Speech and subsequent Q&A session with the President of the Government at the ABC Forum

Madrid

Mr Speaker of the Lower House of Parliament, Madam President of the Regional Government of Madrid, Madam Vice-President of the Government, Ministers, public officials, Madam Chairwoman of ABC, Mr Chairman of Vocento, Mr Chairman of Deloitte, Mr Managing Director of Ferrovial, ladies and gentlemen, friends,

I would like to start by expressing my gratitude to the daily paper ABC and Deloitte for inviting me to take part in this forum, which, as already stated today, has consolidated its position as an essential space for reflection, analysis and suggestions about our country and its future.

I thank ABC for its invitation and all of you for coming. In return, I will try to respond to your kindness with an equally generous use of your time; in other words, by giving a speech first of all, which I hope will be brief because, among other reasons, I am sure that Mr Ángel Expósito during the subsequent Q&A session will be sure to delve deeper into what I am about to say now and, no doubt, what I do not say in this speech.

Ladies and gentlemen,

As you are aware - because it has been said loud and clear here and because it is an important piece of news, the ratings agency Standard and Poor's improved its rating for Spain on Friday. This is very important because it reflects an improvement in the confidence placed in Spain overseas. However, it is no less true to say that our sovereign debt had already been performing problem-free in the international markets for some time. In fact, it is being placed at historically low interest rates and even, in some areas, at negative interest rates.

There is no question that the upward revision of the rating from this agency is good news. It recognises the structural change that has taken place in Spain during this legislature. The ratings agencies, which were accused of dark dealings and conspiring against Spain a few years ago, are today certifying the growing strength of the Spanish economy. I will save you the comments full of praise for the reforms undertaken by this government and all the other statements included in their diagnosis because I am more interested in underlining what is most important: that Standard and Poor's has drawn out a scenario, an outlook for Spain - an outlook that was entirely unimaginable a few months ago.

The agency says, no more and no less, that Spain can grow at a rate of 4% nominal GDP in the next four years. Among other things, this means stability - stability that will help us keep improving our public accounts. There is no question that doing so is a very important challenge for the future of Spain.

Ladies and gentlemen,

Who in their right mind could have imagined this three years ago? How many of us here today would have made a bet on this rate of growth in the Spanish economy? Is there anyone here who would have dared forecast three years ago that Spain could create half of all the new jobs being created Europe-wide, as is the case right now?

You will agree with me that not even the most enthusiastic among the few optimists to be found in Spain three years ago would have said that today we would be the fast-growing major economy in the Eurozone and the one creating the most jobs. That is the truth. None of us would have taken that bet.

We can all remember what a short time ago all that was: we were the weak man of Europe; the financial pages of all the newspapers seemed more like a horror series; the international press was full of wordplay and images talking about the "pain in Spain"; and we waited to see what the risk premium would do as if our lives depended on it. And the truth is that our lives were depending on it: the life of our public finances, the survival of so many companies, thousands of jobs and, to a great extent, even our social model.

So, from the tranquillity offered by the current situation, we can agree that the situation we have left behind was not the product of bad luck or the efforts of external enemies, the ratings agencies or the international press. We now know that it was the fruit of our problems; it was the final consequence of bad politics; of frivolity, disorder, self-complacency and laziness when it came to implementing the reforms that Spain needed.

Spain was a country that had become expensive; it was costly to sell overseas, it was importing a great deal and that led us into over-indebtedness. We were in a recession, jobs were being lost and tax revenue was entirely insufficient to cover the public services being provided - we lost 70 billion euros in two years. In short, we had entered a downward spiral that led to a complete loss of credibility in Spain in the international arena.

Faced with this situation, there were some who said we had but two choices: leave the Euro or ask Europe to bail out our economy. There were many who said that, many who would have thrown in the towel and stopped trusting in Spain. Because, ladies and gentlemen, that is what a bail-out meant: confirming the failure of our country and condemning our citizens to years of hardship and impoverishment, not to mention the absolute abandonment of our economic sovereignty and losing our right to decide our own destiny. There are various not too distant examples I could mention.

However, with an effort from us all, we were able to ward off that threat. We chose the path of effort, of responsibility; the way of strength and reforms. I will save you from having to hear the list of each and every reform we have undertaken over these last few years; but I think I am in a position to say - without being mistaken - that this government, which was accused by so many of being ultraconservative, has undertaken the most extensive reform plan in the recent history of Spain. Among other things, we have reformed the labour market, the financial system, budget stability, pensions, energy, the public administration services, market unity, transparency, education, training, etc. Almost no aspect of our productive structure remained outside the scope of this extensive reform plan. And we must continue this work. This is not enough.

So, today, with all the shortcomings that people might mention, which I'm sure exist, I believe it is obvious that Spain has not only avoided bankruptcy during this legislature but that we have also implemented - and this is very important - an ambitious and comprehensive competitiveness plan that has transformed our economy for the better and enabled us, for the first time, to embark upon an economic cycle of growth without devaluing our currency. I repeat, for the first time.

We now have 30% more export companies; and this is also very important - we have gone from exporting less than one quarter of our GDP to one third. This has never been achieved before.

Also for the first time ever, we are growing without detriment to our foreign trade sector. For the first time, foreign and domestic demand are moving in the same direction and boosting growth.

We now have prices under control and, also for the first time, we have seen 25 consecutive months with inflation below that of Germany and our partners in the Euro. This is allowing us to be more competitive and, at the same time, increase our purchasing power.

Ladies and gentlemen,

This is the great change we have seen in Spain, these are the new things taking place in our country, the things convincing us that the cycle we have just begun will be a long one if we do not make the same mistakes, because the factors that were previously destroying the economy, our former weaknesses, are no longer present. That is why Standard and Poor's has drawn up the outlook I referred to at the start of this speech.

Ladies and gentlemen,

The Government of Spain foresees GDP growth in 2015 of 3.3%, and 3% for 2016. If these forecasts are correct, Spain will have returned to its highest ever Gross Domestic Product figures towards the end of 2016. This year, Spain will be the major Euro economy to post the best growth, with a marked difference over the rest. For the following years, leading up to 2018, the Spanish economy will be in a condition to maintain this rate of growth.

If the same course is followed during the next legislature, the Spanish economy will be able to grow while reducing public debt; something that is very necessary. As from 2016, the public deficit will stand below the 3% of GDP included in the Maastricht criteria. In fact, as from next year, there would be a primary surplus; in other words, after removing debt interest from the equation, public revenue would exceed spending.

The Spanish economy will be able to grow if the right steps are taken and common sense is used, with moderate inflation. It has always been the case in the past that growth was accompanied by very high consumer price increases, far higher than those of our European partners. This meant that purchasing power did not rise very much and that Spanish products were increasingly more expensive when compared with those in other Euro countries; in other words, we lost competitiveness. The opposite is the case today; the Spanish economy is growing faster than our European partners but our prices are falling when compared with the Eurozone average. And the goal, which is not easy by the way, is to maintain this situation.

The Spanish economy is growing without our foreign trade debt growing. As you are aware, Spain has traditionally been an economy that grew at the cost of asking for money from overseas. However, our increased competitiveness means that Spain can maintain a foreign trade surplus to at least 2018 and, far from indebting ourselves further, will gradually reduce foreign debt. If the forecasts are true, Spain will have never before had a foreign trade surplus for such a long time.

In short, these forecasts reflect a complete change of model: the Spanish economy is growing now because it produces and exports, not because it is going into debt to buy what others produce. As a result of all that - and this is what matters to us all - jobs are being created at an unprecedented pace: over half a million jobs will be created in 2015, a pace that can, should and must be maintained in the years ahead. Over the next four years, Spain could go back to having 20 million people in work as it did before the crisis. That is my goal and I will focus all my efforts on achieving this, and I also think it is the most important goal for the next four years.

Ladies and gentlemen,

Whenever elections are on the horizon, a classic ploy in politics tends to always be used; and that is when the various parties standing for election talk about change and promise change; a change of government, of course. Funnily enough, nobody talks about changing the country, about the change that Spain has experienced under the Partido Popular:

- It is the change that has started to create jobs, even though yet more still need to be created, jobs for many Spaniards. There are over one million more people paying in to the Social Security system today than in January last year. We want many more Spaniards to be able to work and join those paying in to the Social Security system.

- It is the change that has returned credit to so many small entrepreneurs and that has given pensioners peace of mind. This was one of the most difficult challenges we have faced in this legislature - returning credit to where it is needed: mortgage credit, credit for SMEs and credit for large companies.

- It is also the change that has given peace of mind to pensioners, through the pension reform, and that has enabled so many companies to clearly improve their income statements; no doubt because of their talent, effort and vision but also because of various decisions that needed to be taken.

- In short, it is the change that, as I said at the start of my speech, has returned confidence in Spain.

In this regard, if you will allow me, I would like to make an almost personal comment because politicians are also people, even though there are some who don't believe that.

For a politician, at least for me - and I have dedicated myself to politics for almost half my life, there is no greater personal satisfaction than to have been handed a depressed country on the verge of bankruptcy and to be able, at the end of a term in office, return a country that is growing and in a position to begin a long period of prosperity because, and this is what matters most: we are indeed in a position to begin a long period of prosperity. This is what gives meaning to a life in politics. And I believe that I do not only speak for myself but for all the men and women in my party who have worked together on these efforts and to whom I am enormously grateful.

Naturally, this is not a personal victory, nor a party victory. A task of this magnitude requires enormous effort, for which we will be forever grateful to the entire nation of Spain. All of Spanish society has risen to the challenge we had to make; everyone has given the best of themselves: their hard work, their commitment and also their solidarity, because we would not have been able to do it had we not done it together. And now the time has come to reap the rewards of so much effort and I assure you that the rewards will be much greater if we do not falter now.

I would like there to be more space given over to this recognition in public debate, which is not for the government but for the country as a whole. Spain, ladies and gentlemen, has done something extraordinary in these last few years; I repeat, something extraordinary. It is not the first time either, because Spanish society is one of the great success stories of global history and I was always sure of that capacity in our society. I think we should all be proud of what we have achieved together. I, for one, will never stop feeling that pride, talking about it or being grateful for it.

But, let us look to the future now, which is what matters most to those of us here.

The people of Spain will vote again soon and will do so in a very different atmosphere; not because it will be close to Christmas but because we are no longer in a country that is crumbling as it was in 2011 but rather in a country that stands proud and is focused on moving forward.

I am fully aware of how important these elections are. The decision will either help our budding recovery strengthen and consolidate itself or send us back to a time of baseless ideas and frivolity. We can either achieve continued progress or risk backsliding; growing or going back to what we left behind us.

To be completely frank and absolutely humble, I see no other political group in politics today, from what I hear, that is capable of successfully meeting this challenge. To be completely frank and, I repeat, absolutely humble.

A few years ago - five years, as we have been reminded here - at an ABC Forum like this one, I said that the DNA of the Partido Popular was based on budgetary discipline, which must be maintained, a drive for reform, security and foreseeability. With that DNA, we have tackled the challenges facing Spanish society at every turn, whether that was the threat of bankruptcy, the fight against unemployment, the migration crisis - another of the great challenges that must not be treated lightly, that Spain and Europe will tackle over the next few years - and, another very important challenge, the illegal challenge of independence.

As regards the latter, and I will now draw to a close, allow me to say just a few short words:

- As long as I am President of the Government, I will always ensure that the law is upheld and do so as I have always done until now: with a sense of duty and responsibility, but also with a sense of proportionality and prudence.

- I have always been willing to talk and always will be, but I am not willing to tear up our national sovereignty or do away with the rights and equality of all the Spanish people.

- I will work to heal the wounds in Catalan society without wasting any time in trying to satisfy those whose only goal is disloyalty and disobedience regarding the laws that we have enacted together.

- In short, you will find me to be a loyal collaborator with no demands or impositions from a position of disloyalty, none whatsoever.

I am coming to the end.

The Partido Popular - at least, this is what I think - is the great party of the Spanish middle classes, and not by chance. It is that because, when we govern, society creates jobs and, as soon as possible, taxes are lowered; because we seek what unites Spaniards and not what pits them against one another; because we are guided by moderation and not dogmatism. We have demonstrated ourselves to be effective in government, prudent and responsible. We are a great party that responds to one single interest, as it should be: the general interest of all.

We have clearly won the two elections of a national scope that were held in Spain during this legislature, the European and the municipal elections, under the worst possible circumstances; there was no worse situation we could have been in. With that support and the work undertaken over the last few years, we return to the polls on 20 December to offer a project for the future to the people of Spain:

- A Spain that will remain a united Spain, where everyone enjoys the same rights.

- We will tell them that we will work for a more cohesive Spain, with sustainable and well-financed public services that also help guarantee equality among Spaniards.

- We are going to fight for training, an issue of vital importance. I refer to young people and the education system, which has already begun to improve; but I also refer to those people who need to improve their professional training and successfully return to the labour market. That is one of the major challenges we face, because it is the bedrock on which equal opportunities in a society are based.

- We will continue with the reforms, we cannot stop, and we will also continue with the process of fiscal consolidation. That has been fundamental in ensuring a change of course for our country. When I now see some people announcing counter-reforms against the reforms we have made, saying that they will undo the labour reform, I honestly don't know what to think. The reforms must continue and the fiscal consolidation process must continue, because these things have worked.

- We are going to work on further lowering taxes. I was forced to raise taxes. I had no alternative; at least, that is how we saw the situation in government. We have already started to lower them and believe we are in a position to do so further in the future, especially if tax revenue continues to grow as it has done until now in spite of having lowered taxes this year.

- It is essential to ensure there are more companies. We need to encourage more companies, even small ones, and help existing small companies grow into medium-sized companies and medium-sized companies into large companies. This must be a major priority during the next legislature.

- And, above all, we are going to tell the people of Spain that our priority is the fight against unemployment, to continue creating jobs. We want and need many more jobs: I am working to give peace of mind and security to pensioners, to give hope to young people, for families to be able to afford their monthly bills easily and to keep our healthcare and education services public and universal.

For all that, we need many more jobs and that will once again be a challenge for the next legislature; I've said it before and I say it again now, at the end of my speech. We can do it. The goal is to create 500,000 jobs each year; in 2016, 2017, 2018 and 2019. If 600,000 will be created in 2015 and 440,000 were created last year, if things are done with common sense, if we prioritise well and maintain the reform process, you can rest assured that we will see a Labour Force Survey showing 20 million people in work.

That will no doubt be what guarantees the best levels of well-being and wealth in the country and what will enable us to maintain the great pillars of the Welfare State that, without a shadow of a doubt, is one of the great challenges we face right now and in the future; a country where there are already 9,250,000 pensioners and a country where we see that public services - like healthcare and others - are the among the best and a source of great pride; and we are one of the few countries in the world where healthcare is free, public and universal... To maintain all this, we absolutely must generate economic activity and we need to create many jobs.

Ladies and gentlemen,

Thank you very much for your attention and I will now take any questions. Thank you.

Q&A SESSION WITH THE PRESIDENT OF THE GOVERNMENT

Ángel Expósito.- Earlier, Mr Rajoy, you said in your speech that you would talk about a lot of things and that later, during the Q&A session, I would probably ask you about things you were not going to mention in your speech. What do you think the questions I have received from colleagues and the audience are actually about? What topics?

President of the Government.- About what I said in my speech earlier.

Á. Expósito.- You haven't answered my question and they are grinning now. Well, if it is OK with you, I will start with the two topics I have received most questions about from my colleagues.

Firstly: Has the electorate given the Partido Popular and the Government of Spain five warnings?

President of the Government.- I am not going to argue with Mr Aznar because what I need to mostly focus on is trying to convince the people of Spain that the Partido Popular should remain in government. I believe that is best for the Partido Popular and for Spain.

Á. Expósito.- Do you expect to count on support from José María Aznar during the general election campaign?

President of the Government.- My previous answer also replies to that second and third question on the same topic.

Á. Expósito.- But I imagine that inviting someone to the general elections is not arguing with them, don't you?

President of the Government.- I have already answered the first question, the second, the third and any more.

Á. Expósito.- They ask you this: do you believe that Mr Aznar is being disloyal with his continued criticism?

President of the Government.- You are stubborn, aren't you? I can be too.

Á. Expósito.- As he would say, he would be surprised by such a comment about stubbornness. Another question then: how many seats won by the PP would be a good result on 20 December? Do you think that a party not winning the most votes might gain power for the first time?

President of the Government.- Number of seats? I am not going to give you a specific number because it doesn't matter, it makes no sense. I'm sure you will understand that I would like to have as many seats as possible, just like every other candidate that might stand in these elections.

As regards the second question, well, I would like Spain to be like Portugal and Germany; in other words, for the opposition to consist of serious people. However, after what we saw during the last municipal elections, when it was announced that they weren't going to vote and, furthermore, insisted that they weren't going to create a pact with Podemos, and then we saw what we saw, the Partido Popular won in Madrid and is not in power; it won in Zaragoza and is not in power; it won in Valencia and is not in power; it won in Seville and is not in power; it won in Cadiz and is not in power; it won in A Coruña and is not in power... Personally, I don't think this happens anywhere else in Europe - I repeat, remember what we have seen in Portugal and Germany; in the end, I think it is the best and most serious path of action for a country - that does not solely depend on me. Naturally, I am always in favour of power being given to the candidate receiving the most votes.

Á. Expósito.- They wonder whether you would be willing to create a pact with a centre-left party, such as Ciudadanos, to remain in power. I have another question along the same lines. Tell me, Mr President of the Government, is Ciudadanos a centre-left party?

President of the Government.- In all honesty, the Partido Popular is the party in government in Spain today and is the party that received the most support at the last general elections in Spain. We performed our duty in government, which I mentioned in my initial speech, and it certainly wasn't easy, as everyone already knows. I believe we have governed with dignity and I believe the results are there for all to see. Above all, and more importantly than the results, what we have now is a chance for the country to make significant progress in the next four years.

So, what I need to concern myself with is my party and explaining to the people of Spain what we have done in government and what we want to do in the future.

My party was not formed yesterday and nor does it stem from a television debate; this is a party born of democracy and it is a party that has grown not from the top down but rather from the bottom up, where a great many people have worked, that has grown stronger over the course of its history. At one point, we united all the centre and right parties to organise the Congress of the Partido Popular. It is a party with people throughout Spain, who stand at every election. In every town, no matter how small or weak the result, there is somebody flying the flag of the Partido Popular. It is a party that won the last municipal elections, which are held throughout Spain; it is a party that has more mayors than any other party in Spain, more local councillors, that is governing right now and has overcome a difficult situation.

That is what I need to concern myself with. Everyone else will need to look after themselves. And, I'm sorry to say that I will be focusing on trying to explain to the people of Spain why it is best that the Partido Popular should remain in government. Wasting my breath on talking about what might happen in the event that certain circumstances arise... Listen, I don't know, because maybe nothing will happen and I won't need to answer that question because it is irrelevant, so let's not waste our time.

Á. Expósito.- Can I ask you the same question again and insist on an answer, because the question was not about the current state of the Partido Popular but rather about Ciudadanos.

President of the Government.- I have already given you a good answer, but I can put it another way if you insist.

Á. Expósito.- It is true that you answered; but you will allow me to say that you didn't answer very well.

President of the Government.- That is your opinion.

Á. Expósito.- Of course.

President of the Government.- Which I disagree with on this occasion.

Á. Expósito.- So, I'm wrong, I suppose, am I?

Another question then: hypothetically-speaking, if Ciudadanos said they wanted to change a candidate in exchange for support for the Partido Popular, would you agree with that in order to avoid a different government?

President of the Government.- My previous answer stands.

Á. Expósito.- I get the impression we are going to finish this Q&A session in record time; it's just a feeling...

President of the Government.- There are more important issues we can talk about.

Á. Expósito.- And, of course, I have several of those too. I have a bit of everything. You'll see.

President of the Government.- You have more important issues, you say? So how would you describe these then?

Á. Expósito.- I just mean that I started with the subjects I received the most questions about, but I have many more and more are arriving.

President of the Government.- That is a good answer.

Á. Expósito.- I can ask you this then, off the top of my head: what has the PP done badly in these last four years? Is there anything you can be self-critical about?

President of the Government.- Yes, I suppose we might have done a few things badly; but, as is always the case in life, it is best to aim high; and what is our target? Why were we chosen by a majority of Spaniards at the end of 2011? Because that is aiming high. We were chosen because Spain was on the verge of bankruptcy; Spain was in economic recession; in a single legislature, 3,400,000 Spaniards had lost their jobs and the Spanish economy had every imbalance imaginable: public deficit, foreign trade deficit, inflation and competitiveness problems. A number of other European Union countries were already subject to a bail-out and we were told: you try and fix this situation.

I believe we have done just that. Of course, everything is subject to opinion and debate, and, as I said in my previous speech, we still have many structural reforms outstanding. We still have to continue making a fiscal consolidation effort, we have to persevere and there are still many people without a job. We have yet to return to the previous all-time record in terms of the amount of people in Spain with a job. But I believe Spain is a country in growth today, creating jobs, a country that has overcome its imbalances and that, if we do things right, the outlook in terms of economic affairs is positive.

Hence, in my opinion, that is the most important mandate given to us by the people of Spain. Other important events have also taken place over the course of the last few years. The corruption issue. There are those who indeed say we did not react quickly, that we were spineless, that we could have acted differently and that we did not communicate well. They are probably right. There are things that are done well, others that are not done so well and some things that can be done at one time and not at another.

But I would like to say that, since I have been President of the Government at least, the Courts - always, as far as I know - the Public Prosecutor's Office and the State Tax Agency have all acted independently, have taken the decisions they deem correct and appropriate, and the Government of Spain has respected their work, just as it respects the work of the Spanish Guardia Civil, the Spanish National Police Force or the Customs Agency.

I believe we have presented a very important package, which will be positive when controlling and, above all, preventing similar situations in the future. Important decisions in this regard have also been taken within our party.

There is no question that it was a tough issue, very painful for everyone, that stirred up my party a great deal and we could have probably been quicker and more diligent in that respect.

The third major issue... There are many, but the other issue about which a great deal has been said during this legislature is the issue of Catalonia. I will explain clearly what I have done in this regard and I will also talk about the famous stagnation that, as I said in my initial speech, this government could be accused of in many areas. However, I'm afraid that accusing it of stagnation is hugely inaccurate, to avoid using other words to describe it.

We spoke, both me personally and also through other people, with the leaders of the Regional Government of Catalonia; but the Government of Spain had only two options: to accept the Fiscal Compact, which was a sort of economic agreement system similar to that in the Basque Country or Navarre; or, if not, to accept a referendum. Is it inflexible to refuse a fiscal compact, to say that the regional financing model must be discussed by everyone among everyone, as has been the case until now? If that is stagnation, then, yes. Obviously, I did not accept the fiscal compact. And if it is inflexible to refuse to authorise a referendum that affects national sovereignty, then I am also inflexible. But, in all sincerity, I believe I acted as a responsible President of the Government should act. Furthermore, it was not difficult for me; there will never be a President of the Government who plays with these issues.

Stagnation and something else that is talked about: the referendum on 9 November. I think that talking is one thing and deciding is another, and leaders should decide carefully, with a proportional approach and knowing very clearly what the consequences of their decisions are. Some people were calling for something I am very proud not to have done, because I do not believe it would have been the most positive for the image of our country.

Á. Expósito.- What do you mean?

President of the Government.- For me to prevent there being a poll in the street or anywhere else. That was one of the demands being made of me.

That aside, as far as the Catalan issue is concerned, we took the most pressing and important steps for the people; which is sometimes forgotten. I mean, when we came to power, the Regional Government of Catalonia was unable to finance itself, it was unable to access the markets. The last time it accessed finance, it did so at 7.75% at one year; the famous "patriotic bonds". Today, the Regional Government of Catalonia is financing itself at zero per cent, the same as the rest - or most - of the regional governments.

We approved a Supplier Payment Plan, under which people - Catalans - were able to collect payment for services and goods provided. Something as reasonable as enabling suppliers to the public authorities to receive payments, and that is very important.

As we have been reminded here, we implemented the Regional Liquidity Fund. Through that fund, many regional

governments were able to refinance their debts and cover their deficit; in other words, the fundamental public services they provide to the people.

So, could we have done it better? Improvements can always be made. There are always people who say that things can be done better; but I believe we acted with prudence, proportionality, common sense, without forgetting the responsibilities we have as Government of Spain and, naturally, without renouncing the basic principles of our Constitution and coexistence.

Now the time has come to enter dialogue and rebuild bridges; but, of course, I know where, as President of the Government, I am not willing to give ground, ever.

Á. Expósito.- I have a lot of questions about issues you have just mentioned; Catalonia, for example. Allow me to ask you a couple of them now. How do you return a passion for being Spanish to the over two million people who voted for independence? And another question: And now what? What door can be left open for the next Regional Government of Catalonia?

President of the Government.- There is one very important figure to mention here. Five and a half million citizens of Catalonia were called to vote and, indeed, two million voted in favour of political parties with a certain position; two million. But there were three and a half million who did not do that. 36% of the electoral roll voted in favour, and the rest did not. And of the votes cast, 47% voted in favour and 53% did not. In other words, these figures should be kept in mind when forming a judgement from the big picture.

Returning passion to people? I think that certain people have been making an effort for a long time to separate and not unite, to create problems instead of trying to resolve problems. Naturally, when people repeatedly hear politicians saying things like "Spain is robbing us" or "Spain doesn't want us", that obviously creates room for a certain atmosphere.

Sometimes they say: "who is responsible for all this? Then they ask whether the Partido Popular could have been firmer, whether the Partido Socialista could have done... Everyone could have done something but, at the end of the day, the responsibilities lie with those to whom they are given and the person with the most responsibility is that person who, being the leader of a political party at the heart of Catalonia, suddenly breaks away - after 37 years - from their Unió partner, allies themselves with the whole Catalan left, leaves their party with the worst result in history and ends up creating this problem. Responsibility should also be sought there.

What needs to be done now? Well, the facts need to be presented and explained. Naturally, the only thing that cannot be done is break the law, shatter national unity, national sovereignty and the principle of equality among Spaniards. We need to explain that this is the oldest nation in Europe; that we have been living together for a long time; that there are affective, family, trade and all sorts of other ties that unite us; that we have done a great deal together, some bad but others good; for the last 50 years, Spain has had the fifth fastest rate of growth in terms of per capita income anywhere in the world; we have joined Europe; we have become a democratic country; we are an exporting country...; we are a great country. The fact is that Spain is a great country.

We were talking about the Welfare State earlier, in my speech. I mean, how many countries in the world have a State pension system...? You can count with the fingers of two hands the number of countries with a State pension system like we have in Spain. One of the largest countries in the world, with a growing GDP, allocates zero euros to its State pensions. There are very few countries in the world with a healthcare system like we have in Spain.

I remember, when we had that terrible outbreak of the Ebola virus, that here, fortunately, the Spanish healthcare system was able to cure someone who became sick for free, and we should all feel proud of that. At the same time, in another large country of the world - probably the most important - a nurse was handed a bill for 500,000 dollars. We can feel proud of that.

We can also feel proud of the Spanish social services system. We can also feel proud of our high-speed railway. Everyone here wants the high-speed network in their town or city, but there is only one country in the world with more kilometres of high-speed railway than Spain - that country is China.

We can feel proud of our highway and motorway infrastructure. Have I forgotten anything? Yes, the Mediterranean Corridor and anything else you would care to add; but let's compare ourselves with the rest of the world.

We can feel proud of our tourism sector, naturally. I mean, 75 million people are going to come here this year. Come on, I don't think they are being forced to! There must be something good in this country, the country visited by the second-highest number of tourists in the world. I'm sure they like the sunshine, no question, and the magnificent hotels we have in Spain, and restaurants; but also the public security and, I suppose, the public services and infrastructure.

All these things need to be explained. And these explanations take time. The Government of Spain cannot do this alone. There is a certain trend towards thinking that the government is responsible for all the bad things and none of the good, and that it has to do everything. That is impossible. I believe that is a task for everyone in Spain to undertake together.

Q.- Another question: when will we be able to have a State education system like other serious nations? Is what happened in Catalonia due to this transfer of powers?

President of the Government.- I already mentioned fundamental public services. I believe we have a pension system like no other, I believe our healthcare system is among the best in the world and I think where we need to make a huge effort is in terms of education. One of the clichés being used at the moment is that, whenever a new government comes to power, it changes the education system.

Á. Expósito.- Cliché, no; it's quite true.

President of the Government.- It is false, plain and simple. Only two education systems have been applied in Spain in recent years: Franco's and the one put in place by the Socialist Party, because the Partido Popular approved a law when it came to power that was repealed by the PSOE 24 hours after it returned to power without the law having come into effect. We have now approved a new Education Act, and that Education Act has come into effect. I believe that we are taking steps in the right direction.

We have taken steps in the right direction in terms of Vocational Training and Dual Vocational Training. In my opinion, the fact that the number of Vocational Training students has increased by almost 200,000 in the last four years is enormously positive for Spain because that is the way into the labour market and that is where the chance lies for many young people to make a living. The same can be said about Dual Vocational Training.

There is still more to be done, but we are working with large companies on a system to combine studying and working. The point now is to see if we can do that with medium-sized companies and then SMEs; we probably need more medium-sized companies in Spain.

But, yes, I believe we need to make progress in terms of education and it is undoubtedly one of the major challenges for the next four years.

Á. Expósito.- Allow me to make a small joke, if you will, on the issue of Dual Vocational Training; is it possible that we will, because there are those who want to put university students to street sweeping, imagine, so they can learn.

Let me put it another way: everyone in their time...

President of the Government.- Let's be clear about who wants to do that. This is one of the commitments for the future, and they have been made thanks to who is there.

Á. Expósito.- Who?

President of the Government.- Those who voted for them: the Partido Socialista.

Á. Expósito.- I was going to ask about the education issue with a different question: looking back, maybe not too far but certainly a few years, was it a mistake to transfer powers over education issues to the regional governments?

President of the Government.- Actually, the real mistake was the disloyalty shown from certain quarters. That was basically the mistake. The fact that education issues are managed by the regional governments is not a bad idea, in my opinion. In fact, there are many regional governments that do it and some of those autonomous regions obtain good scores in the PISA Report, as you know, Castile-Leon, for example, La Rioja, and others. There should be loyalty and, when the State produces the basic legislation - which it does under the Spanish Constitution and the Statutes of Autonomy, the basic legislation of the State should be respected.

Á. Expósito.- As regards another of the issues you mentioned two answers back, the issue of corruption, I have questions asking what hurt the PP most: the cases of corruption or the management of the crisis.

President of the Government.- The cases of corruption.

Á. Expósito.- Any one of them in particular?

President of the Government.- All of them. All of the cases we have seen over these last few years.

As regards the management of the crisis, there have indeed been criticisms, complaints, arguments and reasons. Naturally, I have to appreciate that, if public servants have their wages frozen for five years, they are not going to openly and happily applaud the government. A lot of people clearly didn't like some of the decisions we made. But, in the end, everyone, even the critics, knows that certain decisions needed to be taken in Spain and that, in the end, those decisions will be positive for the country as a whole.

The thing is that this does not happen with corruption. Things happened the way they did. As I said before, we made all the decisions that were in our hands to make and I, naturally, am willing to consider any that people wish to propose, in good faith; whoever that may be. I have the package of laws we approved right here, but I don't think this is the time for that. Some of them are truly important, but I don't think this is the time to remind you of them all; it would be rather dull.

I think we have also taken decisions in terms of politics and, as I said before, the Rule of Law is working and acting independently. Just as we have made mistakes, others are equally likely to do so. However, I hope that everything we have seen in recent years can be food for thought looking forward and that you never need to ask that question of me or anyone else ever again.

Á. Expósito.- I hope so too. We are talking about corruption in the past tense, the cases we have already seen. I am being asked whether the cases that are in all the newspapers at the moment, such as the cases involving Mr Rato, might harm the election campaign.

President of the Government.- Harm, any government decision can cause harm. Harm, the labour reform might cause harm; harm, the public deficit reduction, the restructuring of the financial system, corruption in general might cause harm, and anything that can be attributed to one person or another.

Á. Expósito.- We have been talking for a little over 20 minutes; I have three or four issues left to ask you about. I hope I have time to get through them all.

As far as economic affairs go, I have two or three questions. The first is whether Spain will meet its deficit target. Can you give a firm guarantee?

President of the Government.- Yes. When we came to power, we had a public deficit - that was the first big surprise - of 9.1%. By the end of this year, 2015, it will be less than half that 9.1%. Furthermore, we have had to reduce the public deficit during two years of recession and, therefore, falling revenue: 2012 and 2013. I know that the European Commission has now said it has its doubts, but it also had doubts last year and gave us 1 or 1.2 points more deficit in its forecasts than we actually posted in the end. Therefore, I believe we will meet the public deficit target this year.

There is one very positive fact: expenditure remains under control, and revenue is increasing. Despite lowering Income Tax twice this year and Corporate Income Tax, revenue is increasing because there is more economic activity. As the Minister for the Treasury said not long ago, revenue is increasing by approximately 7% and is already higher than the amount we budgeted for as revenue this year.

Therefore, I am confident we will manage that. I believe this is good and positive for Spain. In the budget we have presented to Parliament, which is being debated, the forecast for this year stands at 2.8%, with which we will already be below the 3% limit. However, I repeat, I believe this is very important for our country and it has given us a great deal of credit overseas, just as remedying the disproportionate deficit increase did.

Á. Expósito.- Allow me, if you will, to ask you something secret. Of those here - we journalists know what we know, which, on the topic I am about to ask you about, is absolutely nothing - how many people asked, advised, recommended you to ask for a bailout?

President of the Government.- Of those of us here, none.

Á. Expósito.- Take a look around, Mr President of the Government...

President of the Government.- I can see perfectly well.

Á. Expósito.- And what about those who aren't here.

President of the Government.- Ah! We can talk about those who aren't here when they are here.

Á. Expósito.- Why are people, public opinion and many voters not aware of what is surely the great success story of the Spanish economy; i.e. having avoided that bailout? Perhaps I am mistaken but I, personally, believe that the majority of voters are unaware or do not realise the importance of that.

President of the Government.- Of what?

Á. Expósito.- Of having avoided the bailout.

President of the Government.- Sometimes, more importance is given to a problem when it is resolved than when it is avoided in the first place, and that is significant. I will give you an example, which cannot be applied to this situation: there is a kidnapping, and it gets resolved. I was Minister for Home Affairs and having such a situation resolved is very positive, but it would have been far more positive to have avoided the kidnapping in the first place. I think that is what happened here.

Á. Expósito.- Another question on economic issues. It has been in all the headlines these last few weeks but, given all the other economic news, we pay it less attention and it seems very important. Volkswagen has announced an investment reduction to their lowest levels. How much does this worry the government? Could this affect results, growth?

President of the Government.- Of course that concerns me. It concerns me because I was in Martorell, in the province of Barcelona, last month, in September, and, while I was there, Volkswagen announced an investment of 3.3 billion euros at its factory in Martorell and another investment of 1 billion euros at its factory in Navarre. So, I am concerned, but I have absolutely no knowledge...

Á. Expósito.- The news was released at about one, just after one, as an announcement from the company.

President of the Government.- But it's generic, isn't it?

Á. Expósito.- Investments, to a minimum. Right now. That's all I know.

President of the Government.- That concerns me. I will try to ensure that is not the case, naturally, I suppose Volkswagen will need to tackle certain problems in the time ahead. What I would like is for them to resolve them as soon as possible.

I must say that both Volkswagen SEAT and the entire automotive sector in Spain has produced magnificent results during this legislature. They have committed to Spain at the toughest of times; Ford did the same, Opel did the same... I was there, I was in Valencia, I was in Zaragoza, I was in Barcelona, I was in Palencia and I was in Valladolid. They have made strong commitments to Spain. It is a vital sector for Spain, it competes with the agri-food industry and chemical products for second place in terms of export activity and, naturally, they will always receive support from the people of Spain; if they behave as they should, of course.

Á. Expósito.- On international matters - I see these as absolutely key and fundamental given what is happening in the world and I do not want them to seem less important because I bring them up almost at the end; quite the opposite. They say that Syria and Libya simply must be fixed. How far is Spain willing to go?

President of the Government.- This is true, but the thing is... I mentioned this before; that problems must be resolved when they arise and not resolved when they don't arise, when they are avoided.

The Libyan issue basically affects what we refer to as immigration for economic reasons. In other words, 170,000 people arrived in Italy from Libya, which is a country with enormous difficulties - it doesn't have one government, it has two, it is very difficult to reach agreements and understandings. What needs to be done is create a policy at source via the European institutions, as Spain has done. Because 4,000 arrived in Spain last year, and 170,000 in Italy. So, the Libyan issue simply must be resolved. There were two Parliaments, one in Tobruk and another in Tripoli. I believe the mandates for both expire about now, in October; but I cannot say that categorically. Nonetheless, it is an area where work is being done, the United Nations is providing mediation and the Special Envoy is a Spanish diplomat, Bernardino León; but resolving this issue is essential.

And Syria, what do you want me to say? Eight million displaced inside Syria, two and a half million people in Turkey, a little over one million in Jordan, the same amount in Lebanon, and now we can see what is happening in every country of the European Union and all sorts of consequences, not only economic but all sorts, from these events. The situation in Syria must be brought to a close and I would say this: in Syria, the priority is our fight against DAESH, what some people call the Islamic State, and, therefore, any contribution to the fight against DAESH is well received. That said, we should not confuse our enemy: the target is Jihadi terrorism and no others.

At the end of the day, an end to the conflict involves a political situation in which, in my opinion, moderate opposition must participate, as well as the Damascus regime. After that, we will see; but a clear idea must be maintained about who is the enemy, here and always in life. People sometimes choose their friends unwisely, but choosing enemies brings worse consequences than choosing friends. In other words, we should tread carefully on this issue.

Á. Expósito.- It is my understanding that, in your opinion, in this short and medium term, it is important to do so with al-Assad.

President of the Government.- It is important to also consider the Syrian Government.

Á. Expósito.- To conclude, let us return to matters of domestic politics? Is that OK with you?

President of the Government.- Yes.

Á. Expósito.- On party affairs, the PP, I am asked whether Feijóo will be a candidate for the Lower House of Parliament and whether it would be convenient...; whether Mr Alberto Núñez Feijóo is going to stand in the general elections.

President of the Government.- The truth is that I have not spoken to Alberto Núñez Feijóo about this. Everyone wants him to stand for President of the Regional Government of Galicia, but it is more important to listen to what he wants.

Á. Expósito.- We have also asked him but, maybe because he is from Galicia, he has no clear, specific answer for us in this regard.

President of the Government.- Him? Mr Feijóo doesn't answer questions?

Á. Expósito.- Why does that surprise you?!

Do the elections in Spain continue to be won by the centre, Mr President of the Government?

President of the Government.- I think the elections are won through being reasonable, through seriousness and common sense, doing reasonable things; that is what matters most. And, I think, through moderation and prudence, and competition, if possible; that is also very important. The people given responsibilities are important and, naturally, they need to be competent.

Á. Expósito.- I am asked whether you can take stock of these months of government by Podemos, with support from the PSOE.

President of the Government.- Was yesterday's traffic jam not demonstration enough or...

Á. Expósito.- Well, the traffic jam was not caused by Ms Carmena, although many of us remembered... But that is another debate.

President of the Government.- I think, in the best of scenarios, I can say that nothing has been done, nothing has been brought to the table and there are indeed issues that concern me. Naturally, decisions like those taken in Barcelona to suspend tourism investment for one year concern me greatly because there are many people who were going to invest and now they won't. That is what we have been told. Neither does stopping certain major investments here, in Madrid, which depend on the local council, some of them very important, seem like the best of decisions to me.

People should see reality for what it is and not try to transpose the reality they have in their heads into the world, which is the real world at the end of the day. I don't think they have made any positive contributions to the governance of our country or our towns.

Á. Expósito.- They tell me that Pedro Sánchez said this morning on COPE, with Herrera, that he will not govern at any price in response to the question about whether he is in second place or would come to power. Do you believe him?

President of the Government.- Personally, I make very few value judgements. I remember that I said I would never reach a pact with Podemos and I won't repeat what I said a moment ago; and, of course, I would never reach a pact with pro-independence parties and, for example, in the third city of Catalonia, Badalona, he preferred to give the mayor's place to CUP when the Partido Popular had won the elections with more than twice the number of votes as the second placed party. Something similar happened in Castelldefels, with one difference: the candidate and the mayor there was from the PSOE and, rather than receive support from all the rest, he put Castelldefels in the Association of Pro-independence Municipalities of Catalonia, which must come as a quite a surprise to the people of Castelldefels, where the PP won, followed by the Partido Socialista. Meaning that, it seems there are few pro-independence supporters there.

Therefore, at the end of the day, it is not about passing judgement about what one thinks or stops thinking; it is about judging facts and, in actual fact, given what we have seen... I pass no judgement.

Á. Expósito.- I have two phrases for you; tell me which you like most, if you will, to finish. "Hit the deck, our troops are coming" or "dirty laundry should be washed at home".

President of the Government.- Draw. A cross next to both.

Á. Expósito.- But do you mean that you like both or neither of them?

President of the Government.- It means what it means, Ángel.

Á. Expósito.- Mr President of the Government, this is the first Forum of this legislature, it has been tough, and it's obvious you are still from Galicia.

Thank you very much.

President of the Government. Thank you very much.