2015 Debate on the State of the Nation

Mariano Rajoy announces that Spanish economy will grow by 2.4% in 2015, higher than previously forecast

President's News - 2015.2.24

  • x: opens new window
  • Whatsapp: opens new window
  • Linkedin: opens new window
  • Send: opens new window

Lower House of Parliament, Madrid

After highlighting that Spanish GDP will grow by 2.4% in 2015, Mariano Rajoy offered some further economic data: consumption will continue to grow at approximately 3%; investment in capital goods will increase by over 7%; the current account balance of payments will show a surplus; and the lending capacity of the Spanish economy to the rest of the world will exceed 1% of GDP.

According to the President of the Government, "this legislature still has more to give" so the reformist agenda will continue. In this regard, he announced a reduction in National Insurance contributions for new permanent employment contracts, which will benefit from a contribution-exempt minimum of 500 euros. He explained that this reduction will have "no impact on benefit entitlements for the worker". He went on to add that the goal is to foster a return to work for those groups experiencing the greatest difficulty.

Furthermore, the Government of Spain is preparing more measures for the self-employed: they will receive a one-year break of 100% from National Insurance contributions when they need to reduce their working day to care for children under the age of seven or elderly persons requiring long-term care. Mariano Rajoy explained that, with these measures, the Government of Spain aims to continue bringing the rights of the self-employed into line with those of employees.

A second chance for the people

Mariano Rajoy made special mention of the middle classes because of "their effort and solidarity" during these years of crisis. In his opinion, "Spain owes them a great debt" and "the time has come to start easing their situation".

In this regard, the President of the Government cited a series of measures for achieving progress on the Social Agenda of the Government of Spain. These include the Integrated Family Support Plan, the Framework of Action on the Elderly and the Special Plan for Equality between Men and Women in the Workplace. Furthermore, the tax breaks for large families and the so-called "family cheques" for 1,200 euros handed out to single-parent families with two children will be extended. One million people could benefit from these new measures.

2015 Debate on the State of the NationEFEMariano Rajoy also provided information on what "this government will do to promote reforms aimed at offering a second chance to every member of the public" and thus ease the indebtedness of households, the self-employed and SMEs. From now on, he said, "households will be able to restructure their debt via an out-of-court settlement agreement". A simplified procedure will be created under which it will be possible to agree write-offs, deferred payments and other ways to reduce the debt. Furthermore, "natural persons" under the Insolvency Act will be able to cancel those debts that remain unpaid following execution of guarantees and their assets.

The President of the Government explained that the prescription limits on demanding repayment of the debt will be revised (reduced to five years under standard circumstances), the Banking Best Practices Code will be reformed and a provision will be included so that vulnerable groups can benefit from a definitive non-application of floor clauses.

The reforms continue

In his speech, Mariano Rajoy also discussed the topic of public administration services. In this regard, he said that a new legal framework will be defined for a system of entirely online, interconnected and transparent government with a clear and simple structure. All this will bring benefits for the public, companies and the administration services themselves.

Furthermore, the President of the Government expressed his intention to move forward with speeding up the justice system. On this issue, he announced a reform of the Spanish Criminal Procedure Act (to avoid mass court cases taking too long), a review of the legal fees system and an amendment to the Spanish Civil Procedure Act.

Mariano Rajoy also announced measures to strengthen anti-fraud measures, both in the Public Treasury and the Social Security system. To do so, he said, a reform of the General Tax Act and the Law Governing the Labour Inspection, Social Security and Employment Health System will be undertaken.

Results from three years in government

Mariano Rajoy - 2015 Debate on the State of the NationPool MoncloaMariano Rajoy began his speech by taking stock of the last three years of government. After recalling that the economic crisis reduced revenue by 70 billion euros, destroyed 3.4 million jobs and escalated the risk premium to over 600 basis points, he explained that "we were forced to dedicate two whole years to straightening out that disaster - two tough years of effort and cut-backs to finally balance the books".

However, in 2013, "we managed what many people thought was unfeasable: for Spanish economic activity to start growing, reversing the economic recession we inherited when we came to power". Hence, 400,000 jobs were created in 2014 and, "with the January 2015 data, we can now say that there are 74,000 fewer registered unemployed than in the first month of this legislature".

Three years on, added the President of the Government, Spain is "a nation that has emerged from the nightmare, bailed itself out, regained economic confidence, enjoys prestige, is becoming attractive to investors again, has reorganised the way it works and is seeing growth in consumption". In other words, "Spain has gone from being a country on the verge of bankruptcy to a fine example of economic recovery". Mariano Rajoy said that "Spain itself and the people of Spain deserve all the praise".

Not asking for a bailout, the best social policy

The President of the Government stressed that these targets have been achieved by maintaining the welfare State, "with no social break-up" and without deepening inequality. And more importantly, he said, without asking for a bailout. "That was the great decision of this legislature, the great measure of social policy", he explained, because "a bailout is ruthless, it considers not age nor social status nor the strength or weakness of each household".

However, Mariano Rajoy warned that "everything we have gained in three years can be lost in only a few months". He went on to add that we should not "allow what we have built to be torn down" but should rather commit ourselves to "finishing the job and consolidating our recovery from the economic crisis". In his opinion, job creation is what guarantees the welfare State.

Mariano RajoyPool MoncloaHe also recalled that extraordinary support mechanisms have been implemented for the public administration services, such as the ICO line of credit, the Supplier Payment Plan and the Regional Liquidity Fund. "Over 70% of those funds have been used on social spending", he said. In this regard, Mariano Rajoy announced new financing and liquidity instruments for 2015 worth 39.87 billion euros aimed at guaranteeing the provision of basic services. The fiscal reform was another important measure to be adopted by the Government of Spain, said Mariano Rajoy, which benefited 20 million taxpayers.

As regards the fight against corruption, Mariano Rajoy explained that it represents "a priority objective" for his government. Along the same lines, he recalled all the measures that have been approved and that have made it "much more difficult for corruption to occur". At the end of the legislature, he said, "Spain will have one of the most stringent pieces of legislation to prevent and punish corruption".

As regards the sovereignty process in Catalonia, Mariano Rajoy expressed his constant willingness "to reach an understanding with the Regional Government of Catalonia, as with any other regional government in this country". He once again reiterated the fact he will never accept "the unity of Spain, our national sovereignty, the equality of all Spaniards and their fundamental rights" to be jeopardised.

EU, Greece, Jihadism and Ukraine

2015 Debate on the State of the NationPool MoncloaAs regards the European Union, Mariano Rajoy highlighted the progress made along the path of banking union and the launch of the so-called Juncker Plan. The latter, approved last December by the European Council, represents a commitment to economic growth and job creation as it aims to mobilise up to 315 billion euros between 2015 and 2017. The President of the Government stressed that this money will be used to finance small and medium-sized enterprises and promote infrastructure projects, especially energy projects, mainly for the Iberian Peninsula.

The President of the Government of Spain also spoke about the situation in Greece and backed the agreement reached between the EU and Greece because, as "is to be expected", they will meet their commitments and flexibility will be applied wherever room for manoeuvre was provided. As regards the fight against Jihadi terrorism, Mariano Rajoy said that the keys lie in "political and social commitment, dedicated and constant police and judicial action, and international cooperation".

He also said "it is highly important for the EU to maintain a united position over the situation in Ukraine". In his opinion, "any solution will have to be political and negotiated, and guarantee the independence and territorial integrity of Ukraine".

This is the 25th Debate on the State of the Nation to be held since the transition to democracy in Spain. Furthermore, it is the third and last of the tenth legislature.