Press conference by President of the Government following G-20 Summit

Hangzhou (People's Republic of China)

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

As you know, the G-20 Summit tackled various issues of global importance. I will outline them briefly, particularly, and as far as possible, those issues that I consider to be most important, as well as Spain's contribution to the debates.

Firstly, the members of the G-20 analysed the global economy: growth is sluggish and risks still exist; we are concerned by the lack of growth in trade and investment, the fluctuations in the financial markets and the volatility of the prices of raw materials; and furthermore, there are geo-political risks - terrorism - and, of course, 'Brexit'.

As reflected in the official statement, our priority is to achieve strong, balanced, sustained and inclusive growth. To achieve that, the leaders of the G-20 believe that a global and coordinated response is necessary in terms of our economic policies: monetary policy, fiscal policy and structural reforms, without forgetting that the ultimate goal is for the benefits of growth to filter down to our citizens, in particular through employment. We are also convinced that fostering trade and investment is a priority for sound growth in a global economy.

The leaders of the G-20 also specifically highlighted the central role of structural reforms in increasing productivity, growth and job creation. All of that, as you are aware, is in line with what Spain has been doing since the year 2012: we have worked on the sustainability of the public accounts for recovering confidence in the economy and fostering the recovery, and we have undertaken far-reaching structural reforms to increase the flexibility and competitiveness of the Spanish economy, which is why we are growing and creating jobs. As you all know, we have grown by 3.2% in 2015, the major European Union economy to have grown at the fastest rate, more than double the European Union average, and since 2014, half a million jobs are being created each year in our country.

That is the path to take and that is what the G-20 is telling us to do. We must continue working along these lines to bed down economic growth and job creation which, as you have heard me say on many occasions, must be the main fundamental goals for the next four years in our country.

Moreover, we placed great emphasis on two issues: innovation and the digital economy as drivers of long-term growth. These are issues that the Government of Spain has been working hard on, both in the European Union and in the G-20, convinced that they are key for continuing to increase our competitiveness, for growth and for job creation.

But these issues also require that we tackle new challenges. In the future, we must roll out high-speed digital networks and this must be carried out with great efficiency. At present, Spain has the finest digital networks in Europe thanks to the favourable framework for investment created by the government. 4G coverage has increased over the last four years, from zero in 2012 to 90% of the population in 2016; almost 23 million homes now have fibre optic cable - leading the way in Europe - and broadband prices, both fixed and mobile, have fallen across the board since 2012. Furthermore, many specific programmes have been set in motion to expand ultrafast broadband to non-profitable areas and schools, and we are the European leaders in the implementation of e-government.

It is also necessary to make progress in other areas: developing European digital platforms, which allow us to compete with other regions, protecting the rights of individuals, such as the right to privacy, honour and to be forgotten, network security and inciting hatred, appropriately remunerating intellectual property and regulating taxation by levying a tax on activities where they generate value.

Lastly, we are facing a very important challenge: to transform our industry and our services, and to speed up the adoption of digital technologies by our citizens, increasing their training in these areas. This, I repeat, is key and is reflected in the official statement, and of course, this is the intention of the Spanish Government.

A second issue we placed great emphasis on is ensuring that the benefits of economic growth filter down to everyone, particularly through the creation of quality jobs. In this area, we have approved some important actions, among others, an action plan on entrepreneurship, because this is a fundamental driver, as you are aware, of job creation, and an initiative - an issue to which we are also committed to give due importance and backing over the coming years; we have already begun working on these four areas and I believe we should continue with this - to promote quality education and training.

Access to employment, particularly quality employment, is subject to many factors, one of which is clearly good training, both at the start, and then during the course of one's professional career. We are working on this in Spain, as I have said: the measures approved in 2012 have led to almost half a million young people under the age of 30 finding a job through training contracts and apprenticeships. We have also insisted, and must continue to do so in the future, on the importance of Vocational Training and Dual Vocational Training.

In short, I believe that what we have debated here, and what I have heard, backs the policies that we have implemented in this area over the last few years.

A third issue contained in the official statement, and on which the G-20 has a great deal to contribute, is coordinated, global and effective action in cooperation on fiscal matters and on the fight against fraud and tax evasion. Spain is one of the pioneering countries in the implementation of the package approved last year to tackle tax evasion, the so-called BEPS Project, and we are heading up multilateral initiatives for the automatic exchange of information. I trust that we will maintain this leading role in the future, since the fight against fraud is a moral duty of any government.

Together with the main issues, there were many others, six of which I will mention. I will do so briefly and I will mention these because they are important for Spain.

First, international trade and investment. We have sent out a clear message to boost trade and investment, and to tackle protectionism in all its guises.

Second, we also spoke about climate change, which is another of the issues we discussed on the basis of the Paris Agreement, which you are familiar with. The official statement includes the intention to bring this agreement into force and effect in 2016, and, given the pace of expected ratifications, this is highly likely to happen. As you know, the entry into force will take place 30 days following the ratification of the agreement by 55 countries that represent at least 55% of all global emissions. In Spain, since we only have a caretaker government, we cannot ratify this for the time being, but we will ratify this once we cease to have a caretaker government.

As regards energy, another issue that greatly affects us, the official statement, upon a petition from Spain, and backed by other countries, acknowledges the importance of interconnections as a critical element for guaranteeing secure, sustainable and affordable energy. This is an issue on which we insisted strongly because, as you are aware, our level of interconnections is very low and that reduces energy security.

We also spoke about terrorist financing. Firstly, I want to stress the Government of Spain's firm and unwavering condemnation of any form of terrorism. As regards its financing, we have acknowledged the need to swiftly and fully implement the operational plan of the Financial Action Task Force (FATF) to combat money laundering. This is something for which Spain, moreover, will be particularly responsible since we have been holding the presidency of this group since July for a one-year period.

As regards development cooperation, we have called for the effective implementation of the so-called 2030 Sustainable Development Agenda. As you know, this agenda was adopted by the United Nations in September last year and constitutes a new global consensus on the issue of development, replacing the former Millennium Development Goals.

We have also spoken about the refugee crisis, principally on the events unfolding in Syria, Turkey, Greece and in other European countries. We have called for concerted action and shared responsibility, both in relation to the protection of refugees, and in dealing with the causes of the crisis which, as we all know, are armed conflict and terror.

In conclusion, my balance of this summit is positive. It has been observed that Spain is growing, that our economic policies are in line with what everyone considers necessary and, moreover, various priority issues for our country have been included.

Lastly, I have taken the opportunity here today to hold bilateral meetings with the President of the People's Republic of China and with the President of Brazil - I had not previously had a chance to meet up with him because, as you know, he has only held this office for a short time - and also with the President of Argentina, with whom I had spoken by phone but, given the situation we are in, we had not coincided before. So, I have held bilateral meetings with the presidents of China, Brazil and Argentina.

I will now take any questions you may have for me.

Q.- President of the Government, yesterday the Minister for Economic Affairs confirmed to us that a decree will soon be approved on Corporate Income Tax. I wanted to ask you if you are going to do the right thing, and if this can be done by a caretaker government, by revaluing pensions and raising the salaries of public servants.

President of the Government.- In this case, it can be done because this is a measure without which it will be impossible to meet the deficit targets set for 2016; hence this is an urgent issue.

In relation to the issue of public servants and pensions, the legal uncertainty is absolute; in fact, on previous occasions, as far as I can remember, this could not be done. At any event, when they are approved, they will need to be done retroactively. But it is clear that, as a caretaker government, decisions can only be adopted that correspond to the government and which do not impose obligations on anyone. Hence, this undoubtedly generates obligations on any new government.

Q.- President of the Government, the Speaker of the Lower House, Ana Pastor, is today meeting up with the King at Zarzuela Palace. Regardless of what the Head of State may be able to do, I would like to know what your intentions are in terms of a new investiture, followed the failed investiture attempt. What do you plan to do? Do you intend to maintain the pact with Ciudadanos or not?

What do you think about Pedro Sánchez exploring, if he believes that this path is viable, the possibility of an investiture or of trying to reach an agreement with Ciudadanos and Podemos?

President of the Government.- My intentions can be summed up in one word - perseverance. I believe that, given the circumstances, following two elections and with Spain being run by a caretaker government since 21 December last year, the only thing left is to persevere.

In all honesty, I believe that I have done my duty in recent days, and I have complied with my obligation to stand for a vote of confidence, with the backing of 137 People's Party MPs. In the second round of elections, the only party to receive more votes, a higher percentage and more seats was the People's Party, and hence, I decided to stand for the investiture. I believe I have done my duty in trying to reach agreements with those parties with which it was logical to try to reach an understanding and, in fact, I stood and was backed by 170 MPs, only six shy of an absolute majority. Hence, I will continue to adopt this approach.

Everyone is aware of my position, because, moreover, my position has not changed; I have been saying the same thing since 21 December. Many formulas exist in the situation in which Spain finds itself, because the maths allows for almost anything; but what is reasonable, what is sensible, what generates confidence, what sends out a good message to the economic and social agents, and to our citizens, what conveys reassurance and inspires confidence was the coalition that I proposed between the leading party, which was the People's Party, the second party - which was the Socialist Party - and Ciudadanos. That was what I proposed on 21 December, I did so again following the elections on 26 June and, in all honesty, I still maintain that this is the best thing for Spain today. I continue to think this and I believe that there are many other people who also see it this way.

But you have seen how the debate unfolded with this infamous expression used of "potential allies". What he is saying to us "is that you must make a pact with your potential allies...". But, of course, someone who defends the independence of part of our national territory is not a potential ally of the People's Party. There are many other potential allies, although the only thing we would ask of them is to abstain and allow the country to be governed - because we can already see that this coalition is impossible - by those with whom you agree on the Constitution, on the EU acquis and on so many other issues. Hence, that remains my position, which remains the same as eight months ago.

You asked me about the agreement with Ciudadanos. Well, I want the agreement with Ciudadanos to remain in place, of course I do, because this was a good agreement. We only signed this six or seven days ago and I am not going to change my mind in six or seven days. This was a good agreement, a lot of hard work went into it and I believe that it contains measures that could be useful for tackling the problems Spain is facing. A significant part of the programme contains the policies of the People's Party, but other parts don't, which forces us to rectify some of the things we have done. Hence, I believe it is positive. If that was the case six or seven days ago, I cannot name a single reason or argument to say why it is not the case now because, moreover, this has served for at least 170 people to stand up and say: we must form a government and must not continue in the situation we are in.

As regards the exploration you enquired after, this happened the other time and they have said "no" to him again. This makes no sense. In the end - responses exist, although everyone may then have their own interests and do what they want and look at how to turn the situation around - it is very difficult to fight common sense and reason, and what does common sense dictate? The leading party has 52 more seats than the second party. So, either we form a coalition, which is the best option, or we make an agreement on the main issues, which is the second proposal I made, or, if you don't even want that, at least allow a government to be formed, because going to a third round of elections within the period of a year is very worrying. Everyone has been asking me about this here, it was the only thing I was asked about because it is not a normal situation. This does not happen in advanced democracies.

Hence, the response to the question you have asked me as to "what are you going to do?" is to persevere. I am going to continue to try to form a government; and if I can't form one, then just look, we will have to go back to the ballot box, I fear, but, in all honesty, I believe that this is very bad news for Spain. As I warned the other day in the Lower House of Parliament, for the time being we have a good rate of growth and we continue to create jobs, but that is for the time being. Let's see what happens in the near future.

Q.- You said that everyone here has been asking after the situation in Spain and I just wanted to ask you whether you have expressed your concern to the other leaders regarding the political stalemate in Spain and the instability that this could cause the European and hence, the global, economy.

If you will allow me to ask a second question, regarding the case of José Manuel Soria, the President of the Regional Government of Galicia has said that it is difficult to understand and to explain his appointment. My question is, if Soria resigned when he did in order to not prejudice the party, do you know if he is prepared to also renounce this post on the same grounds?

President of the Government.- I don't know anything. The only thing I know is that Mr Soria left politics. It's not just that he stopped being a minister, he also stopped being an MP, he stopped being the party president and he declared his intention never go back into politics again. Mr Soria is a public servant and, as such, as many others do he has gone back into the public administration and has taken part in a selection process, as do all public servants. The selection process of public servants has been completed and I, aside from this, can add absolutely nothing more. We are not talking about an issue that affects a politician; at this time we are talking about a public servant who has acted as all public servants do.

At any event, the Minister for Economic Affairs will appear in Parliament, but I, in all honesty, cannot say any more. Quite simply, because I don't know and I can't see anything other than what seems obvious to me: he has left politics and has stood for a position in the same way as a diplomat may do, or anyone else who was involved in politics and who then returns to their activity, which they are entitled to do, as you know, based on the provisions established by law.

As regards your first question, there are many people asking me about this, but that's quite normal, don't you think? Everyone is waiting to see what happens everywhere, above all in their neighbouring countries. In reality, the situation in Europe is not ideal because if you have seen, and I am sure you have, the figures on economic growth in the last quarter, the Eurozone grew by 0.3% with two of the largest European economies posting zero growth in the second quarter. Just listen, we posted 0.8% growth, in other words, almost triple that, and we have year-on-year growth of 3.2% and the forecast for growth this year stands at 2.9%. That is the latest forecast posted by the government. That is reasonable, above all after the misery we have seen in Spain with several years of negative economic growth.

Aside from this sluggish growth in Europe we have the problem of terrorism, which is very complicated and generates tension; we have 'Brexit' and we have the refugee crisis. At this time, Spain has a wonderful opportunity because Spain understands the refugee issue, it understands the issue of terrorism and it is growing to become an important country which is offering stability to the Eurozone. This has taken place at a time in which our country has been operating under a caretaker government for eight months now and which, moreover, has the sword of Damocles hanging over it in the form of a new round of elections. Of course, this is truly something noteworthy. I have not seen this situation before in my life, and nor has anyone else. This is one of the most surprising things I have ever seen in my entire political career.

Q.- President of the Government, I am going to insist on the issue of Soria. I know we are thousands of miles away but there are many voices being heard within the People's Party over the last 48 hours who do not understand this and I was wondering whether you propose to rectify this at some time.

President of the Government.- I have already said all I am going to say on this issue.

Q.- Could you tell us what you have discussed with Presidents Temer and Macri, and also whether you believe that this anomalous situation of Spanish politics could weaken Spain's position when negotiating or discussing with countries such as these - Latin American countries - or at international summits such as the G-20?

President of the Government.- The situation we are in at this time, which is perfectly understandable, does not help. If Spain had a stable government, a government that could thus generate confidence, set a course and know what it was going to in the future, this would undoubtedly be much better.

At this time Spain has a caretaker government, which can take, as you know, very few decisions, and there is great uncertainty regarding what is going to happen in the next month, or the following month, whether there will be elections or not. At any event, this does not help.

The positive aspect of this situation is that we approved the General State Budget for 2016 and that the reforms take time to take effect and these reforms are still proving effective. Today we have stated here that structural reforms are important and yet we have spent the last year without being able to present a single draft law to Parliament. That is a fact that is not helpful; quite frankly it doesn't help at all. Aside from that, as I said before, the economy is going quite well, but we will have to see how it develops.

We exchanged information with the President of Brazil on the Spanish political situation, which he asked after. He explained to me the political situation in Brazil and I conveyed to him the invitation from H.M. the King for him to come to Spain on a State visit. We spoke about MERCOSUR, and he is very interested in an agreement being reached between MERCOSUR and the European Union; we have spoken about supporting the peace process in Colombia, and we have also spoken about the situation in Venezuela. We mainly spoke about economic issues and other matters related to the situation in Lain America.

We also spoke with the President of Argentina about the situation in Spain, as well as the political situation and the situation in Argentina. I believe that President Macri has recently been taking important decisions from an economic point of view. I believe that it has been fundamental for Argentina to return to the markets; I believe that the arrangements reached with its creditors are positive; good debt issues have taken place and, in all honesty, I believe that Argentina is now improving its outlook and inspiring greater confidence all over the world. That is what I told him because that is what I believe.

He agrees with Brazil on the issue of MERCOSUR, we also spoke about Venezuela and about Spanish companies and of our interest in Spanish companies continuing to operate there, generating wealth and creating jobs. We are the third- highest leading country in the world in terms of investment in Brazil and I believe that the second-highest investor in Argentina at this time. In other words, these are countries we have ties with, for many reasons and on many issues, and economic relations are also very important.

Q.- If you allow let me, I am going to try to express it another way…

President of the Government.- This is your last question, Casqueiro. Choose it well.

Q.- I will choose it well. I am going to try to express it another way and I will echo the words of the leaders of the PP, not of journalists or public opinion, but of the very leaders of the PP, who are demanding explanations because they don't understand what has happened. I wanted to know whether or not you appreciate that there are many people in Spain who cannot understand how someone who was not worthy, due to his conduct or his lies, to be a Spanish minister, can be worthy of representing Spain in such an important institution. There are leaders…, I am not talking about us, or about public opinion or our citizens; there are leaders of your party who are telling you that they want an explanation. I believe that you should also give us some kind of explanation and let us know whether there is any chance this will be reconsidered.

If you will also allow me, I would like to insist on the issue of a pact, President of the Government. Last week we had the investiture situation which panned out as it did; today a meeting has been held and you say to us "persevere". And I say to you, don't you have another plan? Was that your only plan? You gave us the sensation that, when you spoke about meetings, you didn't take them seriously. You wanted to hold meetings, I imagine, with Pedro Sánchez and with Ciudadanos, because you had a plan. Don't you have one?

President of the Government.- That was on Saturday. I left for China and arrived in China. It would have been hard for me to hold a meeting with anyone.

As I said before, and that was the right answer, what I am going to do is persevere and, as I pointed out in response to one of your colleagues, I would like to maintain the agreement with Ciudadanos and then I will once again try to do exactly the same as I have been trying to do for months now. That is all there is. It is not a question of trying to pull a rabbit out of the hat. When you have clear ideas, the obvious thing to do is defend these ideas and not apply the well-know technique of "these are my principles and, if you don't like them, then I have others".

Thank you very much.