Press conference by President of the Government following European Council meeting

Brussels

President of the Government.- Ladies and gentlemen, a very good evening to you and thank you very much for attending this press briefing.

Allow me to start my speech by sending out my warm regards to the family of Hodei Egiluz. Unfortunately it has been confirmed that the young man who was missing since October 2013 has died. I had the opportunity to be with his family a little more than a year ago and to express to them the government's support in their admirable search to find the young man. I wish to send them my warm regards, my support and my affection from here today.

Ladies and gentlemen, as you know, we have held yesterday and today an extraordinary meeting of the European Council with two main issues up for discussion: on the one hand, the adoption of a raft of decisions and statements regarding the role of the United Kingdom in the European Union, in light of the referendum to be held on the continued membership of the UK in the EU; on the other hand, the adoption of certain conclusions that take stock of the state of application and progress of the measures adopted by the European Union to manage the migratory and refugee phenomenon. We also took the opportunity to review the situations in Syria and in Libya, and to endorse the recommendation on the economic policy of the Eurozone under the economic oversight disciplines of the so-called European Semester.

Yesterday afternoon, a round of speeches was made on the latest texts distributed on the issue of the UK. After that, there have been intense negotiations between some of the Member States that had raised specific problems, and in the end, we reached an agreement that is acceptable to everyone, an agreement which, while respecting the fundamental and founding principles and values of the European Union, we trust will serve to ensure that the British people opt to stay in the European Union.

These were, and are, the goals we all share and I sincerely believe that we have achieved them. We have all made a very significant effort to accommodate the petitions made by Prime Minister Cameron. We have been both flexible and constructive.

For Spain, for the European Union, for the United Kingdom and I believe, in all honesty, for the interests of the British people and also the Spanish people it is very important for the United Kingdom to stay in the European Union - integration and not segregation - that is the way the world is moving.

Spain has focused on defending one of the fundamental principles of the European Union - the free movement of workers within the European Union for work purposes - and hence indiscriminate access to social benefits. I must say that this goal has been achieved to a reasonable extent.

The text approved limits, in a much clearer manner, the exceptions and restrictions allowed for the free movement of workers compared with the first text we were given two weeks ago. The observations made by Spain have been accepted and I believe that we can all congratulate ourselves on this. It is more clearly stated now that the exceptions and restrictions are precisely that, exceptions that must be justified and limited in time, in their effects and non-discriminatory on the grounds of nationality.

Spain was also seriously concerned by the text presented to us about ensuring respect for equal treatment and for the powers of the financial and banking markets. To that end, together with many other partners, we requested amendments and technical details in these texts. And we consider that the text is an improvement on that initially proposed.

As regards the heading on sovereignty, we limited ourselves to acknowledging the specific situation of the United Kingdom, for whom an increasingly closer EU does not necessarily mean political union, while the rest of the partners do not renounce that goal. Moreover, I wish to make it clear that for Spain, and this is a goal shared by our main political forces, political union is indeed an ultimate goal.

As regards the heading on competitiveness, I should state that we have not only accepted this, but we also share and support it. A European Union that is open to trade, competitive around the world and focused on the goals of research, development and innovation, together with a digital single market and the single energy market, is a Europe that we want to see.

Finally, I want to make two things clear: what we have agreed on today does not mean any amendment to the Treaties or any potential amendment to the Treaties; what the text refers to in order to incorporate the interpretation agreed on today will be made, in the end, by respecting the revision procedures established therein, and of course the provisions contained in the Spanish Constitution.

In another scheme of things, during last night's dinner, we exchanged opinions from different points of view on the migratory phenomenon, which served to adopt the conclusions at the end of this dinner. Spain once again insisted on a basic principle: the best way to always resolve a migratory crisis is by tackling its root causes to avoid its consequences. In this regard, firstly we must cooperate with the countries of origin and transit of the migrants and refugees, combat the people traffickers by dismantling their criminal organisations, adequately control our borders and implement an effective return policy, enabling those people that are not entitled to the right to asylum under our legal systems to return in an organised fashion to their respective countries of origin.

Spain remains committed, in a supportive fashion, to the relocation and resettlement of those people that have come to Europe fleeing warfare, terrorist barbarities and regimes that respect not even the most basic human rights. But to do this, the decisions adopted must be set in motion as soon as possible, particularly on the issue of taking in and registering those applying for international protection. We hope, and the European Council insisted on this, that this will be done in the coming weeks.

As I said, nothing can be done without the cooperation of the countries of origin and transit of the refugees and emigrants. In this regard, the role of Turkey and its cooperation are key to this crisis. We have already agreed on a major Financial Facility to help Turkey manage this crisis, both in terms of taking in refugees, and in the fight against the mafias trafficking human beings and in border control. Turkey must, in turn, meet its commitments. That is why we will meet again with the Turkish Prime Minister in the near future.

The next issue I wanted to mention to you is that we also approved the specific recommendations for the Eurozone as a whole at this European Council. As you know, this is a new feature of the so-called European Semester. The recommendations for each of the Member States will be approved in June, while at today's Council meeting they have been approved for the Eurozone as a whole.

There are four recommendations and, as I announced previously, they are fully aligned with the economic policy strategy that we have been implementing for the last four years:

- The first recommendation is to correct imbalances. In those countries with a deficit, they should implement reforms to boost productivity, promote job creation, increase competitiveness and improve the business environment. In those countries with a surplus, measures should be taken to strengthen domestic demand and potential growth, including carrying out structural reforms.

As you can see, Spanish economic policy is clearly in line with this recommendation. The competitiveness of the Spanish economy is improving as can be seen by the figure of more than 250 billion euros in exports of goods in 2015, an all-time record in our country.

- In the labour market, the European Union recommends flexible work contracts, ongoing training, policies to facilitate the return of the unemployed to the job market, adequate and sustainable systems of social protection, and a reduction in the tax burden on labour. Reforms are also included under this recommendation to boost open and competitive goods and services markets.

The labour and training reforms, allowances for hiring, the 500-euro exemption for permanent contracts, the energy and market unity reforms are all undoubtedly undertakings that comply with this European consensus and which we have approved in recent years.

- On fiscal policy for 2016, the Eurozone must maintain a neutral fiscal impact and, with a view to 2017, the EU urges levels of public debt to be reduced, which is precisely what we are doing here in Spain: higher tax revenue collection than forecast has been allocated to reducing taxes and meanwhile, year-after-year, the deficit is being reduced and it is forecast that debt will start to be reduced as from next year.

- On financial policy, facilitate the reduction in bank loan defaults, improve insolvency procedures and facilitate orderly deleveraging in countries with high stock levels of private debt. The restructuring of the banking system in our country and the reduction in private sector debt are undoubtedly good examples of compliance with this recommendation.

In short, these recommendations provide huge backing for Spanish economic policy and, above all, for its results. And, as I said, they leave many proposals made in our country outside of the European consensus of moderate centre-right and centre-left formations. It is clear that only a moderate government can continue to implement this type of policy.

As regards international political issues, we have tackled the crises in Syria and Libya. In terms of Syria, the European Council called for the swift implementation of the agreements reached by the International Syria Support Group, particularly the immediate cessation of hostilities, the end of bombing raids on the civilian population and access of humanitarian aid to Syrian territory. In terms of Libya, we have urged all parties to apply the Libyan Political Agreement in order for the Government of National Accord to start operating as soon as possible. This is an essential pre-requisite, albeit insufficient by itself, for the normalisation of political life in the country, for the fight against illegal emigration and to combat the terrorist threat from DAESH.

I will now take any questions.

Q.- In terms of social aid for children, in the text agreed with the United Kingdom it was made patently clear that any State may apply these restrictions on aid per child. The German Chancellor, Angela Merkel, has just announced that they are going to weigh up and study this possibility. I want to know whether Spain is going to study this possibility, rule it out or whether it has already been studied.

President of the Government.- No. Spain will not apply the measures that may be applied, as the case may be, by the United Kingdom, because at this time this type of aid does not exist in Spain. The only similar aid is that which is established in the Personal Income Tax return which undoubtedly offers tax breaks and aid for families with children. It is not our intention to apply this. It is quite another matter what the United Kingdom or any other country in the European Union chose to do; they may do this subject to their national legislation. Spain will continue to help all those people who live in Spain and the aid per child will remain in force.

Q.- President of the Government, are you worried or concerned that an agreement like this, a lack of commitment, to put it that way, by the United Kingdom, may harm the political union, which you have always advocated, of the European Union?

As regards the situation at home, why do you believe that new elections will be held in June?

President of the Government.- In answer to your first question, in Spain - at least, that is my opinion and I believe that is the opinion of the majority of the political parties and of the Spanish people - we are going to work to ensure Europe enjoys a political union.

It is another matter whether the United Kingdom holds a different opinion. In fact, that is nothing new. The United Kingdom is not a member of the Eurozone nor does it subscribe to many European policies. We believe it would be positive for it to elect to stay in the European Union. We understand that it does not want to be a part of a political union, but we believe that this would be positive for Europe and the most important thing is what the vast majority of countries in the Eurozone think, and even some of those who are not members of the Eurozone at this time.

As regards your second question, I imagine that you are asking this in relation to the information published by the Spanish media, because one media outlet recorded a conversation of mine.

On this issue, I only want to say that I think that there are two possibilities to form a Government of Spain at this time: the sensible option, which is what we proposed on 21 December, which is a coalition such as exists in many countries in the European Union, because that is what the citizens of those countries in the European Union have said they want, and that means the People's Party, which should govern because it has a significant majority, the Socialist Party and - I pointed to this back then - Ciudadanos, although this is not strictly necessary because it doesn't have any decisive power; but I believe it would be positive for them to also be in government. That is one possibility and then there is another possibility, which is the Socialist Party with Podemos, the three allied parties, plus the United Left, the Basque Nationalist Party, with the pro-independence parties abstaining.

My opinion at this time…, no, not my opinion; the certainty I have at this time is that Mr Sánchez does not want to talk, because he has not wanted to talk with us about the most reasonable and sensible policy which is a coalition between the PP, the PSOE and Ciudadanos. I believe this would be great because they could join together; but it would be impossible to form a reasonable and reliable government that could tackle the problems in Spain with Podemos and all the other parties, wouldn't it?

So, at that time I stated my opinion in a private conversation which has been disclosed. I believe that the most likely outcome at this time is that new elections will be held, which doesn't mean that I am not going to fight to achieve what is reasonable and sensible. And what is reasonable and sensible is that the leading party, the second party and the fourth party form a government, which would have 252 seats in Parliament, which could undertake reforms and which I believe would send out a very strong message, from an economic point of view and which would generate a great deal of confidence both in Spain and further afield.

I am going to continue to wage this war, but in the end, Mr Sánchez has said, and you have seen this, because I have repeated it on numerous occasions to many of you, that he doesn't have anything to say to the People's Party. Let's wait and see if he is capable of winning a vote of confidence and, if not, I will call him to see what he wants because, if he doesn't achieve what he is trying to, then I imagine that he will sit down to talk with the People's Party with an approach and an attitude that is sensible and in line with what is applied in other countries in the European Union; for example, here in Belgium, in Germany, in Austria and in many other countries.

Q.-Mr President of the Government, if elections are held again, as you feel they will be, I would like to know whether you will stand as the candidate for the People's Party. Can you confirm that possibility?

What will be your party's response in terms of the fight against corruption, following a week in which new cases have emerged, both in Valencia and in the Region of Madrid?

And we have just seen an announcement made by Moody's whereby the outlook for Spain has been downgraded since the reforms were halted. I would also like to know your assessment of this.

President of the Government.- If elections finally take place, I would like to stand as the People's Party candidate. I was the candidate at the last elections. We won those elections with a margin of 1.7 million votes over the second largest party, which is a very significant margin, with 33 more parliamentary seats than them, and hence it is my intention to stand again in the event that elections are finally called.

The fight against corruption. We will make every effort and accept all sensible and reasonable proposals made to us by whoever wishes to make them. During the last term of office, we approved the largest raft of legislative reforms in the fight against corruption ever seen in Spain. It is clear that some cases have come to light now that affect us, that affect the Socialist Party, that affect Compromís in Valencia, the layoff plans…, and various other political forces. These come from the past. I believe that the effort we need to make now must be forceful and clear and we need to continue approving laws that make us more effective in the fight against corruption.

Moody's. It is clear that we are starting to see certain warnings caused by this situation of uncertainty, this action by the Socialist Party that is not capable of saying what their position is, which seeks to unite political groups with ideas that will not convince anyone and which are not good to helping generate economic growth and for creating jobs… Moody's is giving us a heads-up.

But here everyone is giving us a heads-up based on the results we have seen come through, which is that Spain is the country that has generated the most economic growth in Europe in the last year and it is the European country has done so for most years. Spain is a country where just four years ago… I was here four years ago, four and a bit years ago, when the country was under the threat of a bailout, on the verge of bankruptcy, with negative economic growth, where jobs were being shed each month and where unemployment was on the rise. We are now in a different situation and, for that reason, I believe that we should persevere with the economic policies that have worked, economic policies that have been useful and which have placed us at the forefront of the European Union.

This is the war that some of us have been waging, but which some don't want us to wage, but we will persevere with this because we believe this is positive for the Spanish people as a whole and we are at the service of the Spanish people and not of just a few specific Spaniards.

Q.-You have just said to us that if Mr Sánchez fails in his attempt to win the vote of confidence, you will call him to Moncloa Palace. I would like to know whether you will ask him to form part of a government headed up by yourself, and specifically, if you would be prepared to offer him the position of Vice-President of the Government in this great coalition that you have been proposing since 21 December - you have said this several times - if you are willing to specifically offer Mr Sánchez the position of Vice-President of the Government in a great coalition headed up by yourself.

President of the Government.- If Mr Sánchez does not receive the necessary number of votes to be invested, we will try to do that, to which end we will also need a sufficient number of votes. And hence I will call Mr Sánchez; I will call him, I will meet with him wherever he sees fit and opportune, and I will say to him what I told him with some difficulty, because the meeting on 23 December was somewhat bizarre. I will say to him, "I believe that what common sense dictates, what is logical, what is democratic, what is reasonable and as happens elsewhere in Europe is for us to form a government headed up by the leading political force together with the second and fourth leading forces".

And, as I have been saying since 21 December; everything else is open to discussion and negotiation. The government could be a coalition, the government could operate with parliamentary support… Whatever they want. That is what needs to be discussed; but, in all honesty, I still maintain now what I said back then on the very first day: in the way the parliamentary chambers are configured, a government needs to be formed such as those in Germany, in Austria, in the European Commission and throughout the European institutions. This would be a government with the backing of 252 MPs, a moderate government, which would be supported by the rest of Europe and which would inspire confidence in the economic and social stakeholders.

I have been saying the same thing for two months now. I appreciate that there are some who don't like this, but the alternative is the PSOE, Podemos, the United Left and the pro-independence Catalan parties. That is not my alternative. My alternative is the first one which, in all honesty, is the one that responds to common sense, and hence, if Mr Sánchez does not win the vote of confidence, those of us who have not stood to be invested because we understand that we did not have sufficient votes to win the vote of confidence and be invested, will try to do so.

Q.- President of the Government, after today's agreement, there are two alternatives: either Cameron wins the referendum or he loses. In the event that he loses, what situation will the European Union be in, in your opinion? In a better situation to make progress on political union?

President of the Government.- If Cameron were to lose the referendum it would be very bad news indeed; it would be very bad news for the United Kingdom, for the people of Britain, for Europe and for all European citizens. That is my opinion, which I have expressed on various occasions and which I reiterate here today. In other words, the United Kingdom must form part of Europe and what the political leaders have done here in a meeting of the European Council over the course of two days, yesterday and today, is make an effort, not only to say to Mr Cameron that we are going to help him in the referendum but also to send out a message that all of Europe has said to the British people to "stay in".

From the point of view of the Spanish people, there are no interests at stake of any type. What we have here is a relationship that should not be broken up in any way whatsoever. Just remember, for example, that the country which Spain most invests in around the world is the United Kingdom; and also remember that the largest number of inbound tourists to Spain, which is a tourist destination par excellence, hail from the United Kingdom and just remember that the United Kingdom is the third largest customer for exports from Spain. So, we have ties of all kinds. There are hundreds of thousands of British people who live in Spain.

We believe that it is good for the United Kingdom to be united with us. That is not an opinion by the President of the Government of Spain, who, moreover, is the acting President of the Government, but rather that is an opinion shared by all the people of Spain. We want the British people, 15 million of whom visit Spain each year, to remain in the European Union. We believe that this is good for them and also for us. That is what we have said through the effort we have made yesterday and today. "Stay here, however you may stay, but stay here".

What might happen? Bad news. Bad news if, in the end, this does not happen. I believe that the European Union is one of the most important political operations ever undertaken throughout the world, since I don't know when. Just think about a single market of more than 500 million people, think about a single currency or think about what the free movement of goods, capital and labour means. This is a very important operation. It would greatly harm Europe, and I believe it would also greatly harm the United Kingdom, and that is why we have all made an effort. Today brought together a large number of Prime Ministers and Heads of State of a great many countries in the EU, who have all made an effort with the sole aim of saying to the British people that "we want to stay together".

Q.- I don't know whether what you have said to us about you calling Pedro Sánchez in the event that he does not win the vote of confidence means that you would accept, let's say, the commission of the Head of State to try to form a government and undergo a vote of confidence?

President of the Government.-I will accept- if it happens, of course - the commission, provided that I can win the vote of confidence. The investiture debate has one goal: that whoever stands there is certain that he will be invested in office.

I didn't attend a vote of confidence because it was impossible for me to win it and everyone knows that, everyone, including those who criticised me for not standing knowing full well that I would lose it. That's life.

If I believe that I have a chance of winning the vote of confidence - I don't nominate the candidate - I will stand; but, as you are well aware, if the PSOE does not want this, then it is not possible in my case. But, if the PSOE does not manage to get in, I will have to say to the Socialist Party that "You have stood but couldn't win. There is an alternative and it depends on you". But those are 24 hours away and until now I haven't had the chance to speak with Mr Sánchez on this issue quite simply because Mr Sánchez has said that he won't speak with us. But, as you are fully aware, things can be rectified in life.

Q.- We have seen you eating pizza and we have also seen you going for a stroll, because the day was dragging on. I was wondering if you had the feeling that this might be your last European Council meeting as President of the Government.

President of the Government.- You have been watching closely. I don't think so. I have the feeling that I still have a few European Council meetings ahead of me, although it is true that if I am called for a meeting at 10 am I would prefer the meeting not to start some 11 hours later, mainly because, like everyone else, we don't like to be kept waiting for 11 hours. You wouldn't like that, would you? Nor do I.

Thank you very much.