Rajoy outlines 2017 plan, hopes for minimal Brexit disruption

Mariano Rajoy [Shutterstock]

Spanish Prime Minister Mariano Rajoy has told the presidents of Spain’s autonomous communities that improving the country’s welfare state could be possible but will depend entirely on getting back to pre-economic crisis levels. EURACTIV Spain reports.

Rajoy presented his macroeconomic overview for the year to the presidents, gathered in Madrid, at the 6th Conference of the Presidents.

His speech, as well as those of the presidents, were made behind closed doors but government sources have reported on Rajoy’s general guidelines at least.

As such, it is predicted that Spain will recuperate the 10% of its GDP that was lost during the crisis. In addition, the creation of 400,000 new jobs is forecasted, which would bring unemployment down to 17.6%.

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Hit by a severe crisis several years ago, Spain’s banking sector has recovered, but at a cost, as thousands are laid off and it struggles to get rid of toxic assets.

Rajoy insisted that revenues would continue to increase this year but that it would be difficult to foresee them reaching their 2007 levels.

As such, revenues are expected to be €20 billion lower than ten years ago, while spending will be €40 billion more than what was recorded a decade ago.

The prime minister also insisted that there will be more jobs and provided an overview of how the government will be spending its money on social issues.

The breakdown included 28.3% expenditure on pensions; 14.2% on health; 9.3% on education; 4.4% on unemployment; and 6.5% on other costs related to social matters.

For Rajoy, the great challenge is to maintain the country’s social welfare system and “if possible improve it”.

The Spanish PM also highlighted a number of obstacles that the Spanish economy will face in 2017, including Brexit, an increase in protectionism (he did not explicitly mention Donald Trump by name), the rising price of oil and energy, and a potential increase in interest rates.

Regarding Brexit, he added that the negotiations have to actually start first but insisted that the objective is for as little to change as possible.

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The Spanish government intends to broker a deal with the United Kingdom under which the outgoing EU member would pay the healthcare costs of the British diaspora living in Spain. EURACTIV Spain reports.

It is further proof that Spain will seek to maintain as good a relationship as possible with the United Kingdom, given that that is where Spain invests most of its money and that 100,000 Spaniards live in the UK; 300,000 Brits call Spain home.

He also highlighted Spain’s European spirit and called on the EU to take decisions that benefit everyday citizens, in order to combat rising anti-European political forces.

Rajoy listed immigration, domestic security and youth employment as issues that need the most attention.

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