Rajoy congratulates himself on taking Spain out of the crisis without a bailout

PM uses State of the Nation Address to announce measures aimed at boosting growth

Mariano Rajoy during Tuesday’s Sate of the Nation address in Congress.
Mariano Rajoy during Tuesday’s Sate of the Nation address in Congress.PIERRE-PHILIPPE MARCOU (AFP)

Spanish Prime Minister Mariano Rajoy delivered the final State of the Nation address of his current term of office on Tuesday, during which he congratulated himself on turning the nation around from the situation of near-bankruptcy he encountered when he came to power in December 2011 without the need for a European bailout.

The Popular Party leader said he would use the final part of his mandate before general elections this fall to speed up growth, announcing new measures to “alleviate the situation of the middle classes,” such as tax breaks to encourage more flat-rate permanent contracts, extending welfare checks for families, cutting judicial fees, and introducing a “second chance” law to encourage households to pay off their debts.

Rajoy announced tax breaks to encourage permanent contracts, and a “second chance” law to help households pay off debts

So optimistic was the prime minister’s address that he said the next challenge would be to create three million new jobs. “That must be our objective, because it is attainable if we don’t fall foul of any blunders,” Rajoy said. “If we are able to maintain the pace of growth, and we fulfill forecasts that we can grow well above two percent a year, we might well be able to say we have a million net jobs within reach between last year and this year. If we don’t let things go astray, we can aspire to create over half a million jobs every year. Three million jobs to protect ourselves from eventualities and to continue growing in terms of standard of living and security.”

On several occasions in his address to Congress, Rajoy made reference to how he had managed to resist pressure to request a bailout for Spain. “The easiest thing would have been to bow to the pressure, but also the most unfair, and we refused to get out of the crisis at the cost of Social Security or pensions coffers.” However, the PM made no mention of the bank bailout Spain applied for in 2012, which also had conditions attached to it.

Rajoy predicted that the Spanish economy would grow 2.4 percent in 2015, 0.4 points higher than previous forecasts, pointing to figures such as an increase in consumer spending, improved exports and favorable prices, which would, he claimed, create more than 500,000 jobs this year.

“The state of the nation is that of a nation that has woken up from a nightmare, that has bailed itself out, recovered prestige, is attractive to investors, has reorganized how it works and is growing in terms of consumer spending and investment,” he told Congress.

The prime minister concluded his speech by recognizing what is owed to the Spaniards who have made sacrifices during the crisis and how he would pay them back in the remainder of his current term.

The state of the nation is that of a nation that has woken up from a nightmare” Prime Minister Rajoy

He said he would seek to put a cap on the reforms and deliver an end to the crisis, announcing measures to encourage jobs – such as new flat-rate permanent contracts with lower social security contributions – and new tax breaks: the first €500 of salary earned from the new contracts would be exempt from income tax.

He said he also planned to extend welfare checks to single-parent families with two children, as well as announcing a “second-chance law” to allow families to restructure their debts through an extrajudicial payment agreement.

Rajoy also mentioned an unspecified reduction to the judicial fees that he himself created in 2012 in the face of protests from all sectors of the judiciary. A Constitutional Court appeal over the fees is still pending.

The PM only touched on the subject of corruption to explain that it was his priority, making no mention of the massive Gürtel kickbacks-for-contracts scandal that has engulfed his Popular Party. He referred to the anti-graft measures he has adopted during his term of office, some of which he announced two years ago and are still awaiting their passage through parliament.

There are half-truths, lies and big lies” Socialist congressional spokesman Antonio Hernando

The optimistic tone of the Spanish leader’s speech drew widespread criticism from opposition lawmakers. “The prime minister has come to say that there is a spring-like and cozy climate,” said Socialist congressional spokesman Antonio Hernando. “There are half-truths, lies and big lies. It is a big lie that there was no bailout or cuts and that he has fought seriously against corruption. It is the view of […] a Spain that doesn’t exist. It was an exasperatingly triumphalist speech.”

Josep Antoni Duran Lleida of the CiU Catalan nationalist bloc concurred: “It’s true that it is better in macroeconomic terms, but it is very painful to hear only the triumphalism and the increase in poverty to be forgotten, of those who died before receiving the dependence grants, of those young people who had to leave the country...”

“It was in keeping with an election rally,” summed up José Luis Centella of the Plural Left grouping. “He spoke to us about an unreal Spain, which only exists in his own world. […] It’s shameful that Rajoy thinks corruption is something from another world.”

According to Rosa Díez, leader of the centrist party Union, Progress & Democracy (UPyD), the prime minister “did nothing but lie, when he spoke about pensions, about education, about poverty, about energy, both in terms of what he has done and in what he is going to do.”

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