Press conference by Prime Minister of Malta and President of the Government

Valletta

Mr. Muscat.- Good afternoon, ladies and gentlemen. I wanted to thank the Prime Minister, my good friend, Mariano, for today's visit. I believe we have confirmed the excellent state of bilateral relations between our two countries and the way in which we are strengthening these relations.

We have obviously spoken about the issue of Brexit, which just came under starter's orders a few minutes ago, and also about the role of Malta as a Member State. We have made it very clear that we want a fair agreement for the United Kingdom, but we must also make it very clear that the conditions of this agreement cannot be comparable with those of a Member State. All those who wish to enjoy the benefits of membership must be Member States of the European Union. Meanwhile, we must also ensure that British citizens in Europe and European citizens in the United Kingdom are treated fairly - the ideal situation would be for them not to lose any of the benefits they have today - and we hope that these negotiations will unfold in an orderly fashion.

Today I have held a full and very fruitful meeting with Michel Barnier, together with my Deputy Prime Minister, who conveyed to us an updated version of the format of the negotiations and the preparations for the negotiations that are currently taking place. I believe that Mr Barnier and his team are very well prepared and I also believe that in the next few hours we will issue a joint statement on behalf of the 27 members to respond to the letter from Ms May, and we will have a complete set of political guidelines for the negotiations ready for approval at the summit on 29 April.

I firmly believe that the 27 members will be completely united in this process, that we will be in close agreement and that we must push on with this process such that we not only demonstrate unity but also transparency. I believe that transparency will be very important for establishing our attitude in this process, so that it can also be seen how Europe handles these things, how Europe should carry out this type of negotiation, which must be carried out in a proactive, constructive and transparent fashion, and also in such a way that our basic principles are protected. A consensus exists on the indivisibility of our four freedoms and the fact that the British Government does not intend to remain a part of the Single Market is an acknowledgement in itself. The British Government is already acknowledging this position from the European side. We want a fair agreement, but a fair agreement for both parties, not just for one party.

We are very pleased, as a Member State, at having worked on preparatory issues during our Rotating Presidency, although I wish to stress that there will not be 27 negotiations; there will only be one negotiation, with a single negotiator, who is Mr Barnier. We are carrying out a series of studies to strengthen the negotiating position as a Member State and I am also proud to present an impact assessment, which was commissioned by the Central Bank of Malta, of Brexit on the Maltese economy in the short and medium term. This study was made public yesterday afternoon and I believe it offers an excellent overview of this impact. I believe that this is the way to push on and have a political focus based on scientific foundations, to preserve the unity of Europe and preserve what we have achieved to date as the European Union, which is beneficial for all the Member States.

Once again, Mariano, thank you very much for your visit. We have taken note of all the issues you have mentioned that are sensitive for Spain in relation to Brexit. We greatly appreciate your reflections and we are going to convey them to our colleagues during our Presidency.

President of the Government.- Thank you very much, Joseph. A very good afternoon to everyone.

I want to start this speech by saying that it gives me great pleasure to be here with my colleague, the Prime Minister of Malta. We have coincided on many occasions at the European Council and at certain other meetings that we have held together, but we have never met on a bilateral basis. This is my first visit to Malta, and I have just invited the Prime Minister to visit Madrid and I am absolutely convinced that he will do so soon.
I would just like to make four comments. Fundamentally, we have spoken about the issue that concerns us today and that worries European public opinion as a whole, which is Brexit, but beforehand, I would like to say the following:

• First, bilateral relations between Malta and Spain are wonderful, and I have the total and utter conviction that they will continue to be so in the future. Should it be possible, and I don't know if it is, although in life almost anything is, I am convinced that we could improve them in the near future. Hence, there are no problems with bilateral relations; quite the opposite, what we can see is collaboration on many issues and I would simply like to make that clear in this speech.
• Second, I would like to congratulate the Prime Minister on the success of the Maltese Presidency of the European Union, at a time in which things are not easy, because many events of great political importance have taken place in this first half of 2017. I believe that the Declaration we approved in Rome on Saturday has been very positive. This places a value, in the first place, on what the European Union has achieved since 1957, when the Treaty of Rome was approved; it makes a clear commitment to being more effective in resolving the problems of our citizens and lastly, it clearly states to everyone who wishes to hear it that Europe is increasingly united and that there is a desire by everyone to move towards greater integration in the future. The work that is being done to try to make progress on the Single Market has been very important, above all on digital issues and energy matters; two issues that are fundamental for improving the competitiveness of our economies and for creating jobs which, at the end of the day, is the issue at hand. And I also agree with the efforts being made by the Maltese Presidency on something that is a major priority for Spain: completing the Single Market, specifically the Digital Agenda and the Energy Union.
• Third, on 10 April, we will hold a meeting in Madrid, which is a continuation of those held in Athens and in Lisbon; the latest one in Lisbon, back at the end of January. This will be attended by the Heads of State and Government of Portugal, Spain, France, Malta, Italy, Cyprus and Greece, with two fundamental goals: firstly, of monitoring all the work that is being done in order to negotiate Brexit well and, secondly, to also monitor what is happening or going to happen after the Rome Declaration I mentioned before. I have asked the Prime Minister, as the Rotating President of the European Union, to set out for all the Mediterranean countries precisely how the Brexit issues are evolving at the moment.

Lastly, I would like to make some comments about Brexit.

As you are all aware, and as we have just been reminded by Mr Muscat in his speech, the British Government has officially notified the European Union, in accordance with Article 50 of the Treaty of the European Union, of its intention to leave the EU. I would like to remind you of what I mentioned in the past; while I respect this decision, I greatly regret that it has been taken. I believe that it is not good for the United Kingdom in particular, but nor do I believe it is good for the European Union as a whole.

At any event, the European Union is a community of law; this notification declaring an intent to leave has been made, as established in the treaties and hence, the procedure provided for in these treaties has now been activated today. The negotiation process now begins, which in theory must be finalised within a period of two years; that is, by 29 March 2019. The day after that, as provided for in the treaties, these will no longer apply to the United Kingdom, unless all of the countries of the European Union decide to unanimously prolong these negotiations.

I would like to say that the Government of Spain, in the same way as the European institutions, is ready for this negotiation. We have set up an inter-ministerial committee that has been working on the matter for some time now. And I want to take this opportunity to send out a message of calm, of confidence and of serenity to all Spanish citizens that live in the United Kingdom; and also to all those British citizens, and there are more of them, who live in Spain; to all those Spanish companies that invest in the United Kingdom or that trade with the United Kingdom - I would remind them that the leading destination for Spanish investment in the world at this time is precisely the United Kingdom - and also a message to those British companies that invest in or trade with Spain.

Our top priority, the first, in these negotiations, will be to minimise the uncertainty created for our citizens, our companies and Member States by the decision taken by the United Kingdom. I think that the European Union has very clear what it is doing, and hence, I wish to take this opportunity to send out a message of calm to everyone.

I also want to say that the government will defend, as you would expect, Spain's interests in these negotiations. We want to see a balanced agreement, but we also want, and we said this in Rome, to continue making progress as the EU 27 on the process of European integration which has assuredly been one of the most important political operations carried out on our continent in centuries.

As Joseph Muscat said in his speech, we are going to preserve the unity of the EU 27 in these negotiations. We are well represented by Mr Barnier and he and his team enjoy our full support and trust, and we will work in close coordination. We will also continue making progress on the process of European integration, as indeed I said before.

Lastly, I would like to make three final comments. On 29 April, Mr Tusk has called the Heads of State and Government of the European Union to attend a meeting to draw up the guidelines that must serve and hence, be employed, in these negotiations, and shortly afterwards, Mr Barnier will be given a negotiating mandate so that work can effectively begin.

Second, a meeting has been held in Spain this morning of the Brexit Committee, to study the document presented by the United Kingdom and the Minister for Foreign Affairs will appear in Parliament this afternoon to announce Spain's position.

Lastly, I would like to say that we all intend to make an effort to maintain as close, beneficial and fruitful relations as possible between Spain and the United Kingdom to the benefit of our citizens.

I once again repeat my thanks to the Prime Minister of Malta for his welcome and also reiterate my formal invitation to visit our country.

Q.- María Carou, from Radio Nacional. My question is on behalf of those colleagues that are accompanying the President of the Government on this trip.

I wanted to ask about Brexit. Taking into account that this is an EU negotiation, a negotiation on behalf of the whole European Union, what can the Government of Spain do to minimise, as you said to us, the consequences for those Spanish citizens that live there, and also for our companies?

I also wanted to ask you, President of the Government, about Catalonia. After your visit there yesterday and your announced investments there, do you believe that the citizens of Catalonia and the Regional Government of Catalonia will recover their trust in the Central Government? How will you avoid the anger of other regions for the preferential treatment being shown through these investments?

President of the Government.- In relation to your first question, the most important goal of the Government of Spain and of any government worthy of its name, as you would expect, is for no citizen or company that exports, imports or invests to be affected by these decisions that have been adopted by the citizens of the United Kingdom through a referendum. That is our top priority. Logically, we all want all those Spaniards working in the United Kingdom to be attended by the public education, healthcare and social services systems, in the same way as we believe that the United Kingdom would want all those people living in Spain or in any other country of the European Union to also enjoy, when they need to, these key public services. The same is true for companies.

The case at hand, although of course in a process of this nature - let's not kid ourselves - we cannot say that nothing is going to happen, is for this to generate the minimum problems and difficulties possible. That is the most important issue in these negotiations and that is what is going to keep us busy in the near future.

In relation to the issue of Catalonia, I was in Catalonia yesterday, as I have also been in other parts of Spain, whether to inaugurate infrastructures or to announce, as have other members of my government, some of the investments that will be undertaken. Yesterday I very clearly explained in Catalonia that, now that we have got over the worst part of the economic crisis, and we have now overcome this, we are in a position to build new infrastructures; and I said: throughout Spain, including Catalonia. Don't forget that at this time, to just mention a few infrastructure works, we have the Mediterranean Corridor, which spans various regions, but we also have the whole issue of the high-speed railway to the Basque Country and to Galicia; we have projects in cities, such as Granada and Murcia, and we are also undertaking major works in Extremadura, which will be finalised in 2019.

In other words, we are now in a better situation - because the economy has gradually recovered - than we were five years ago and hence, we can do more things, in both Catalonia and in the rest of Spain.

What is clear is that the government has defended, and will clearly continue defending in the near future, three things: the unity of Spain, national sovereignty and equal rights, and also equal obligations, for all Spaniards, whoever they may be and wherever they may live.

Mr. Muscat.- As regards your first question on the consequences, I would like to comment that there are consequences for everyone. I don't think anyone is immune; there is no antidote to the consequences of Brexit.

I am very interested in the debate at a European level on how to mitigate some of the negative consequences, which are very obvious. There is one consequence that I believe all the countries in the Eurozone are experiencing, which is the real change in the value of the pound sterling since Brexit was announced. This is not directly related to Brexit; rather, it is an indirect effect and, as is clear, it is making holidays in the Eurozone more expensive for British citizens and it is making some products less competitive for Europeans and more competitive for the British people.

I believe that this is the type of debate we must hold. It is not a question of us fixing a set exchange rate or any suchlike, but rather of us looking at the context of these companies and of these situations that will need help in mitigating the consequences and of seeing how they can comply with rules on State aid and other rights.

Q.- Mr Muscat, you have said in recent days that the focus to be adopted by the 27 Member States of the European Union will depend a great deal on the tone of the official letter sent by Prime Minister May. Have you had the opportunity to read the letter from Prime Minister May? What is the tone of the content of this letter? Has it affected, to some extent, the approach you were thinking of adopting in relation to Brexit?

Mr. Muscat.- I haven't read the letter yet. The first reactions we have received from Brussels are that the tone is relatively constructive; I will save my opinion for later. I believe, at the end of the day, that there is a general interest in making progress on these negotiations and in carrying out these negotiations in a frank and proactive manner, and although the schedule is quite tight, the way Mr Barnier is organising everything and if everyone does what they have to do on time - and that includes the Member States deciding on exactly what their priorities are - I believe that we can meet the deadlines. I think that this letter is a good beginning of what is fundamentally a sad date, because I don't believe that anyone is happy about what we have to start today.

Q.- Susana Camacho, from Noticias Cuatro. I have two questions for President of the Government Rajoy on behalf of all the Spanish press. 48 hours before the Budget needs to be approved, do you have enough support guaranteed? At what cost will you acquire this support?

With everything going on in Murcia, President of the Government, I wanted to ask you about the attitude being adopted by Mr Rivera. Don't you think he is pushing the limits a bit? Has the People's Party debated the idea, as a last resort, of removing the Regional President, Pedro Antonio Sánchez, in order not to lose control of the regional government?

President of the Government.- Indeed, on 31 March the Budget will be approved. As I have said on several occasions, we have made progress on a substantial part of this, which is the ceiling on spending, the heading of revenue and the distribution of the budget stability targets among the different public authorities. We already extended the Budget that was in force, corresponding to 2016, but it is obviously important that we are able to approve this new Budget.

Over the course of recent times, we have had many talks; they are being held this very week and the pace of these talks has been stepped up with various political forces. Things are not yet definitive, the Council of Ministers has not even approved the Budget, but I hope that we will be capable of achieving a majority that will allow us to approve the Budget. It makes no sense for a government that has just been invested, following two consecutive elections, to be prevented from approving this.

Hence, I don't want to say that I am an optimist, I try to be a realist, but I believe that the work that is being done will prosper in the end, and hence, Spain will have a Budget. But, I insist, we will see about that because, as is clear, it doesn't only depend on me.

But I also insist that our party has facilitated the approval of the Budget and the ceiling on spending in many autonomous regions, because I believe that Spain is not yet in a position to pull things down or place impediments, but rather we should principally focus on building and taking advantage of the economic recovery which is now clearly under way. After three good years, this will be another good year. The employment figures are proving to be good, I am convinced that the employment and National Insurance contributor figures for the month of March will also be good, as they will prove to be in the coming months. So, we must take this opportunity because opportunities are not always within our grasp.

As regards the issue of Murcia, I have a good relationship, among other things, because it is my obligation. I have signed an agreement with Mr Rivera and his party; logically he has helped us on some important issues. As far as other things go, I respect their decisions, but there is a debate that we will need to have at some point in Spain, which is where the presumption of innocence ends. I believe that it is important for us all to have this clear. Some things are obvious but others are not so clear. But, in short, I obviously respect the decisions taken by everyone and everyone is responsible for what they want to do at any given time.

Q.- Mr Prime Minister, could you specify for us the exact rights that the European Union is going to demand from the United Kingdom in relation to the rights of European citizens that live in the United Kingdom? Do you believe that it is fair for those European that live in the United Kingdom at present to enjoy greater benefits that those Europeans that emigrate to the United Kingdom in the future?

And another question on a different matter. Two years ago you attended a UN summit in Paris, where the world leaders were asked to adopt a legally binding agreement to combat climate change. In relation to this, what do you think about the recent executive order that Donald Trump issued to boost the production of fossil fuels?

Mr. Muscat.- I will start by answering the easy question: the question on the rights of European citizens in the United Kingdom and vice versa, because I believe that it must be made clear from the outset that this is not a negotiation about European citizens, but rather about both European citizens and British citizens.

I believe that it will soon be made very clear that we do not want to punish individuals in these negotiations and that their rights, in an ideal world, must be preserved. I would be breaking our collegiate position if I said what rights it is necessary to negotiate and at what level, because that must be decided on together by the 27 Member States, but as Maltese citizens, we are very clear that we want our fellow citizens that reside in the United Kingdom to maintain their current status; we also want our students to continue enjoying access and the fees that they pay at universities in the United Kingdom, and we also want British pensioners and citizens that live here to have the same services as they enjoy at present. We are going to do everything possible for no-one to lose this status.

But there is a major "but", because this is a giant leap into the unknown for everyone and these are unchartered waters. We have no reference plan which we can use as a base.

As regards the decision by the United States to overturn the policy of the previous administration on climate change, we are obviously not in agreement. Of course, the United States is free to take its own decisions, but in times in which people want leaders, Europe has a great responsibility and we cannot expect others to take the lead and oblige us to follow them, but rather Europe must now take the opportunity to choose the course to be followed in this area.

Thank you very much.