Mariano Rajoy announces extra seven billion euros for regional governments in 2016

Club Antares, Seville

The President of the Government, Mariano Rajoy, gave a conference at the Club Antares de Sevilla for an event organised by the Chamber of Commerce during which he said that we must continue down "the path we are on" because "we are heading in the right direction". After acknowledging that there is still a long way to go, he stressed that the structural reforms and tax reductions must continue if revenue so allows.

Furthermore, Mariano Rajoy said that "expenditure containment policies should be maintained". In this regard, he announced that "the public deficit must be brought below 3%" next year. Mariano Rajoy also confirmed that the General State Budget for 2016 will be approved on 31 July given that "the goal is to comply with the law, offer security, maintain normality and ensure stability", because that is good for the economy.

The President of the Government expressed optimism by saying "for the first time Spain has a promising future ahead". However, he went on to add that "no future is written", so "we cannot surrender ourselves to those whose radicalism and complicities question what is the best guarantee of our success - harmony and unity among Spaniards and the path of progress embodied by constitutional Spain".

Strong growth in the Spanish economy forecast for 2015 and 2016

Pool MoncloaAccording to the President of the Government, the regional governments will receive an additional seven billion euros and this will have a knock-on effect on public services. Specifically, Andalusia will receive an additional 1.7 billion euros. He also announced that the regional financing issue will be discussed in 2016, a topic that has not been possible to tackle thus far due to more pressing priorities.

Mariano Rajoy stressed that there will be "significant growth" in the Spanish economy in 2015 and that the growth will continue into 2016. As regards employment, he explained that 600,000 jobs will be created although the ultimate goal remains at 20 million people in work. To reach that figure, he added, 500,000 jobs will need to be created during every year of the next legislature. "That is the key and what measures the success of a country and what is enabling us to tackle all the other problems", he said.

According to the President of the Government, private investment, domestic consumption and exports will continue to increase. Inflation will be negative in 2015 but that trend will change in 2016.

Catalonia and Greece, potential problems

Mariano Rajoy said that three potential problems can be seen on the horizon. Firstly, Catalonia because "what's happening there is not helping". He insisted that his strategy continues to be one of defending the unity of Spain, national sovereignty, equality among Spaniards, solidarity, liberty and fundamental rights. In other words, "the fundamental core of the Spanish Constitution", he explained. He added that, "in Catalonia, the law will be followed and if anyone wants to follow a different path, they should know that we will not allow it".

Secondly, the President of the Government said that "certain messages are not good for Spain" because they merely serve to generate doubt. For example, it is "foolish" to say that certain reforms will be undone. In this regard, he warned that "nothing is built by changing everything".

Greece is the third problem that could arise for Spain, although Mariano Rajoy stressed he is less concerned now. He recalled that the new bailout programme for Greece will be debated in the Lower House of Parliament. According to the President of the Government, the EU is committed to maintaining its support for Greece although he stressed that membership of a club brings with it certain rights and obligations. He also reiterated that the Greek economy was growing at the start of 2015 and that the current negative growth is the result of "some brain waves from certain people".

"More people are now in work in Spain than when we came to power"

Pool MoncloaMariano Rajoy described the first years following his appointment as President of the Government and the developments leading up to the first half of 2014. He explained that Spain was experiencing a perfect storm caused by a deep recession, three million people losing their jobs, large imbalances in the Spanish economy and financing problems.

Mariano Rajoy stressed that the goal was to clamp down on the threat of bankruptcy and a bailout, and work towards starting to grow and create jobs. Hence, the imbalances began to be corrected through fiscal consolidation and structural reforms (some of them far-reaching, such as the labour reform, the energy reform, the budget stability reform, the pension reform, etc.). The main imbalances were corrected between 2012 and 2013, with the Spanish economy starting to grow slightly at the end of 2013.

The President of the Government stressed that "we are clearly better off" today: the correction of imbalances continues, the deficit reduction is being maintained, inflation is under control (with the corresponding increase in competitiveness while many people maintain the same purchasing power), exports remain at record levels and access to credit has been recovered (both for SMEs and for households and consumption).

Right now "we are growing faster than anybody in Europe and faster than the major economies", said Mariano Rajoy. Unemployment is falling at a pace of 7.4%, while affiliation to the Social Security system is growing by 3.4%. "More people are now in work in Spain than when we came to power. More people are now affiliated with the Social Security system in Spain than when we came to power", he said. Finally, he insisted that job creation must continue to be the objective for this legislature.