really, and I want to thank you for being with us again this year and for bringing us this optimistic vision of the country. In fact, although in our opinion piece we discuss Europe's challenges and difficulties, we have these days also seen representatives of companies that are doing truly impressive things. And this morning we had biotechnology and then we had technology companies also of a high level. And the truth is that although we are still calling for everything we have previously been calling for, we are seeing that there are indeed some very powerful companies in our country that need to grow, that need a better environment at European level - for example in the capital market and the like - and that are really doing innovative, unique things at the cutting edge of knowledge. So it's a bit along those lines. Well, since you have told us that you are going to present budgets, I would like to know a bit about the timetable.

Response:We are going to start this week with the Treasury's order, which we hope to get underway in the second half of the year, and process and bring to Parliament as soon as possible.

Teresa Garcia-Milà: And you mentioned regional funding. I would like to ask you something.We have already mentioned this, that we see regional funding as a model that is a step forward, but we are concerned that it may come to nothing - that it may be approved and never come into effect - because we have been waiting for so many years, and now we can finally see a glimmer of light. What do you of this timescale?

Response:B Well, I think the first thing, the concept, the category. The fact is, as I said earlier, Spain and Catalonia are currently enjoying a more than reasonable economic, social and institutional reality compared to many other countries where, in short, institutional political instability is evident and palpable, with changes of government every two or three years. In short, the administration I am honoured to lead has now been at the helm of the country for eight years. Well, I think all of this comes down to executives with a political will to tackle the root causes of problems, and regional funding is clearly not only for Catalonia, but also for many other regions.

And I must not forget local funding, either. In fact, at the last Council of Ministers, just yesterday, we approved one of the measures that allows us to extend financially sustainable investments to local councils, specifically to continue supporting housing policies and the development of subsidised housing.

So, what I mean by this is that we are approaching these debates with rigour and also with empathy from a social and territorial point of view. I believe that regional funding, first and foremost, represents not only a recognition of Spain's composite structure, but also an enormous sacrifice on the part of the General State Administration, because it is a transfer of more than 21 billion euros that will go to the autonomous communities to finance public services. 21 billion euros.

In fact, just yesterday the International Monetary Fund was telling the General State Administration that you should do this progressive regional financing, because there will effectively be fewer resources for the General State Administration when it comes to responding to many of the challenges that are inherent to the world in which we live. Therefore, an additional 21 billion euros. Two. I believe that we are resolving one of the main problems, challenges and concerns that some territories legitimately had by providing a more homogenised response in terms of per capita funding for the territories. And then we also pay close attention to the reports that have evidently pointed out gaps, difficulties, opacities, lack of understanding regarding the simplification of the functioning of the regional financing system itself.

There will be people who say, parties or territories, this is not enough. Perfect, but there is a proposal that is good for the Spanish State as a whole, for the territories, and it is also good for Catalonia. Therefore, especially those Catalan parliamentary forces that today are perhaps in the "no" camp, I would ask them to make an effort to negotiate, to be constructive in order to provide a response that I believe could be very positive in terms of financing for Catalonia. This, of course, is one of the key elements: debt relief. We are talking about the state taking on 83 billion euros. This will mean that the autonomous communities will pay less interest and therefore have easier access to financing on the markets. And finally, in addition to the write-off, we have, as I said previously, the payments on account, which amount to 158,000 million euros.

Therefore, I believe that we are providing a cross-cutting response, which I believe is quite comprehensive, to one of the main objectives and commitments of my social democratic administration, and that is the commitment to strengthen the public services that are in the hands of the autonomous communities.

So, in short, I believe that the budgetary debate goes hand in hand with the debate on regional funding, because it will effectively involve a transfer of economic resources from the General State Administration in favour of the autonomous communities.

I always say the General State Administration, and I want to underline the point, because when we talk about the state we mean everyone, from the smallest local council, to the Provincial Administration, to the Autonomous Community, and, of course, the General State Administration. It is more a matter of distributing these criteria and these economic resources much more fairly to the responsible administrations. I myself believe in the principle of subsidiarity, which is upheld and forms part of the acquis communautaire; and, therefore, I have no objection at all to there being more financial resources in the hands of the autonomous communities.

I would also like to see the development of a policy of accountability like this on the part of the regional administrations. There are administrations that have obviously had a very distinct identity for a long time, as is the case of the Generalitat of Catalonia and the Catalan institutions, but this should also be a key consideration in many other regions where, whenever there is a problem, the blame is always placed on those at the top. I, of course, accept this with extraordinary sportsmanship, but I do say, come on, something can be done, for example, in the health sector, when this government has allocated 300 billion euros more in funding to all the autonomous communities than previous administrations. Why are waiting lists in public health care getting longer rather than shorter when these amounts of financial resources are being given? This also has to do with management and with the political and social commitment of the governments in power in each of the territories.

Teresa Garcia-Milà: Indeed, the autonomous communities are responsible for health and education, as well as social services.

Answer: and social welfare and housing. In this regard, you mentioned earlier the legal certainty that property developers and housing construction companies require; I have, of course, met with them and I share their view. But of course, in the Spanish Parliament we have an amendment to the Land Law to provide legal certainty, which is currently being blocked by many political parties in the Lower House. It is not that the Executive is not doing its job - it is - but I believe that Parliament is sometimes driven by factors that have nothing to do with the public interest and everything to do with party politics.

Teresa Garcia-Milà: Let me press you a bit on funding. Do you think we will have a model before the end of the year?

Response:S Yes, I think I'm going to carry on working because, as is often discussed, there is a lot of talk about when this parliamentary term will come to an end. I have said this on many previous occasions. Moreover, I think I have been much more explicit when, for example, I have talked about the whole agenda of reunification, which I think is very important in order to be able to definitively address the underlying territorial conflict. I think it is important that this agenda of reunion, also from a legal point of view, be completed.

Something rather curious, President, something I have noticed about the current leader of the opposition in relation to the debate on the motion of no confidence. Because, believe it or not, the leader of the opposition and the PP have explicitly acknowledged a political force - in this case Junts per Catalunya - which until very recently they had refused to recognise. I think this is good news. Seriously, I am not saying this to be provocative, because what the pardons, the clemency measures and this Amnesty Act all aim to do is restore something that one of La Vanguardia's leading analysts alluded to at the time, after the amnesty, when he remarked: "We are all in this together now". Well, I think this is a very important point in making our democracy a much stronger system, and, why not, in the future, enabling the Spanish right to find common ground again in terms of political understanding, with the Catalan right and also with the Basque right. And I believe this is something which, although it may not seem so, in the debate on the motion of no confidence - and I do not know whether Mr Feijóo did it deliberately or mistakenly - has proved us right. This is a serious matter. When people say we need to talk about serious matters, this is indeed serious, because it is a change, and it seems to me that it is a change for the better.

Teresa Garcia-Milà: Let me go back to Europe for a moment. Because you were talking about the single market. We were discussing this too, because the single market certainly still has plenty of room for improvement, especially perhaps in telecommunications, in energy, in the savings and investment market, and the capital markets for savings and investment. And we mentioned in our article yesterday - and Martin Wolf did too - the possibility of groups of countries taking the lead. Do you see Spain as a possibility? Can you see Spain leading some of these developments?

Answer.- Yes. No doubt about it. In fact, if you think about it, Teresa, President, if you move towards an enlarged Europe of more than 30 member states, we will most probably have to move towards different multi-speed Europes depending on the policies. Because, indeed, there will be countries more inclined to a federalisation of the European project than others. The great paradox in Europe right now is that it needs a federalist impulse and instead has ultra-nationalist governments in many parts of Europe.

But, mind you, I believe that Spain is contributing to this strategic autonomy in a particularly interesting way. When we talk about strategic autonomy or, for example, about what the main sectors you have also discussed in this forum are, we are talking about artificial intelligence, we are talking about energy, we are talking about talent, we are also talking about biotechnology, and we are also talking about critical raw materials. Well, in terms of AI, all the data suggest - and we still have a lot to do in this regard - that, for example, Microsoft or Stanford University, which is one of the leading ranking bodies, place Spain as the top European country - sixth in the world in some rankings, seventh in the world in others - in terms of the degree of use of AI, and in terms of the development and reality of an AI ecosystem. Therefore, we are starting from solid budgets, from favourable conditions, which are undoubtedly insufficient, but - in comparison with other European countries - are very positive.

Two, regulations. I have the honour of having been the president of the European Council during the Spanish presidency of the EU, which brought about the first regulation in Europe on artificial intelligence.

Three, we have very strong infrastructures and capabilities. We have AI factories in Galicia, and in Barcelona, with the Barcelona Supercomputing Center. We are currently moving forwards with this and working together with the Government of Catalonia on this major European gigafactory project, one of the three to be built in Spain, and it will be a joint project between Catalonia and the whole of Spain, in which some very important are already taking part. The president of Telefónica, Marc Murta, is here. There is Telefónica, there is ACS and there is Banco Santander, which has joined this major project. Therefore, we have projects that can also place us at the forefront of artificial intelligence in Europe. Biotechnology: clinical trials, the healthcare system, we have an absolutely extraordinary ecosystem for life sciences and also for pharmaceuticals. I believe that Spain, and Catalonia in particular, can also contribute a great deal in biotechnology. Regarding talent, it is much the same story: in the last eight years we have increased the number of vocational training places by 400,000; and there is something I have said from this rostrum before and is one of the things I am particularly proud of as President of the Government of Spain, and that is yesterday, in the national insurance contributor figures, while eight years ago the percentage of young people with no qualifications or work was almost 20%, today it is at rates comparable to the European average, and this in a context of economic growth. We are thus laying the foundations for structural unemployment in the medium term to be much lower than it is today, because we are increasing the present and future employability capacities, particularly of our young people.

Four, critical raw materials. The Government of Spain, now in public consultation, has launched a strategy for the promotion of critical raw materials in Spain. We have critical raw materials. We must restore the prestige of mining, because we can once again, with sustainability criteria, contribute to European strategic autonomy also in this, in this dimension. And last, energy. One of the things that I think has been most important about this government is that we now have a degree of electrification of the Spanish economy that represents 25%. Our ambition is to reach 35% by 2030. This, together with the fact that 60% of electricity comes from clean energy sources, means that today we have one of the cheapest electricity prices in Europe, meaning that competitiveness is not being eroded as it is in other parts of Europe. What is - and Barcelona is a protagonist in this - the great challenge? Well, let's hope our French neighbours listen to us, and we are able to implement this energy interconnection between Barcelona, Catalonia, Spain and Portugal; in short, the Iberian Peninsula and the rest of Europe. Because this is not a diatribe or a problem between Spain and France, this is a European challenge to which Spain can make a positive contribution.

Therefore, it is true that much needs to be done in terms of open strategic autonomy, but it is also true that Spain is playing a constructive, driving role in this European strategic autonomy. And I think that should make us proud, and above all determined, that we have to continue on this path.

Teresa Garcia-Milà: We don't have much time left, but I'm going to ask you one last question, because you said in your speech that irregular migratory flows have fallen by 40%. I was not aware of these data. And I find it very interesting. Even so, the question I would ask you is, do you think that with the current immigration regulations we won't need to regularise again in ten years?

Answer: President, the history of humanity is a history of migration, and that is self-evident, it goes without saying, but it is still worth remembering at a time when there is such a strong backlash. I always remember my grandfather. During the dictatorship and in the early or late years of the transition, my grandfather, like many other workers, was an emigrant who had to make a living in Germany and lend a hand to his family, who were living in Spain. Also during the financial crisis there were many young people who went to live and work in other parts of Europe and also around the world, in Latin America. And, therefore, if we asked those countries that welcomed our ancestors and our sons and daughters to recognise the rights of that migration, how can we not do the same for those who are already living and contributing among us? When talking about migration policy, we are talking about an all-encompassing migration policy. In what sense? What are the key elements of immigration policy? First, a European perspective. And there is the Pact on Migration and Asylum, which was achieved precisely under the Spanish presidency of the EU in the 2023 semester.

Two, the fight against irregular migration, I declare myself against, absolutely against the externalisation, with hotspots, as they say in English, of migration centres. First, because it is a sham that serves no purpose, and has been proved useless wherever it has been used. Let us recall British governments that made agreements, for example, with African countries, but to no avail. The same is happening with European countries, for example, which are doing the same in Albania. They are useless. What works in the fight against irregular migration is cooperation with transit countries and countries of origin. And that is what we are doing: with Morocco, with Mauritania, with Senegal and with Gambia. We are doing so, and the figures are there: right now there is a drop of more than 40% in the arrival of irregular migratory flows to our country.

And three; we need, of course, a circular migration programme. You, President, are the representative of many groups, of many economic sectors, and you know this perfectly well. I am thinking of the construction industry. It is clear that the contribution of immigrants is needed to continue developing much of our country's productive sector - not just economically, but in terms of business - because the local population, let's call it, either work in other sectors and do not want to work in these specific sectors, or because the workforce in these sectors is already qualified.

And last, integration policies - policies to integrate migrants - and in this regard, the Government is working on an integration plan backed with financial resources, because it is the autonomous communities and the local councils that obviously have this responsibility, as set out in the Constitution and the Statutes of Autonomy, and we will shortly be announcing this plan for the integration of migrants in our country. But, you see, the dilemma is this. If we look at the data on how this demographic winter facing the West is set to unfold and how it will affect Spain, the data show that if we do nothing - and by 'doing nothing' I mean that, of course, we have to boost family policies as this government is doing; in fact, one of the main achievements mentioned in the polls is having equalised and extended the family policy of paternity and maternity leave - well, we must continue to encourage the birth rate, but the state can only go as far as it can go. There is a free, sovereign decision of the woman and the couple as to how many children they want to have and when.

But then, of course, there is the contribution of migration. If we do nothing about this, President, what the figures tell us is that two or three decades from now Spain may have a workforce the same size as it was in 1989-1990. That's the way it is. And we have a major advantage over other countries, namely that the migration is very similar both culturally and linguistically, being from Latin American. Incidentally, regarding this regularisation process, it is mainly Latin American citizens who are applying for it, because they are already living among us - Colombians, Venezuelans, Ecuadorians - from all parts of Latin America.

Therefore, I insist, I think it is clear that the dilemma is whether we want to have open and therefore prosperous societies, or closed and therefore impoverished societies. Those who talk of mass deportations; those who, as was the case last week, gather in Porto to talk of white supremacy over the rest of the races of humanity; those who tell citizens that there is no need for migration, are not only lying, but they are jeopardising the present and future prosperity of Catalonia and the country as a whole.

What we have to do is, effectively, do it intelligently, fight against mafias and carry out integration processes that effectively allow us to coexist while respecting the culture of the host country, which in this case is Catalonia and, of course, Spain. But I am very frank and very clear: of course, the dilemma is that either we want open and prosperous societies or we are going to condemn Catalonia and Spain to poverty and self-absorption. And I don't want that for my society, because we are seeing it in other places. What has been the secret of the United States' success? It is not just my opinion, it's what academic experts and scientists say: above all, the ability to embrace diversity, to create innovative ecosystems where people of different nationalities can work together in a university laboratory and achieve the technological and digital breakthroughs from which humanity is benefiting right now. Is the United States giving this up? Are they within their rights? It is legitimate. Should we pass this by, or should we seize this opportunity precisely to attract that talent? That is what we are doing, with more or less success, but that is what we are doing and that is what I believe Europe must also do.

Teresa Garcia-Milà: And you know that the Cercle agrees with immigration flows. In fact, our role was not to oppose immigration, but rather to ensure that immigration goes hand in hand with the model.

Response:L Orderly migration, indeed, Madam President, and integrated. I believe that the Government of Spain is also involved in this.

Teresa Garcia-Milà: I have a question, and I think I will ask it, and then, if you like, we can end it there. They ask me if you could explain a little bit more about the budgets - everyone is waiting in anticipation. How do you foresee the approval of the budget in the Lower House of Parliament going? Do you see the possibility of finding majorities to support your budgets?

Response:Let'ssee, I think that every legislature has, shall we say, its own characteristics. This Legislature has certain characteristics that I believe, if you will allow me, can be classified as historic, because they are unique.

The European funds, of course, are unique. On 31 December, we will be completing something that I believe is a historic milestone in the construction of Europe: the mutualisation of debt and the definition of European public goods - climate, technology, talent, training, security and defence, as you mentioned earlier - which will culminate on 31 December 2206.

Two: The agenda for reconciliation and normalisation that clearly affects Catalonia, but also the whole of the country, and with it a democratic political understanding between different forces of different kinds, nationalists and pro-independence forces, of course, but also the Spanish Socialist Workers' Party and other progressive forces, as well as nationalist forces in other regions such as the Basque Country.

I believe that it is very important to reach this milestone, and also, if the European Court of Justice finally agrees with the Spanish Legislative power on the adaptation of the amnesty to European legislation, to be able to complete it fully and effectively. Because, in a way, from a political point of view, what we are doing is restoring in democratic and political terms the practice of engaging in dialogue with political actors who have been legitimately elected by the citizens, as is the case with Junts per Catalunya or Esquerra Republicana.

I think this is a very important step, it is not the end, it is the beginning. And, in fact, both the Brussels agreements, and also in the agreements we reached with Esquerra Republicana, we have addressed these issues and our commitment is to continue with them after 2027.

But it is also true that it is necessary to support this dialogue with economic policies appropriate to the economic situation. And indeed, the economic situation today is different to what it was in 2023. I therefore call for an effort of generosity, responsibility and commitment to dialogue from the parliamentary groups, including Catalan pro-independence and nationalist forces, both in the Basque Country and in Catalonia. Because I believe that the effort is worth it, and because I believe that we are reaching the end of a stage, President, that has been going on since 2017. It's easy to say, but we have been dealing with this issue since 2017.

Well, I believe that we have to overcome it, we have to meet again, we have to return to politics and talk in political terms about these issues, which are obviously legitimate and of concern to a part of Catalan society, and which neither the Government of Spain nor Spanish politics as a whole can ignore.

Teresa Garcia-Milà: We thank you very much not only for your presence, but also for the content of your speech, and for the clarity with which you have spoken. Your closeness and trust in the institution is very much appreciated, because I believe that, otherwise, you would not be here every year. Thank you very much, president, for joining us once again, and now we close this meeting of the Cercle, the 41st.

Response: Thank you.

(Transcript edited by the State Secretariat for Communication)