Davos Agenda

Sánchez calls for European unity at Davos 2022 - says 'Spain will do its part'

Spain's Prime Minister Pedro Sánchez addresses a plenary at the World Economic Forum's annual meeting at Davos 2022.

Spain's Prime Minister Pedro Sánchez addresses a plenary at the World Economic Forum's annual meeting at Davos 2022. Image: World Economic Forum/Manuel Lope

Pedro Sánchez
Prime Minister of Spain, Office of the Prime Minister of Spain
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Davos Agenda

This article is part of: World Economic Forum Annual Meeting

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  • Spain's Prime Minister Pedro Sánchez addresses a plenary at the World Economic Forum's annual meeting in Davos on Tuesday, May 24.
  • Says Russia's invasion of Ukraine is also a direct attack on the Europan Union (EU) and all it represents.
  • Confirms that Spain is now hosting more than 100,000 Ukrainian refugees
  • States that the path to recovery is one that Europe must travel together, and the war is yet another reminder that the continent should do it without delay.

I was still a teenager when the Berlin wall fell and the Soviet Union collapsed. The decade that followed was defined by Francis Fukuyama’s thesis on the end of history: liberal democracy and the market economy had prevailed, and there was no way back. That’s how my generation grew up: thinking that economic growth, interconnectedness, freedom of thought and speech and human progress were just as predictable as they were inevitable.

Now, in 2022, we know well that liberal democracy does not come naturally. It requires considerable effort and nurturing. And the end of history is nowhere in sight. As I speak here to you today, Ukrainians are fighting for freedom and democracy —not just theirs, but also ours.

We never thought that we would see again such horrifying images of bombings and massacres on European soil. Names like Bucha or Mariupol have become synonyms of barbarity and war crimes that cannot go unpunished.

I can only reaffirm the admiration that I, and, I dare say, all of those present here today, feel for the courage and the dignity of the Ukrainian men and women in the face of Putin’s brutal aggression. Today, they embody the true defence of our common European values.

This illegal, irrational and unjust war is causing suffering and despair in Ukraine and beyond.

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International food crisis

We are witnessing the largest human exodus since World War II, with over 6 million people fleeing the country and a further 8 million internally displaced. But this is not a just a local, or even a European conflict: this is a major international crisis, with consequences for all of us, regardless of where we come from.

And we must be fully aware of what is ahead of us. The Russian invasion of Ukraine has triggered an unprecedented global food crisis with dramatic consequences for the most vulnerable countries, individuals and families. According to the UN, 1.7 billion people are at risk of poverty and hunger.

The countries most dependent on food imports face unprecedented shortfalls, while their populations are suffering the effects of record food prices. At the same time, some countries are adopting unilateral trade measures, making it more difficult to meet global demand.

Food insecurity is a catalyst for social instability and often armed conflicts. Therefore, it is imperative that we make every effort to restore food production and trade systems, and achieve food security for the most vulnerable.

Spain will do its part

I want to take this opportunity to reaffirm my country’s support for Ukraine and our resolve in helping ensure that Putin does not achieve his goals.

Spain has once again set an example of solidarity. Ukraine can rest assured that we will welcome Ukrainian refugees in our country, now totalling well over 100,000, for as long as needed.

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We will also continue to back, as we have done so far, the toughest sanctions against the Putin regime, and providing humanitarian aid and assistance to Ukraine.

Our support is firm and unwavering because we know what is at stake: the territorial integrity of a sovereign country; the lives, dreams and wellbeing of its citizens; and the cause of international law, of liberal democracy and of Europe.

Make no mistake: Putin’s brutal aggression against Ukraine is also a direct attack on the Europan Union (EU) and all it represents. By responding with unity and determination, the EU is not only defending the basic principles of the international order: it is preserving the very values that underpin it since its foundation.

European unity

Clearly, the last couple of years have not been easy for the European project. First, COVID hit us hard. And, now, we have to deal with the consequences of the war in Ukraine. However, the bigger the challenge, the more resolute our reaction.

Throughout these trying times, we always went for further integration. To unite, and not to divide. To make our common project, Europe, stronger.

We did it with the joint purchase of vaccines, with the SURE instrument for protecting jobs, and with the Next Generation Funds. Now we are doing it again in our response to the war.

With unprecedented sanctions designed to maximize long-term costs to the aggressor. And ensuring that Putin’s vision for Russia and the world does not win from this war.

Beyond helping our Ukrainian friends in their fight for freedom and democracy, we are collectively moving in the direction of greater strategic autonomy.

By deepening the single market, diversifying our supply chains and reducing our dependencies on energy, critical technologies, raw materials, semiconductors or health products, we are becoming more resilient and accelerating our transition to a new economic and geopolitical reality: that of the post-fossil fuel era.

The same logic guides the initiatives to strengthen European defence. We want to reduce our strategic dependencies and invest not just more, but better, in increasing our security and defence capabilities.

And we certainly must show the highest degree of ambition in promoting a renewed Social Agenda for the European Union. Because combating inequality and fostering social cohesion is the only way to achieve our goals of progress, prosperity and welfare in the most efficient manner.

In short, this is a road that we must travel together, and the war in Ukraine is yet another reminder that we should do it without delay.

Global economic outlook

Russia’s aggression is altering the global economic outlook. We were coming out strong from the COVID crisis, but our economies have been severely impacted: from high energy prices fuelling inflation to worsening consumer sentiment and supply chain bottlenecks.

Spain is obviously not immune to this shock.

After devoting nearly €80 billion of public resources in 2020 and 2021 to combat the impact of COVID-19 on our economy, we have recently approved a package of €16 billion too mitigate the effects of the Ukraine conflict on Spain’s households, SMEs and specific sectors.

Since well before the start of the war, my government has been at the forefront of efforts to weather rising electricity prices across the EU, through temporary tax cuts and subsidies.

More recently, the European Council approved a 12-month price cap for the Iberian Peninsula on gas used to produce electricity, which will soon be implemented. This will allow us to bring down prices, shielding households and businesses from the extreme volatility and potential price spikes in energy markets.

Once again, we have to fight against adversity, overcoming extreme, external, unpredictable factors that have a major impact on our lives.

The Spanish economy

Yet, there are inherent strengths in the Spanish economy which give us reasons to be optimistic.

The Spanish economy grew by 6.4% year-on-year in the first quarter of 2022, and we estimate that growth will reach 4.3% for the year, one of the highest rates among advanced economies.

Employment is up, the fiscal deficit is down, and two central sectors of our economy, the export sector and the tourism industry, are recovering their pre-COVID levels and are acting as the engines of this growth.

In other words, we are containing the damage much better than other economies.

Looking at the medium to long-term outlook, I believe the fundamentals of the Spanish economy are even stronger. More importantly, the Spanish government has a clear roadmap for the modernization of the country.

Let me highlight three key pillars of our vision:

1. The first pillar is the implementation of the NextGenerationEU Recovery Plan.

Last year, we launched an ambitious 6-year, €70-billion Recovery, Transformation and Resilience Plan that is already transforming our economy, based on four fundamental drivers: the green transition, the digital transformation, social and territorial cohesion, and gender equality.

Now I can proudly say that Spain is by far the most advanced country in everything related to the deployment of NextGenerationEU funds.

We were the first country, along with Portugal, to have our recovery plan approved, the first to receive a disbursement linked to the achievement of milestones and targets and, again, the first to request a second disbursement.

And we are accelerating its implementation since the start of the war in Ukraine, because the answer to ending our dependence on Russian gas and oil lies precisely in the decarbonisation of our economy.

But speed alone is not enough: we also have to put the money where it is most needed. With this in mind, we have created an innovative instrument to enhance public-private collaboration: the Strategic Projects, or PERTEs, as we call them.

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    PERTEs are born to become a driving force for economic growth, employment and the competitiveness of the Spanish economy. They are instruments for promoting and coordinating high-priority, complex investments in strategic sectors where state intervention is needed to supplement private initiative.

    They will channel more than €30 billion in public funds and should mobilize around four times as much of private funding. We have already approved 10 strategic projects in areas such as electric and connected vehicles, renewable energy and hydrogen, water management, the circular economy, and the health and aerospace sectors, among others.

    Today, my government is approving a new landmark Strategic Project on microelectronics and semiconductors. With over €12 billion of public investment, we want to become the best partner for the industry in its efforts to expand and diversify microchip production to address growing demand and supply chain disruptions.

    Spain will not lose the race for the most advanced technologies. On the contrary, we want to put ourselves at the forefront of industrial and technological progress, and the Strategic Project on semiconductors proves it.

    2. The second pillar is the ambitious reform agenda that my government has put in motion to address the structural problems of our economy. It consists of over one hundred structural reforms based on the European Commission's specific recommendations for Spain, and linked to our Recovery Plan.

    Let me highlight three areas where we are concentrating our efforts.

    • First, the green transition and the fight against climate change. We are channelling 30 billion euros, 40% of Spain’s Next Generation funds, for the decarbonisation of our economy. These investments are coupled with ambitious reforms to fight against climate change and boost the circular economy, self-consumption and sustainable mobility. By making the best possible use of our natural resources and investing heavily in the technologies of the future, from green hydrogen to energy storage and clean vehicles, Spain wants to position itself as a global sustainability leader.
    • Second, the digital transformation. Our digital agenda has an all-encompassing vision: from digital skills to cybersecurity, from the digitization of SMEs to a sound cloud policy, from 5G connectivity to artificial intelligence.
    • And third, education and talent attraction. Because we know that human capital is the engine that drives economic growth, we are reforming our education system from top to bottom: from boosting pre-school education to a major expansion and modernisation of our vocational training system; from university reform to a new Science Law that will provide adequate incentives and double the amount of funding for research, development and innovation.
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    3. Finally, as an overarching pillar of our reform agenda, we set our sights on the provision of quality, stable employment. Thanks to labour market reform that was negotiated and agreed by employers and trade unions, Spain is well on track to correct the endemic defects of its labour market: precariousness and temporality. With the previous law, only one in 10 new contracts were permanent. Today, there is one new permanent contract for every new temporary contract. The job creation rate is at 5% year-on-year. Both, youth and women’s unemployment rates are decreasing at a steady pace. And, for the first time in history, there are over 20 million employed people in our country. More public investments and better education. More jobs and better jobs. In short, more opportunities for everyone to thrive.

    Because the best social policy is one that combines quality employment opportunities for society as a whole with a strong welfare state that protects those in need. And these are not just recipes for a country like Spain. If we truly want to preserve a way of life that has been an aspiration for hundreds of millions of people, this means quality jobs for everyone. This means economic opportunity for everyone.

    But it also means fighting against tax avoidance and unfair tax practices, both at home and abroad. It means being brave enough to truly provide the opportunities that emerging economies desperately look for. We should not be afraid to truly invest in the human development of these communities, going beyond the financing of infrastructure projects, crucial as they are. Long-term engagement and inclusivity are the best possible medicine against authoritarianism and nativism, both at home, among our citizens, and elsewhere.

    The future is a land to be conquered

    What we are witnessing is not just a reminder that history did not end three decades ago. We are witnessing the end of the age of naivety.

    We are now seeing how our values, those our societies are built upon, need to be defended.

    Putin’s frontal attack reminds us that the future is a land to be conquered. There is nothing inevitable about the rise of extremism and tyranny. On the contrary, there is a clear chance for the values of democracy, freedom and international law to continue to thrive.

    It is time to feel confident in ourselves. Let us not fear the forces that threaten to derail the future with their terror and hate. We have the most powerful weapons if we use them wisely. Because democracy and multilateralism may get messy, noisy and imperfect on occasion, but we know they are the only road to peace and freedom in the long term.

    George Orwell once famously wrote, “Who controls the past controls the future, and who controls the present controls the past”. My final message for you today is that we must be brave about the present, not to control the past, but to earn the future. The time for complacency is over. If we stay determined, reason, freedom and democracy shall prevail.

    Watch the full special address here.

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