Speech by President of the Government in Lower House of Parliament to report on Conclusions from European Council on 9 March 2017

Madrid

Madam Speaker, Honourable Members of Parliament,

I appear here at the plenary session of the Lower House to report on the Conclusions of the European Council held on 9 March in Brussels, and I say on the "9th" and not the 9 and 10 March, because the meeting on the 10th was informal and of the 27, without the presence of the United Kingdom.

However, I should point out that the issues of greatest interest, that is, those related to the future of the European Union, were raised on the 10th. There everything was dealt with related to the upcoming summit to be held in Rome in 10 days' time at which we will look to provide a response to the big question that we have asked today: What do we want the European Union to be in the future?

But allow me to get back to the chronological order of events and report to you on the Conclusions of the ordinary meeting of the European Council.

On Thursday, 9 March, the first thing we agreed on was to re-elect Donald Tusk as President of the European Council until 30 November 2019. At a time when it is necessary to devote all our energies and efforts to providing a response to the true challenges facing the European Union, I believe that we must all welcome a decision that will help contribute stability to the European institutions.

Honourable Members,

As you are aware, at the ordinary spring Council meeting each year, economic issues hold special importance and this is the case because at this Council meeting we discuss the priorities of the so-called European Semester, which establishes the framework for the coordination of economic policies among the countries of the European Union.

Within this area, the first thing we observed is that the European Union has overcome the worst of the economic crisis and today, for the first time in almost a decade, all the Member States have positive forecasts for growth and job creation in the years ahead.

That is why, at this Council, and within the framework of the European Semester, we have agreed to maintain the priorities of recent years: to boost investment, to persevere with structural reforms and to apply responsible fiscal policies. These are the same cornerstones on which Spain structured its own reform agenda.

Thanks to that, and to the efforts from Spanish society, our economy has experienced an unprecedented transformation. The Spanish economy is now a benchmark for recovery, it contributes stability to the Euro, it is growing and creating jobs. Spain's GDP grew by 3.2% in 2016, and 2.5% growth is forecast for 2017. That places us at the head of the main economies in the Eurozone, with a level of growth that is almost double the Eurozone average, which stands at 1.7%. Thanks to this good rate of growth, Spain's GDP increased in the period 2014-2016 by 9%, and in the first half of this year, Spain will recover the level of wealth it enjoyed before the start of the recession.

This growth is translating quickly into job creation and shorter unemployment queues. Since 2014, more than 1.5 million net jobs have been created and the unemployment rate has fallen from 26.9% at the start of 2013 to 18.6% in the latest figures we saw in the fourth quarter of 2016. We expect to create more than 400,000 jobs in 2017, this year, which will allow us, if this trend continues, to achieve an unemployment rate of 13% by the end of 2019.

Growth in Spain, moreover, is balanced. Spain has now posted four straight years with a positive balance in its current account - 2% of GDP in 2016 - which is the best figure on record. We are growing without our foreign debt rising, because the Spanish economy has gained in competitiveness.

Other figures also reflect this change: the confidence in the Spanish economy, the reduction in the risk premium, the figures on the incorporation of new companies and the end of credit restrictions.

The European Commission, in its Country Report under the European Semester 2017, acknowledged the effort made by our country and observed the sound growth of the Spanish economy. In this report, the Commission very highly rates the reform agenda implemented in recent years in such important areas as finance, employment, energy and market unity.

But, having said that, we should remember that there is still a lot of work to be done. The crisis has been very harmful, particularly in Spain; and also in other countries. So, we must continue working on all fronts, both at a national level and a European level, to bed down growth and ensure that its benefits reach all our citizens and continue to reduce unemployment.

Job creation is, as you are aware, the main priority of my government. Our goal is to maintain the rate of job creation of recent years so that by 2020 there are 20 million people in work. I believe that this can be achieved if things are done well, in a reasonable manner, and that is what we are working towards.

To that end, at this European Council, I advocated three elements that I considered to be essential to my European colleagues so that the European Union and Spain can continue down the path of growth and job creation:

• Firstly, we must not undo the reforms we have adopted, but rather continue taking steps and, if possible, improve them. That will allow us to strengthen the competitiveness of our economies. I am not going to go into detail about all the reforms, but I would like to mention, at a European level, two issues that I believe are important:
• Firstly, we need to continue extending the single market. Both the Digital Agenda and the Energy Union are particularly important areas for Spain; they are fundamental, as you know, for ensuring the competitiveness of our economies.
• I also want to stress the Juncker Plan, which will be stepped up; the Juncker Plan for Strategic Investments. This plan is working very well, particularly in Spain. We are the second-placed leading country in terms of volume of mobilised investment: some 23 billion euros in the year and a half that the plan has been operational. Specifically, 30 infrastructure and innovation projects have been approved for a total sum of 3 billion euros; and we anticipate that this will mobilise investments for a sum of 17 billion euros. Furthermore, 11 agreements have been approved with financial intermediaries to grant lines of credit to SMEs for a total sum of 352 million euros; which it is hoped will mobilise investments for the sum of 6 billion euros and benefit almost 36,000 companies.
• Secondly, we must persevere with responsible fiscal consolidation that is compatible with economic growth.
• And thirdly, we must continue to drive trade as a source of growth and job creation.

My government has always advocated an open and regulated trade policy, based on the fact that trade is an essential element for growth and employment. That is why I believe that Europe, which is the leading trading power in the world, must continue to be an economy that is open to the world, because that means growth, jobs and prosperity for people.

This has been Spain's experience over the course of history; when it has looked overseas, Spain has always grown and created jobs. And in the last few years, we have managed to achieve something very positive - for the first time ever, Spain has accumulated four straight years with a foreign trade surplus. That means opportunities, growth and jobs, and that has greatly contributed to the recovery of our economy.

For that reason, I am very pleased that the European Council has reiterated the European message in support of opening up trade abroad. Beyond a mere political message, the European Union is making progress in this area, with the signing of new trade agreements.

At this European Council, we have welcomed the ratification by the European Parliament of the trade agreement with Canada. This agreement offers a great opportunity for Spanish companies. It means, from the outset of its application, the elimination of 98% of the customs tariffs on our exports to Canada, which amounted to 2.3 billion euros in 2015. Furthermore, at the request of Spain and Portugal, the Conclusions of the European Council expressly contain the intention to press on with the negotiations of the Association Agreement with MERCOSUR and the update of the trade agreement with Mexico. A new opportunity is opening up this year, in 2017, since Latin America is looking towards Europe more now than ever.

Honourable Members, I will now move on to the subject of immigration.

I firmly believe that this is a challenge that will be with us for some time. We must have strategic patience, intelligence and generosity. The principles that must prevail in our efforts are dialogue and cooperation with the countries of origin and transit.

The Maltese Prime Minister, who presides the European Union at this time, as you are aware, has presented a report tracking the Conclusions of December's European Council. This contains the initial actions that have been put into practice following the Malta Summit in February this year. There we agreed on a raft of specific actions to manage migratory flows in a more suitable manner to avoid the dramatic loss of life in the Central Mediterranean.

The need to control this route had already been pointed out, as I am sure you remember, in the Conclusions of the European Council in December 2016. They stressed the importance of strengthening the external dimension of migration in general and, in particular, the association frameworks that could affect this route. Similarly they urged measures to be taken with short-term effects, such as strengthening support for the Libyan Coast Guard and fostering the return of illegal immigrants to their countries of origin.

At this time, the Central Mediterranean is the focal point of migratory concern. In that regard, we are supporting the actions taken in Libya and in its neighbouring countries. However, Spain considers that it is also necessary to continue attending to the situation in other areas, such as the Western Mediterranean route.

Honourable Members,

In another scheme of things, we have also valued the new security and defence initiatives, without losing the perspective of what we have achieved together since the EU Common Security and Defence Policy was set up. Since the very outset Spain has placed itself at the forefront of the European construction of defence policy. I would remind you that our country has taken part in all the military missions undertaken by the European Union, including the six missions under way at this time. And moreover, we believe that this is an area in which a lot more progress can and should be made, because the international situation requires this.

Lastly, I wish to highlight the importance of including in the Conclusions from this European Council the full commitment from the European Union to support Member States in guaranteeing their internal security and in the fight against terrorism. In this regard, allow me to remind you that on 11 March we commemorated the European Day in Remembrance of Victims of Terrorism. Spain has placed this issue, which is of vital importance to us, on the agenda of both the European Union and the United Nations. We must continue to make progress through the EU on the efforts we make to homogenise attention for victims, affording them the dignity they deserve and highlighting the importance of their story in the fight against terrorism.

Honourable Members,

So far I have spoken about the European Council on 9 March; I will now move on to the debate that took place on the 10th, on the future of the European Union at an informal meeting which, as I said at the start, excluded the presence of the United Kingdom.

As you know, on 25 March we will commemorate in Rome the 60th anniversary of the signing of the European Economic Community and EURATOM Treaties which, together with the European Coal and Steel Community Treaty, signed in 1951, constitute the founding texts of the European construction project.

The declaration we agree on in Rome must be capable of marking a turning point and sending out a message of encouragement, confidence and unity regarding our future. Spain has been working on this in recent months: with Southern European countries in Lisbon on 28 January; then, at a meeting of the 27 in Valletta on 3 February, and lastly, with France, Germany and Italy in Versailles on 6 March and, as I already said, on 10 March. Furthermore, we consider that the White Paper presented by the President of the European Commission on 1 March offers a useful contribution to this debate.

I believe that in Rome, the people of Europe must fundamentally make three ideas clear: first, that the European Union is a success story; second, that the priority in the near future must be to attend with greater intensity and more effectively to the problems of our citizens, and in this regard, the "road map" outlined in Bratislava undoubtedly constitutes a good base; and thirdly, we must speak about the future which, in my opinion, revolves around more and better integration between the different countries that make up the European Union. I will now outline these three ideas in more detail.

Honourable Members,

In the opinion of many people, the European Union is a success story and it is so at all levels, although there are some who would try and blame all their woes on the EU. But we should remember that Europe, since the Treaty of Rome, has gone through the longest period of peace and prosperity in its history. In the 60 years prior to the Treaty of Rome there were two world wars in Europe, whereas the 60 years since have seen the longest period of peace in the history of our continent.

Nor should we forget that the European Union is the region of the world with the most democracy, with the greatest respect for the individual rights of people, for human rights and for the rule of law; it is the region of the world with the highest level of well-being; it is, together with the United States, the leading global economy; it is the strongest trading power in the world; it is a cultural and tourism powerhouse of the first order; it is the region of the world that most attends to individuals, and there you have our public pension, healthcare and education systems to prove that, with very high levels of legal certainty, protection for consumers and the promotion of the rights of workers and social rights.

Let me thus summarise: the European Union is a success story, which is why everyone wants to come to the European Union. And because it is a success story, and although there are those determined to say it isn't, we must reiterate this over and over again and then again in Rome.

The fundamental goal, based on this initial premise, is to preserve and build on all these achievements, which requires resolving the challenges facing us nowadays. The upheaval caused by the worst economic-financial crisis in recent decades; the rise in populism and nationalism; the re-emergence of protectionist tendencies; the challenges of globalisation; the demographic decline, as well as the technological-digital revolution, mean it is necessary, as an illustrious member of this House said on another occasion, "to pause at the crossroads before continuing on our way".

Honourable Members,

I will turn now, following on this idea, to explaining the second of the statements I made at the start of this part of my speech. We must, as well as being aware of what this is and has meant for the European Union over the last 60 years, make an additional effort to be more effective and resolve the problems that concern our citizens more quickly. This is the second idea I have been advocating over the course of the meetings I mentioned earlier and this is what the 27 countries discussed at the informal Bratislava Summit in September 2016, where we undertook to make progress in three priority areas:

- Firstly, migration and controlling our external borders. I won't go into detail here; for the time being I just want to point out that any immigration policy that seeks to be fair and, in addition, effective, because both elements are necessary, must be carried out in the countries of origin and transit.

- Secondly, security, which is one of the main concerns of our citizens. To achieve greater security, we must improve cooperation in the fight against terrorism and strengthen the common security and defence policy. This is the second main objective after the first, which is migration and controlling our external borders.

- The third main objective is economic and social development. Our third main goal, that of all European countries, must be, and indeed is, economic growth, job creation and maintaining the pillars of the Welfare State, that is, pensions, healthcare and education.

We identified several specific measures on this issue in Bratislava.

- Firstly, extending the European Fund for Strategic Investments (the Juncker Plan) to stimulate investment and employment. In Spain, as I said before, this has worked very well.

- Secondly, strengthening the strategies being implemented to complete the single market, in particular in the fields of energy, the digital agenda and services, which are of greatest interest to Spain. As you will have heard me say on many occasions, I consider the strengthening of the European internal market to be a priority for Spain. An effective internal market involves making our economies more competitive and capable of growing more, in a sounder fashion, and of creating jobs.

- Implementing a sound trade policy based on rules, that harvest the fruits of open markets whilst taking into account the concerns of our citizens.

- Extending the support of the European Union to Member States in the fight against youth unemployment and stepping up programmes aimed at young people, such as the Youth Employment Initiative and new European Commission initiatives, such as the European Solidarity Corps for volunteer programmes; and strengthening Erasmus programmes, that can also encompass vocational training programmes.

We have specifically addressed many of these issues, as I have said, at this European Council and we must continue addressing them in the future.

Honourable Members,

My first assertion on the future, Europe is a success story; secondly, it is important to be effective in tackling the main concerns of European citizens and, finally, the European Union must look to the future and set out a "road map" to state where we are heading. And for me, looking to the future requires to talk about more and deeper integration.

I believe that Europe must look further afield at this time because, whenever Europe has looked further afield it has enjoyed the finest periods in its history. I also believe that Europe must integrate more with all those others who wish to do so.

The areas in which we can work more on integration in the future are fourfold:

- First, foreign policy and defence;

- Second, immigration policy and border control;

- Third, working hard together on the issue of internal security and the fight against terrorism;

- And fourth, extending the Economic and Monetary Union.

I would like to make a few comments on this issue, although we are undoubtedly talking about decisions that will take a considerable time to adopt.

The Euro is undoubtedly one of the main achievements of the European Union. It represents, for millions of Europeans, the means of travelling, trade and investing in Europe without being subject to barriers resulting from the use of different currencies. And we must ensure that the Monetary Union works efficiently. To do so, we must make progress in various areas:

- Firstly, and this must be done quickly, I believe that it is necessary to complete the Banking Union. The Council is working on the creation of a Single Deposit Insurance System. This system would ensure greater protection for the bank deposits of citizens throughout the European Union and greater strength and stability of our banking system. That is why my government firmly backs this project and I trust that progress will soon be made.

- Secondly, it is essential to enhance the coordination of economic policies so that our economies can become more competitive and operate better as part of the Euro system. This requires structural reforms of all the Member States, such as those that have already been applied in some countries, including ours, in recent years and also requires extending the Single Market. All of that, in the end, will be beneficial to our citizens.

- And thirdly, when there is greater coordination of economic policies, we must move towards a Fiscal Union. Ultimately, this means:

• A genuine European budget, with sufficient capability to lend support to countries that, at any given time, are going through a complicated economic situation.
• Also the possibility of issuing debt on a joint basis - Eurobonds - such that we can benefit from the best financing conditions, which would lend support to our debt through a European Treasury rather than a national Treasury.

I am aware that this is an ambitious vision, but I believe that we must be clear where we want to head for and Spain is clearly ready to move forward with those others wishing to do so.

Honourable Members, I will draw to a close now.

Europe's history is one of civilisation, the tale of what we have built up over centuries on European soil, despite our historical discord, because we felt it was worthwhile, not so much to live better, but rather to understand the world and society better, and the men and women that make it up.

Today, the European Union enshrines, more than anywhere else in the world, the old dream of emancipating Humanity from the chains of discord, abuse, ignorance and poverty.

Being a member of the European Union is a privilege that many countries would like to share. The Spanish people do not need convincing of this because Europe is not alien to us. We consider it as an extension of our own soil and of our motherland.

We are not just one more member of the EU, but rather one of the largest members because of the size of our territory, our people and our economic weight. And in addition to that, the pride of being one of the countries which, due to our culture, our tradition and our history, has contributed and continues to contribute the most to forming the European spirit.

In Spain, we had the good fortune that our recovery of democracy coincided with our membership of the European Union, which allowed us to enjoy the simultaneous boost provided by both.

As you will all remember, we asked to join the EU in 1977, negotiations began in 1979 and we signed the Accession Treaty with the European Economic Union in 1985. The giant leap that Spain has taken in these last 30 years is inseparable from our participation in the European Union. We were offered a great opportunity and the Spanish people knew how to take this chance; not only in terms of well-being, in economic development and in infrastructures, but also in the extension of our mental frontiers, the enrichment of our exchanges and our experiences; in short, the extension of the horizon of all the people of Spain and multiplication of their opportunities. This is even truer for our young people. They know no other circumstance because they have been born and grown up in a democratic and European Spain.

So, it is important to us that the European Union becomes stronger, develops and offers all the benefits that it is capable of giving. That would be good for Spain, it would be good for Europe and it would good for the aid that Europe can provide to the rest of the world.

Given its importance to us and given that it is decisive for our future, we are under a duty that we must comply with: to ensure the success of the European Union.

At no time has the role of the Spanish people in Europe been passive, distant or uncommitted. From the very outset, we got involved in this common enterprise until we became one of its leading players. On three occasions, the President of the European Parliament has been Spanish and on another three occasions the President of the Council of the European Union has been Spanish.

We want to guarantee the success of an enterprise that we are jointly responsible for and, moreover, supportive of, because what happens to the whole or to any one member affects the Spanish people, and vice versa.

We thus have a duty to contribute to the consolidation, strengthening and strong progress towards the future of the European project. That is why it is so important for the Spanish people to show our unity in this area.

In this case, as I said before, we must stop looking at Europe as another heading in our foreign policy. You have heard me say this before, here in the Lower House. Europe must increasingly be an internal question, a task that concerns us all in our own homes, inseparable from the well-being of each and every one of today's and tomorrow's Spaniards; a home that makes us greater, a project that will alter all our domestic plans, from education to the development of our companies, from social security to the courts of justice. United to sustain the European Union and also united in the face of the inescapable need to adapt to a project of this scope and magnitude in the best possible way.

In short, Honourable Members, since 1985 Europe has been a great source of opportunities for all the Spanish people. It remains so and we want it to increasingly be so in the future; in this future that we wish to reach with a more advanced project, a more united, sounder Europe with a more competitive economy that benefits all Europeans and a model of society that stands as a benchmark to others.

For our part, the people of Spain will not waste time or squander opportunities. We want to count on Europe and we assert this decisively, which is tantamount to saying the people of Europe can count on Spain because, I repeat what I said before, for all the Spanish people, for everyone and, above all, for those who are already heading in tomorrow's direction, the ideas of Europe, of Spain and of democracy are inseparable.

Thank you very much.