Speech by President of the Government at inauguration of conference on infrastructures entitled "Connected to the future"

Madrid

Madam Vice-President of the Government, Mr Minister for Public Works, Mr Government Representative, public officials, ladies and gentlemen, dear friends.

First of all, thank you all very much for attending; it makes me feel very honoured.

For me it is very satisfying to take part in the inauguration of this conference on infrastructures in Catalonia. We are talking about a decisive factor in improving the competitiveness of the economy, in generating economic growth and creating jobs, and also in improving the quality of life of people. In short, infrastructures improve the economy and people's lives.

Ladies and gentlemen,

I won't go into detail about the issues that will be commented on here during the course of this morning, but I would like to take this opportunity to make a few reflections on the situation of the economy in Spain and in Catalonia, and on our commitment in this regard.

As you are all aware, we are now putting the worst economic crisis in our history behind us:

• Spain suffered five straight years of recession, something that, quite simply, had never happened before.
• During that time, 10% of national wealth was lost in GDP terms.
  • 3.4 million people lost their jobs.
• 70 billion euros in revenue were lost - something very revealing and significant as to what happened during this period - which might not seem to be a very high figure, but it is no less than 11 trillion pesetas in old money.
• Part of the financial system was on the verge of bankruptcy.
• We suffered the threat of a bailout for many months.
• The risk premium went through the roof - if you will pardon the expression.
• The public authorities found themselves in a situation in which it was literally impossible for them to be financed in the markets. Nor was this possible for companies.
• The Spanish economy had accumulated all sorts of imbalances and suffered from a very serious lack of competitiveness.

That is what we found ourselves with and what many of you suffered in your own companies and businesses. You are all fully aware of what we had to do in response

• The most pressing issue was to avoid Spain having to be bailed out. That would have been the worst thing for everyone. We managed, with a lot of hard work, to preserve our economic sovereignty and that is the root cause of the strength with which we are coming out of the crisis, something that has not happened in other countries that did have to be bailed out.
• Our second mission was to generate confidence in order to receive financing at a reasonable price, and also to attract foreign investment, recover the image of our country and lift the spirits of economic agents once more.
• To achieve that, we had to undertake a plan to reduce the public deficit which stood at the figure of 9.3% in 2011. By the close of 2016, last year, this figure stood at half that, at 4.5%. Meeting this commitment with Europe has been, as you know, anything but easy.
• Furthermore, we undertook an extensive raft of structural reforms to make our economy competitive once again. As you are well aware of these reforms, I won't repeat them. I would simply mention, because of their importance, the labour reform, the re-structuring of the financial system and the energy reform.
• In parallel to all of this, we had to avoid the bankruptcy of some of our autonomous regions, which had no access to the financial markets. We set up several liquidity instruments that allowed them to maintain their public services and even, in some cases, to pay their public workers. In the case of Catalonia, these liquidity instruments amounted to 63.77 billion euros, money that was allocated to finance debt maturities, pay the annual deficit and pay suppliers used by the government authorities. As a result of this operation, the Regional Government of Catalonia, which was paying as much as 7.75% interest per annum to service it its debt - remember the 'patriotic' bonds - is now paying 0.8%. The saving in servicing debt amounts to several billion euros.

So, the results of the way things were handled are clear and well-known by everyone:

• Three straight years of economic growth: 2014, 2015 and 2016.
• We are the European country to enjoy the fastest rate of growth and to create the most jobs, at least 1.5 million in three years, and this trend is being maintained, and indeed must be maintained. Also remember that in February this year, there were 580,000 more National Insurance contributors than in February last year.
• No-one now talks about the risk premium or of bailing out Spain. We easily obtain financing in the markets, sometimes even with negative interest rates.
• Credit now flows normally, injecting new life into the productive economy of the country.
• Gains in competitiveness can be seen in the unprecedented figure in our economic history of posting four years with a back-to-back foreign trade surplus. And what I say is particularly well-known by the Catalan companies which have always been the spearhead of our foreign expansion and which have done things very well during this crisis. The foreign trade sector and exports have been decisive for overcoming the toughest moment of this crisis.

In short, ladies and gentlemen, things have changed, things have changed a great deal and things have changed for the better. But that is all history, what is important now is what we must do, which, in my opinion, is the following:

• Continue with fiscal consolidation policies. We mustn't drop our guard or repeat what happened between 2007 and 2009 in Spain when we went from a 2% surplus to an 11% deficit in just two years. We cannot allow that to ever happen again. It now falls to us to meet the target of 3.1% agreed with Europe for 2017 and then ensure it falls below 3% in 2018. A significant portion of the confidence and credibility placed in our country depends on this being achieved.
• Secondly, we must not undo the reforms undertaken, particularly those that have proved to work. Undoing the reforms is tantamount to undoing the recovery.
• Thirdly, we must not become complacent. We haven't finished our task yet. We must continue with reformist policies and gain competitiveness in all sectors. The world is changing every day and we cannot afford to be left behind.
• Lastly, the fourth point, we must not forget those who struggled most during the crisis and those who are not yet reaping the benefits of the recovery.

I repeat; we must not undo the reforms, become complacent or forget. We cannot afford to make any of these three mistakes at this decisive time.

We have a great opportunity ahead and, if we do things well, if we concern ourselves with what is important and don't lose sight of the priorities, then the possibility will open up ahead of us to enjoy a long period of economic growth and prosperity.

And this leads me on to the issue that has gathered us here today in Barcelona - infrastructures - which are, as you know, one of the most powerful instruments for improving a country's economy.

Investment in infrastructures translates into employment and opportunities for everyone. Boosting a country's competitiveness, promoting its territorial structure, fostering social cohesion, facilitating accessibility and the connectivity of companies and consumers all improve the quality of life of people and this investment is an effective expense in ensuring sustainability in the medium and long term.

Ladies and gentlemen,

I want to say something that sometimes we do not say enough: our infrastructures are a source of pride, because they are the best in Europe. We are sometimes not aware of what we have; we only pay attention to our deficiencies, which is all well and good as long as we are also aware of the good things we do have and our infrastructures are among these.

Now that we have overcome the worst of the crisis, now that we have recovered our international credit and now that we are in a position to meet out fiscal consolidation targets required by our membership of the EU, we can give a new boost to investment in necessary infrastructures. We can now do more and we can continue to do more things to the extent that the Spanish economy consolidates its recovery. We are going to do this throughout Spain which means here as well, in Catalonia.

The first thing I want to underline is that we are not starting from scratch, and you have just seen this. A lot has been done in very difficult times for the public accounts and the results are out there to be seen. By way of example, I would remind you - we have just seen this on a video and you are well aware of this - that Catalonia is the only region of Spain with AVE high-speed rail links between its four provincial capitals and that over 14 billion euros have been invested to bring high-speed travel to the border with France.

We are going to continue to invest in infrastructure. I will try not to bore you with figures and just outline the key issues. I will start with railways, because these infrastructures take up the lion's share of the planned investment.

One of the main priorities will be the Rodalies, the railway service that is closest to the people, since 400,000 people use these services every day.

The new plan provides for a total investment of almost 4 billion euros leading up to 2025. Of this amount, 1.88 billion will be invested between now and 2020. Over the second four-year period, from 2021 to 2025, we will allocate a further 2 billion euros.

My personal commitment is for this plan to be realistic, viable and verifiable in all its stages. Our first step will be to coordinate this plan with the different tiers of government and public authorities in order to work together and agree how to implement this plan. We are aware of the need to make a special effort. This will be done and results will be achieved.

The investment in the Mediterranean Corridor will be another priority of this legislature. This is an economic, political and social priority because it is a key public works project that will modernise the country. Even during the years of the crisis, we made an investment effort in this infrastructure. Between 2012 and 2016, during an extraordinarily difficult period, the Budget provided for significant sums to be invested in the Mediterranean Corridor.

This Corridor is a multimodal road and railway infrastructure project that will connect the main logistics hubs, intermodal terminals and production centres around the Mediterranean. It will connect companies, ports and airports. It will bring together the nine ports and 11 airports on the Mediterranean, from Algeciras to the French border into a network.

Not long ago, we proceeded to set up, as we were asked to do by the Catalan authorities, the Mediterranean Corridor Coordinator, a figure that will decisively contribute to its effective development.

We are now working flat-out to start tests on the stretch between Vandellós and Tarragona in the first quarter of 2018. The investment in this stretch amounts to 667 million euros and, when in service, will reduce travel times between Barcelona and Valencia by more than half an hour, thus meeting a major requirement from society.

Last Sunday, we finalised the works on the stretch between Valencia and Castellon, and tests have begun on the start-up of this stretch. As far as the stretches in Catalonia are concerned, I wish to highlight that works have been awarded on almost all the stretches and that we will shortly also award the stretch between Castellbisbal and Vilaseca. We expect the three Catalan stretch of the Corridor to be ready by the spring of 2020.

Also on the subject of railways, I wish to highlight the shuttle train that will link Barcelona-El Prat Airport with Sants railway station. The first stage of this project has already begun, with an initial investment of 285 million euros. This shuttle train will mean that El Prat Airport will be one of the airports with the best links in Europe. In a 20-minute trip, it will be able to transport between seven and nine million passengers a year between Terminal 1 of El Prat Airport and Sants railway station.

Ladies and gentlemen,

Spain is a global tourism powerhouse, with 75 million inbound tourists visiting us each year and Catalonia - particularly Barcelona, but all of Catalonia in general - is the Spanish region that receives the most inbound tourists. This destination capability would not be possible without the four high quality airports located here, particularly noteworthy being, as you know, Barcelona-El Prat Airport.

El Prat and Adolfo Suárez-Madrid-Barajas airports have just been acknowledged as the best airports in southern Europe. This is a fact that is good to know but, having said that, we want to continue improving them. We will continue to invest in airports in Catalonia. In the period 2017-2020, the planned investment amounts to 200 million euros, to which can be added a further 40 million to be invested by ENAIRE in air navigation projects, given that 30% of all Spanish air traffic is managed in Catalonia.

The roads in Catalonia will also receive an investment boost during this legislature. We are going to allocate 850 million euros to this between now and the end of this legislature. The Ministry of Public Works will give priority to investment in the Autovía Orbital ring-road, the B-40, the N-340, the N-II and the N-240 between Lleida and Les Borges Blanques.

As I mentioned to you a moment ago, you are driving exports at a fast pace. This is key to the future of our country. Well, the State ports, as you know, play a key role in the logistics chain and foreign trade in Catalonia, since they are maritime gateway for these exports. During this legislature, we want to make a strong investment in ports, amounting to 587 million euros.

I don't want to bore you. I only want to highlight the broad strokes of our commitment to Catalonia, an investment that amounts to some 4.2 billion euros in infrastructures, transport and housing between now and 2020. In other words, more than 1 billion euros a year in infrastructures in Catalonia.

We are doing that now because we can, in the same way as we can now take key decisions to improve our position in Europe and around the world. One of the most important goals at this time is to attract the new headquarters of the European Medicines Agency to Barcelona, which is leaving the United Kingdom because of 'Brexit'.

We want the new headquarters of the European Medicines Agency to be located in Barcelona, and we know that this great city is fully capable of effectively housing the 800 highly specialised professionals who work for this organisation.

The pharmaceutical industry is one of the main assets of the Catalan and Spanish economies. It is an industry that promotes R&D+i, that is responsible for more than 20% of total investment in R&D+i and that is a driver of job creation. And job creation is, and will be for a very long time, one of the main goals in our country.

Ladies and gentlemen,

Spain is a great country and Catalonia has always been at the forefront of our progress. We want this to continue to be the case and we are willing to do our very best to ensure that this is the case.

I will draw to a close now.

This conference responds to a very reasonable goal of being "Connected to the future". I didn't want to end this speech without dedicating a few minutes to the issue that most concerns us all. We are all concerned that some people intend to disconnect, not only from the future, but also from the reality of Spain and Europe, from the law and from dialogue.

In a democracy, the boundaries for dialogue are set by the law, and, for that reason, our political response will neither overlook the law - which would be foolish - nor dialogue.

We offer a response that takes into account all the people of Catalonia, the priority target of which is to ensure that Catalonia does not come to a halt. Between us all, we have managed to overcome a tremendous crisis and we are now in a position to ensure a better future. We will not squander this with impoverishing enterprises. The goal is to push on with the recovery under way, rather than slow it down, because the main task of a governor is to solve problems not create them.

You, as entrepreneurs, are well aware that the greatest risk we face, the factor that could put the brakes on our recovery and squander the decent pace of job creation we are enjoying, is political instability. You are aware of the erosive effect on economic activity of so many and such vain efforts to impose political instability. You measure every day just how delicate the material is that weaves together confidence and how costly it is to repair this when it breaks. Since you appreciate this, you can assess just how important it is to work to build bridges, and I don't only mean infrastructures when I say that.

In my opinion, the main task of a good leader is to try and be effective in attending to the real problems of people and these real problems start by having a job; by changing jobs when the first one does not meet your expectations; by continuing to be able to give your children a good education and by continuing to have good healthcare cover when you need it; and after a lifetime of work, by being able to have a decent pension guaranteed when you retire.

These, not others, are the real problems that our citizens expect their political leaders to resolve.

Let's take advantage of this new stage of the recovery to bring benefits to everyone. Let's move the focus and make our very best efforts to work together thinking about everyone. Let's look for common ground that unites us, and we have a great deal of things in common, and connect ourselves to a European future of prosperity and well-being.

That is important to me. I want to see a prosperous Catalonia in a cutting-edge Spain anchored to a modern and competitive Europe.

Just this weekend, we have celebrated the 60th anniversary of the Treaty of Rome. 60 years have now passed since the new Europe was founded. We approved a political declaration at a time in which there are groups in different countries of the European Union that are calling into question everything that has been done since the Treaty of Rome was signed in 1957. Some people called for this political declaration, among other things, to place a value on what the European Union has become.

The European Union is the greatest space in the world in terms of democracy, liberty and human rights. The European Union today accounts for almost 25% of the global economy and 25% of global trade. The European Union is the region of the world where people are best attended to. Nobody else has a universal public pension, public healthcare or education system like in the different countries that make up the European Union.

Let's showcase what is good and what is positive. Why do so many people come to Europe? Why do 75 million people visit Spain each year? Why does everyone want to come to Europe, from every other continent around us? There must be something good here. It is all well and good, as I said earlier, to be aware of our deficiencies because, if not, we wouldn't be able to remedy them, but it is also good to be aware of some of the good things we have.

So, regardless of all those who only want to stress everything that is going badly, I would ask those of you who want to work loyally to the benefit of your country to point out and highlight those things that are also going well.

We, the Spanish people, in all honesty, appreciate our membership of the EU, perhaps because it was so costly to us to achieve that. The first time we asked for membership was in 1962; quite clearly it was not possible and the attempt was unsuccessful. Sometimes, one appreciates more what it is difficult to gain and, for that reason, I believe that the majority of us want to continue bringing together the diversity of the people of Spain and, united, head up this successful project that is the European Union.

With this goal in mind, we must be clear that concord and common sense are going to prevail, because that is what our society demands. I want to ask for your help to win, between us all, this battle over moderation, responsibility and common sense. I would ask for your help and I offer ours, because recovering this concord is very important to us all.

I ask from you and offer you sensible dialogue on the issues I have spoken about in pursuit of the general interest and common good of all Catalans. It is time to rebuild bridges, repair cracks and look to the future. I ask from you and offer you dialogue and agreement for connecting us together to a better shared future.

Thank you very much.