​Speech by President of the Government at plenary session of Lower House of Parliament to report on Conclusions from European Council on 19 and 20 March 2015

Madrid

Mr Speaker, Honourable Members,

The plenary session to be held in this House on 25 March at which I intended to report to the Honourable Members on the progress made at the European Council held on 19 and 20 March was suspended. The reason for this was the tragedy that befell the Germanwings flight from Barcelona to Düsseldorf the previous day, resulting in the loss of 150 lives. I wish to take this opportunity to reiterate my deepest sympathies and solidarity with the families and friends of the victims.

This terrible event took place in the French Alps and the victims were principally Europeans, mainly Germans and Spaniards. It is worthy of mention that on such a difficult and sad occasion as this, gestures of unity and solidarity among Europeans have blossomed, thus highlighting what Europe represents in its essence; it is, above all, a community of values and affection: on the one hand, through the exceptional efforts of the French Government and authorities in the tasks of locating and recovering the mortal remains, and the extraordinary generosity of the people who live in the area affected, in welcoming and consoling the relatives of the victims; and on the other hand, the close cooperation and collaboration which, from the outset, have prevailed between the governments of the hardest hit countries. I can assure you that at that time, when I was at the disaster site with the President of the French Republic, François Hollande, and the Chancellor of the Federal Republic, Angela Merkel, I could clearly feel the strength of this collaboration.

Honourable Members,

My speech in this House on 25 March was going to take place barely a week after the savage attack perpetrated in Tunisia, which took the lives of 21 people, two of them Spanish citizens, and to whose families I wish to convey, once again, my full support. Honourable Members, I wish to express a conviction to you: the people of Europe will remain united and stand firm against those who seek to attack our democracy and our liberty.

One of the five priorities of the Strategic Agenda of the European Union adopted by the European Council last June is precisely a "Union of liberty, security and justice". With full respect for fundamental rights and the rule of law, for European values as a whole and taking into account the cross-border dimension of international terrorism, particularly Jihadi terrorism, solid cooperation at an EU level is essential. The threat of terrorism remains imminent, as shown by this cowardly attack.

On 24 February, I had the opportunity to report to this House on the decisions taken by the European Union on the occasion of the attacks on 7 January in Paris. Although the essence was contained in the Declaration from the informal meeting of the Heads of State and Government of the European Union held in Brussels on 12 February, certain important steps have subsequently been taken which I would like to report on in this House today.

The Member States are making progress, a good example of which is that in Spain the law enforcement agencies are carrying out vital work to prevent and persecute Jihadi terrorism. This can be seen in the operation carried out on 13 March by the National Police Force resulting in the arrest of eight individuals that formed a Jihadi propaganda cell associated with the terrorist group Islamic state (DAESH). This was the first police operation to disband a Jihadi group of this nature in Spain. Subsequently, just last week, the police force of the Autonomous Region of Catalonia arrested 11 individuals accused of forming part of another cell associated with DAESH. The substantiated intention of these people was to perpetrate a terrorist attack in Barcelona. I wish to express my congratulations on these two operations, both to those in charge and to the officers that successfully carried them out.

Finally, I would remind you that the day before yesterday a ministerial meeting was held in Barcelona with the Mediterranean partners of the European Union to undertake a revision of the European Neighbourhood Policy, upon a proposal from Spain, which included a debate between the European Union and its Mediterranean partners on how to better tackle and combat terrorism. I repeat, this is one of the common threats to both shores of the Mediterranean.

Honourable Members,

I will now move on to take stock of the European Council held in Brussels on 19 and 20 March. This was the first ordinary European Council of the Latvia Rotating Presidency of the Council, following the informal meeting of the Heads of State and Government held on 12 February.

The European Union has ventured down a new path characterised by economic recovery, overcoming the Euro crisis, progress on Economic and Monetary Union - now strengthened thanks to Banking Union - and a new political cycle following elections to the European Parliament last May and the appointment of a new European Commission in November.

Year-on-year growth of the Eurozone economy in the fourth quarter of 2014 stood at 0.9% and 1.2% for the EU as a whole. This reached 2% in Spain, as the Honourable Members are aware.

As regards employment, and also with figures from the fourth quarter of 2014, year-on-year growth stood at 0.9% in the Eurozone and 1% in the EU as a whole. In Spain, as the Honourable Members are aware, this stood at 2.4%. What is true is that the Eurozone is maintaining its recovery and, for the first time since 2007, the economies of all Member States are expected to grow in 2015. Moreover, at the end of the month of March, the Organisation for Economic Co-operation and Development (OECD) raised its growth forecasts for the Eurozone to 1.4% for this year and 2% for 2016.

In another scheme of things, the European Union has created stability for the coming years. Following the European elections in 2014, a coalition has been created in the European Parliament between the people's parties, the socialists and the liberals; the investiture of the College of Commissioners and the election of Donald Tusk as President of the European Council have taken place in both time and form, and the role of the European Commission has been strengthened given that Jean-Claude Juncker was indirectly elected by the citizens of Europe as President of the Commission as the most-voted candidate on the list from among those that were presented by the European political parties. Moreover, the Commission is tied to the European Council by the five priorities on the Strategic Agenda of the EU approved in June 2014, as I mentioned before.

Honourable Members,

The debate at the latest European Council was precisely framed at achieving the objectives of this Strategic Agenda. The conclusions are contained in three sections:

• Energy Union;
• Growth and employment, and the European Semester;
• Foreign relations.

Energy Union is one of the five priority areas contained in the EU's Strategic Agenda. It was adopted by the European Council in June 2014 and also appears among the ten priorities on the agenda that the President of the European Commission, Jean-Claude Juncker, presented in his investiture speech to the European Parliament. This is an important milestone in European integration and, let it be said, a major success for Spain.

Energy Union seeks to provide the European Union with a safe, sustainable and competitive European energy system. One of its essential elements is achieving a genuine internal energy market that works and is fully interconnected. To date, and despite the efforts that have been made to harmonise regulations at a European level, the EU still has highly fragmented energy markets.

This, as I have said on many occasions, is particularly serious for our country. Spain is, in fact, excluded from the Internal Energy Market; our electricity interconnections with the rest of the European Union stand at around 4% and, with France, our gateway to the internal market, this only stands at 2.7%, once the line opened by Prime Minister Valls and myself on 20 February becomes fully operational in June.

This isolation has very significant tangible effects for individuals and companies that have to face higher energy costs: individuals also have to make greater efforts to pay their electricity bills and companies see their production costs rise with the corresponding loss of competitiveness, and hence, of capacity to grow and create jobs.

This also means that the use of renewable energies in Spain is more expensive and more difficult. The problem with renewable energies, Honourable Members, is that they are volatile, in other words, a day with little sun or little wind means little production. Hence, greater interconnections help reduce this volatility.

That is why since I took on the Presidency of the Government I have made a huge effort to correct this situation at a European level. Exactly 13 years ago, at the European Council in Barcelona in June 2002, a minimum target of electricity interconnections of 10% of installed production capacity was set. Progress since then has been scarce and over the last three years Spain has persevered in its efforts to make this target a reality and we have made some significant progress at the most recent European Council meetings.

Firstly, we once again placed the problem of Spain's energy isolation at the heart of the European debate. As you are aware, at the European Council in May 2013, which discussed the issue of energy, interconnections were once again set as a target and the need to complete the internal market in this area was reiterated. That Council considered more decisive action to be a priority to meet the minimal electricity interconnection target of 10% and, within the framework of the Projects of Common Interest of the Trans-European Networks, specific measures and projects were again asked for with the backing of Europe.

Secondly, in 2014, we managed to ensure that interconnections were a noteworthy element within the new Energy and Climate Framework 2020-2030. Hence, the European Council in October 2014 was decisive. This Council agreed to the framework of action for the European Union on the issue of climate and energy until 2030, with interconnections playing a leading role:

• For the first time, the lack of interconnections was acknowledged as a European problem which hence required European solutions.
• The link between interconnections and renewable energies was also acknowledged.
• Accordingly, the European Commission undertook to take urgent measures to promote specific projects, including financial support for these projects using European funds.

Finally, the European Council I am reporting on here today in this House has resulted in a further boost both for Energy Union and for interconnections. The Commission has approved three Communications:

• "A Framework Strategy for an Energy Union"
• "Achieving the electricity interconnection target of 10%. Preparation of the 2020 European electricity grid"
• "The Paris Protocol, a master plan for combating climate change beyond 2020".

In the first communication, the "Framework Strategy", the Commission sets the following five priority cornerstones on which Energy Union must be based:

• energy security, solidarity and confidence;
• a fully integrated internal energy market;
• energy efficiency as a contribution to moderating demand;
• "de-carbonising" the economy;
• research, innovation and competitiveness.

The areas of energy efficiency and "de-carbonisation" are particularly important and measures have been taken at a national level such as the implementation of the National Energy Efficiency Fund and the renewal of vehicle fleets under such programmes at the PIVE Plan, PIMA Air and PIMA Transport.

As is clear, we also share the objective of energy diversification and security.

As regards research and development, we would like to have seen more emphasis on this aspect in the strategy because we feel that the Energy Union should be a driver of growth and job creation.

For their part, interconnections are not only acknowledged as an essential element of Energy Union, but rather the Commission has published, as I mentioned, a specific communication on this issue. In this communication, the Commission grants interconnections a political priority status. In order to increase interconnections to the 10% required, the European energy infrastructure plan for the next few years will be revised. Key projects will include support from European funds.

Spain will be the main beneficiary from this measure since it is the country that is furthest away from meeting this target of 10%. In fact, steps have already been taken in this direction and there is a good chance that new interconnection projects through the Pyrenees between Spain and France will shortly be included among the European priority projects. Indeed, the European infrastructure coordination body (ENTSO-E) has expressed its intention of doing so this very year.

Furthermore, the Conclusions highlight the Madrid Declaration of 4 March, signed by the President of the French Republic, the President of the European Commission and the Heads of Government of Portugal and Spain. I would like to underline that the Madrid Declaration is a key step forward in putting an end to the isolation of the Iberian Peninsula from the Internal Energy Market. The declaration establishes an action plan and identifies a series of electricity and gas interconnection projects that must be initiated and developed as soon as possible, making use of the fast-track procedures authorised under the Regulation of Trans-European Energy Networks.

Honourable Members,

I will now move on to the second part of the Council's Conclusions that concern us here today. The second part relates to growth and employment, and to the European semester. Driving job creation, growth, competitiveness and investment are all priorities, both of the EU's Strategic Agenda and of the agenda of the new Commission.

Firstly, the European Council analysed the economic situation in Europe and the application of the structural reforms undertaken by the Member States.

In the case of Spain, the winter forecasts made by the European Commission are for GDP growth of 2.3% in 2015 and of 2.5% in 2016. According to the Commission, this positive trend is mainly down to improving domestic demand which has been helped, in turn, by an improved job market, more affordable finance conditions, greater confidence and a fall in energy prices.

The Commission also considers that in the coming months the pace of job creation will be further increased in Spain and that unemployment will fall to 20.7% in 2016, 6% less than in 2013. In Spain, the latest unemployment figures for March were once again very positive. The decline in recorded unemployment of 60,214 people has converted this month of March into the best for 13 years. Unemployment is falling at a year-on-year rate of 7.2% and employment is growing at the fastest rate in the last 15 years. Remember that in March the number of National Insurance contributors rose by 160,579, which represents almost 540,000 more contributors than a year ago.

Honourable Members,

Behind the stark reality of these figures lies the real evidence of concern to us; that of these people with their families, their life projects and their wishes, which they will now have the opportunity to fulfil.

As regards the public deficit, we are in line to meet the target of 4.2% in 2015 and in 2016 we may meet the target for compliance set out in the Stability and Growth Pact.

Increased confidence in the Spanish economy, as also acknowledged in the report from the Commission, has made it possible for the price that Spain must pay to receive finance from the financial markets to continue falling, to the extent that, for the first time in Spain's history, in the auction of six-month Treasury Bills on 7 April, the interest rate was negative, at -0.002%; in other words investors must pay to lend money to Spain. And these are not merely numbers; obtaining better financing conditions means, in practice, that cheaper financing can be obtained for small- and medium-sized enterprises and loans for those that wish to start a business or enlarge an existing business; in other words, that they can fulfil their initiatives and projects.

Honourable Members,

I would also like to mention the results of the studies within the framework of the procedure for macro-economic imbalances published by the European Commission. The study considers that there are no longer excessive imbalances in Spain and that the risks deriving therefrom are less than last year thanks to the growth of the Spanish economy. Whilst it is true that certain imbalances remain, such as the unemployment rate and the high level of debt, the study adds that during the course of 2014, significant progress has been made in applying the specific recommendations made by the Commission in the past.

Honourable Members of Parliament,

I can only welcome the fact that the European Council has substantiated the positive trend in Spain and that it has ratified the economic strategy that our government has been advocating in Europe since the start of 2012. Five ideas:

• Fiscal consolidation.
• Reforms at a national level.
• Reforms at an EU level
• Progress on the Economic and Monetary Union
• Stabilisation of the financial markets.

This change in trend is undoubtedly noteworthy and that has been reflected in these reports, but we are aware that there is still a lot to do, both in Spain and in the European Union as a whole. In our case, the government, as this House is well aware, and as indeed is the norm, will shortly submit our National Reform Plan and Stability Programme to Brussels, which we will approve on 30 April.

In another scheme of things, at a European level, and in relation to the area of driving investment, the EU is finalising the design of the Juncker Investment Plan, and in its Conclusions, the European Council welcomed the agreement reached at the ECOFIN Council on 10 March on the Regulation of the European Strategic Investment Fund, which is one of the key elements of the Juncker Plan.

Under this plan, as you are also aware, European funds will be used to grant guarantees that make both the financing of major infrastructure projects and SME initiatives cheaper. The ultimate aim is to mobilise some 315 billion euros. The Government of Spain will take part, by means of the Official Credit Institute, by supporting those projects that are approved in our country.

Honourable Members,

The European Council has once again insisted on the importance of swiftly concluding the agreement on the Transatlantic Trade and Investment Partnership (TTIP) between the European Union and the United States for growth, job creation and investment in Europe. Both parties must make the maximum effort to reach an ambitious global agreement by the end of the year.

Spain is working to ensure that the treaty can be concluded in an ambitious and balanced way, highlighting the shared vision and joint commitment of Europeans and Americans. Spain believes that the treaty, whilst respecting European values and regulations, must contribute to the development of an integrated transatlantic marketplace for the benefit of European consumers, users and companies, and also guarantee the role of the European Union in the global trade system.

To that end, I took part, together with other partners, in two specific meetings to help push through this agreement: one, within the framework of the G-20 Summit in Australia, and the other, during last year's European Council.

To date transatlantic relations have provided the structural backbone of the world economy: the European Union and the United States represent approximately 47% of global GDP and more than one third of the world's trade flows. Moreover, these transatlantic relations are already strengthening since the European Union is the leading trading partner of the United States (17% of its total trade in 2013) as is the latter for the European Union (with 14.2% of its total trade).

The potential for growth is enormous, since there is no precursor to two economies of this size negotiating for trade and investment liberalisation and such ambitious regulatory convergence.

Moving on, I would like to close by informing you, Honourable Members, of the third part of the Conclusions in relation to foreign affairs, on which four issues were tackled: the European Neighbourhood Policy; the Eastern Partnership Summit to be held in Riga in May; the crisis in Ukraine and relations with Russia; and the situation in Libya.

I would like to highlight the importance of the European Neighbourhood Policy in its Mediterranean dimension. Spain has been insisting on the need to pay greater political attention to the EU's Mediterranean neighbours. To that end, Spain has requested, and this has been achieved, that the Conclusions of the European Council include a reference to the following issues:

• The need for the present revision of the European Neighbourhood Policy to guarantee an on-going and far-reaching commitment from the European Union to its eastern and southern partners.
• For the European Council in October to include a debate on our neighbouring southern countries.
• To hold an informal meeting of the EU in Barcelona, on 13 April with our Mediterranean neighbours, which the European Council expressly backed.

This meeting which, as you are aware, was held in Barcelona last Monday, allowed our Mediterranean partners to express their points of view on the European Neighbourhood Policy, provide this policy with greater visibility in terms of its Mediterranean dimension and tackle questions and challenges of common interest, as I pointed out at the very start.

In relation to the Eastern Partnership Summit to be held in Riga on 21 and 22 May, the European Council sought to underline its support for the EU's six eastern neighbours (Ukraine, Moldavia, Belarus, Georgia, Azerbaijan and Armenia) and the need to develop cooperation with these countries. The Conclusions stress the "principle of differentiation" according to the aspirations of each one of them, and highlight the importance of areas such as State consolidation, mobility and contacts between citizens, market opportunities and interconnections.

Secondly, and in regard to the situation in Ukraine and relations with Russia, the European Council once again stressed that the priority at this time is for the parties to the conflict to quickly and fully apply the Minsk Agreements and meet their respective commitments. To this end, the European Council expressed the EU's intention to support this process, particularly as regards the capacity and resources of the Organization for Security and Co-operation in Europe (OSCE) to oversee and verify the application of the Minsk agreements. The paragraph of the Conclusions relating to sanctions against the Russian Federation underlines the need for the duration of these measures to be linked to the degree and pace of compliance with the aforesaid Minsk Agreements.

For Spain, maintaining a united position of the European Union is essential. It is necessary for Russia to make a greater commitment to ensuring a peaceful and negotiated solution to the crisis. And we must not forget that, if Russia is part of the problem, it must also be part of the solution.

The Conclusions contain the European Union's support for the reform process in Ukraine and convey to the Ukrainian Government the need to continue pushing through political and economic reforms that help improve the well-being of its citizens. These were the same messages that I passed on to the Ukrainian Prime Minister, Arseniy Yatsenyuk, at the meeting we held prior to the start of the European Council.

Finally, and in relation to Libya, the European Council considers that the most important aspect at this time is to reach an immediate and unconditional ceasefire, and for the different parties to reach an agreement to form a national unity government. The European Council reiterates its support for the work of the United Nations and praises the work of the Special Representative of the United Nations Secretary General, Bernardino León. It also mentions the link between the crisis in Libya and immigration, and the tragedy of the loss of life at sea. In that regard, it calls for the application of the measures agreed by the Council in October 2014 to better manage migratory flows to be stepped up and to welcome the initiative of the European Commission to present a European Programme on Migration in May.

I will finish now, Honourable Members,

By way of taking stock, I believe that the European Council of 19 and 20 March has been fruitful, firstly, because it shows the European Union's ability to focus its efforts and make progress on issues that are part of its strategic priorities.

In this new European political cycle that commenced on 1 November, the EU is working to re-establish the confidence of European citizens and focus its policies on the main challenges facing our economies and our societies.

It is appropriate for the EU's agenda to focus on those areas in which the EU can play a truly decisive role. As President Juncker pointed out in his investiture speech, the European Union must be great and ambitious in the major issues, and small and modest in the minor issues. It seems to me that the initiatives of this European Council in areas such as Energy Union, growth, investment, employment, the crisis in Ukraine and the European Neighbourhood Policy all point in the right direction.

This European Council has made something clear that I have always considered to be fundamental when tackling our country's European policy. This is that Spain manages to ensure that its national objectives become European priorities and that realising these objectives is made possible through the European Union. The progress made at this European Council on Energy Union is a fine example of this.

I also want to especially highlight what has been achieved at an EU level in terms of taxation. Prior to the European Council meeting in December, I wrote to the President of the Council, Donald Tusk, proposing the need to ensure that taxation should continue to play a central role at the meetings of the European Council and explaining to him the targets that should be met. Some days later, the European Council welcomed the Commission's intention to present a proposal on the automatic exchange of information within the EU on the matter of tax treaties. In March, the Commission also adopted a legislative proposal designed to ensure greater cooperation between Member States in relation to cross-border tax treaties through the automatic exchange of information.

Hence, my satisfaction at the results achieved at this Council and the course taken by the European Union over the last few months.

Honourable Members,

Every time I report to this House on the European Council meetings, I place special emphasis on something I will mention now, which is that the integration process is moving forward. Perhaps not with the speed some of us would like, but it is making progress, and this, for those of us who believe that a more integrated Europe socially, economically and politically-speaking will be much better for our fellow citizens, only serves to heighten our expectations for the future.

Honourable Members of Parliament, that is all; thank you very much.