The President of the Government of Spain announces a "new impetus for the country" to prioritise a modern economy, fiscal responsibility and sustainable finances

Madrid

The President of the Government of Spain, Pedro Sánchez, this afternoon closed the 14th edition of the international financial forum 'Spain Investors Day', where he highlighted the "extraordinary resilience and strength" of the Spanish economy in a context of volatility, uncertainty and "unprecedented transformations", which makes it "the time to give a new impetus".

"Spain has more than proved that it knows how to break inertia, that it is capable of defying trends and overcoming the gloomiest predictions, and that it is ready to move forwards on the path of modernisation", said Pedro Sánchez, who anticipated a "new impetus for the country" with regard to the priorities for the new legislature, which include deepening the reformist and modernising agenda, continuing the path of cleaning up the public accounts and boosting sustainable finances. And all this "with full confidence in our human, technological and physical capital".

To achieve this, he stated that the Government will give new impetus to collaboration between the public and private sectors, as well as to co-governance between all administrations, since "the objectives are shared: economic growth and social justice".

This impetus will be given by "a Government of progress, determined and committed to ensuring that Spain continues to move forwards, with a clear project and course, towards a new prosperity based on three pillars: employment, rights and coexistence".

Priorities for the new legislature

The President of the Government of Spain, Pedro Sánchez, attends the closing act of the 14th edition of the international financial forum 'Spain Investors Day' | Pool Moncloa/Borja Puig de la Bellacasa

On the modernisation of the economy, he explained that the three objectives are to achieve full employment, accelerate the digitalisation of the Administration and the reindustrialisation of the economy on the basis of sustainability.

To achieve full employment, the Executive will work with social partners to improve retraining systems and modernise employment services, while the digitalisation of the Administration will be accelerated by automating processes, reducing red tape and bureaucracy with Artificial Intelligence and technology. With the aim of accelerating the sustainable reindustrialisation of the economy, work is already underway on the new electricity grid planning, investments in clean energy will be facilitated and a new Industry Act will be passed.

On the path of responsibility, he pledged to continue the gradual reduction of the deficit from 10.1% of GDP at the peak of the pandemic to 3% this year, and of public debt, which will be reduced by almost 20 points by the end of this year. "We are going to comply with the new European fiscal rules, agreed under the Spanish presidency", he assured.

Finally, on the priority of sustainable finance, he announced the forthcoming publication of a Green Paper on Sustainable Finance and the creation of a Sustainable Finance Council.

Dialogue and agreement

The head of the Executive has defended the fact that dialogue and agreement are the Government's main lines of action. As was already demonstrated in the last legislature, negotiation with social partners, administrations, European partners and political groups led to agreements to approve far-reaching reforms in areas such as pensions, the labour market and reconciling work and family life with social peace.

Family photo of the closing act of the 14th edition of the international financial forum 'Spain Investors Day' | Pool Moncloa/Borja Puig de la Bellacasa

In this sense, he has said that the new phase will continue along the same path: "We are determined to forge new agreements between different parties that will advance the agenda of rights extension and economic modernisation".

As an example, he referred to the negotiation of the decrees validated yesterday in Congress to "materialise reforms agreed with Brussels that will allow us to receive the 10 billion euros in European funds and continue growing and creating jobs" and "continue protecting families and companies" with measures worth more than 5 billion euros. These are in addition to the package of measures worth more than 40 billion euros approved by the government to deal with the adverse effects of the war in Ukraine.

"Extraordinary resilience and strength" of the Spanish economy

Pedro Sánchez stressed that, despite the complex geopolitical scenario, the Spanish economy is showing "extraordinary resilience and strength", having ended 2023 with growth of around 2.4% and with "very positive" forecasts for 2024.

In addition, average annual inflation stood at 3.4% in 2023, more than two percentage points below eurozone inflation, and more than half a million new jobs were created last year.

"Spain has the best forecasts of the five largest economies in the eurozone in three basic aspects such as employment, exports and investment," he said.

Second edition of the European funds from 2026 onwards

The performance of the Spanish economy is partly due to the roll out of European funds. Spain is a leader in the receipt and execution of the NextGenerationEU funds and 34 billion euros has already been activated in calls that have already been resolved, with more than 600,000 beneficiaries, more than half of them companies. To that is added the 94 billion euros from the Addendum to the Recovery Plan.

The President of the Government of Spain, Pedro Sánchez, speaks at the closing act of the 14th edition of the international financial forum 'Spain Investors Day' | Pool Moncloa/Borja Puig de la Bellacasa

"We are going to fight for the European funds to have a second edition after 2026", said Pedro Sánchez, because "Europe needs these resources to tackle the digital transformation and the green transition" in order to "lay much more sustainable foundations in all areas: social, economic, fiscal, financial and environmental".

Spain, "an ideal place to invest".

In this respect, he highlighted the confidence that Spain inspires in international investors, as reflected in the results of the Treasury's public debt issue yesterday, which saw record demand of 138 billion euros.

In addition, he also valued the fact that Spain has an institutional environment that is "highly conducive to foreign investment", given that it is one of the countries with the lowest barriers to investment, according to the OECD. This confidence translates into significant investment attraction. During the period 2018-2022, Spain received Foreign Direct Investment flows of 2.2% of GDP, twice the relative size of those received by France, Germany, the UK or the US.

"Spain is an ideal place to invest," said Pedro Sánchez, alluding to strengths such as the country's "solidarity and civic-mindedness" demonstrated during the pandemic, the talent of its human capital (almost half of young people between 25 and 34 years of age have a higher education degree), and its institutional and democratic strength. "Our democratic institutions are strong and contribute to strengthening political stability, legal certainty and social peace," he stressed.

Pedro Sánchez concluded his speech by urging investors to trust and invest in Spain, "a country that has changed a lot in a very short time, without losing its open, welcoming, creative character, that has left old complexes behind" and "is determined to be part of the locomotive".

Non official translation