With regard to public sector employment, it is proposed that temporary employment be reduced to 8%, over the next three years, from its current level of 23%. According to the draft budget, this would involve converting 250,000 temporary employees into permanent employees within this period. Also, there will be an increase in the number of sectors allowed to increase their replacement rate to 100%. For general government as a whole, this measure will mean, according to the budget, that there will be 67,000 public sector vacancies in 2017. Overall, these measures would result in growth of 1% in the wage bill in the State budget, as compared with the decline of 1.2% in 2016. At the same time, the restriction is maintained on current spending on goods and services, which declines by 14%. 6/9  As regards public investment, real investment is projected to increase by 23%, with respect to the initial budget for 2016. However when the effect of certain defence-related payments outstanding from other years is taken into account, State investment is budgeted to fall by almost 20%, which is accompanied by a significant reduction in business investment in the public sector. Turning to the Social Security system, the increase of 0.25% in pensions, arising from application of the indexation formula in force following the 2013 reform, is notable.
These positive developments are occurring against a background in which, moreover, competitiveness gains are being sustained, our exports continue to gain market share and the substantial external surplus persists. That said, this favourable situation 8/9  should not be understood as meaning that Spain has managed to completely overcome the imbalances built up during the previous expansion and during the crisis that began in 2007, as demonstrated by the figures for unemployment, public debt and external net borrowing, among others. Persevering with reforms to increase the economy’s growth potential, maintaining competitiveness gains and fiscal consolidation policies are a prerequisite for progress in making the reductions required in the budget deficit and public debt, controlling the economy’s financing costs, improving the balance of payments and, last but not least, increasing the Spanish economy’s capacity to generate employment. Thank you for your attention. 9/9