Despite perception of corruption rising, PM bats away claims and points to what he describes as green shoots in Spain's economy

Beyond the walls of the gated compound of La Moncloa, a tree-lined driveway leads up to the Spanish prime minister's official residence, taking you into a world far removed from the reality of life on the streets of crisis-hit Spain.

Sitting inside the country's centre of power, on the outskirts of Madrid, Mariano Rajoy faces what to many might seem insurmountable problems. Unemployment remains stalled at 26%, reaching 56% among 16- to 24-year-olds. Public debt is nearly 100% of GDP, and rising fast. The former treasurer of the governing rightwing People's party (PP), Luis Bárcenas, languishes in prison, charged with running a multimillion euro slush fund made up of illegal donations.

In Catalonia, calls for independence grow louder by the day, leading to an increasingly bitter dispute with Madrid. Survey after survey shows Spaniards to be deeply dissatisfied with the performance of their political leaders, who they see as out of touch. The image of Rajoy, who rarely sees life beyond La Moncloa, as a man isolated from the suffering of average Spaniards is hard to avoid.

But, if these concerns weigh heavily on Rajoy, 58, who came to power two years ago with an absolute majority that has allowed him to push through a series of austerity measures, he is keen to argue that the future is beginning to look brighter.

In an interview with the Guardian, and partner newspapers from Spain, France, Italy and Germany, ahead of next week's EU summit, Rajoy pronounced himself :satisfied" with the past two years, a period during which Spain had to take a €41bn (£34bn) bailout for its failing banks and only narrowly avoided a national bailout. "In my first summit, we only talked about … bailouts for those countries in difficulty … now we're starting to talk about economic growth, we're starting to talk about youth employment … of more economic and political union in Europe," he said.

"It's true that I would have liked some things to have been done a little quicker, but if you ask me about the overall balance of the last two years? I'm satisfied."

Rajoy was keen to discuss November's unemployment figures. Although the number of registered jobseekers fell, the shift was negligible and could in part be explained by the many young people who have given up and moved overseas. Running the rule over pages of unemployment figures, which he had brought along to trumpet his claims, he talked of "hope" for the Spanish economy, something he said he couldn't have dreamed of last year.

Inequality is an increasing concern in Spain. Earlier this year, the Catholic charity Caritas said there were now three million people living in poverty, while a Credit Suisse report revealed that the number of millionaires grew by 12% in 2012.

Rajoy, nevertheless, believes no special measures need to be taken to combat inequality, and that only creating jobs will bring about fairness: "Firstly, because all those in work can … lead a dignified life, but also because a country in which there are a lot of people in work is a country that can use those taxes to maintain public services."

The government has recently been pushing the idea that the "green shoots" of recovery can be seen, but just a day after the interview, it was reported that Ikea's website crashed twice when it announced it had 400 jobs on offer. About 20,000 Spaniards had applied in the space of 24 hours. The green shoots are hard to spot.

While unemployment is at the top of most Spaniards' list of concerns for the country's future, Rajoy seemed remarkably sanguine about what polls say is their second most important worry: corruption.

The Spanish prime minister was talking to the Guardian on the day a Transparency International report revealed that the perception of corruption in Spain had increased dramatically. Fraud and embezzlement cases have rocked the government, the main opposition Socialist party, the monarchy, the unions and the banking sector.

But Rajoy, who has been in politics for more than 30 years, strongly believes in the honesty of most people in public life. "There is a problem, there is corruption, we've seen it here, and in many other countries … but the immense majority of people are honourable and decent," he said.

When pushed on his personal responsibility for the public's sense of politics as a dishonest game, and the allegation that under his leadership party members destroyed hard drives containing evidence of corruption, Rajoy refused to engage. "I don't know anything about this. Believe me, I know nothing … All I know is that a judge closed the case [of the destroyed evidence]. What would you like me to do? Do you have any evidence? … Don't ask me about things I don't know about."

When pressed as to whether there was any illegal funding of his party, he stood his ground. Despite daily newspaper reports of widespread corruption, and numerous ongoing court cases, he denied all the charges. Asked if he risked losing credibility with the Spanish people by refusing to accept wrongdoing by his party, he simply said: "I hope not."

Rajoy is sure of one thing. While across the continent small, anti-EU parties are growing, the Spanish leader is sure that an ever more united Europe is the only answer, with European elections approaching next year.

"I am going to be absolutely frank here: for Spain, European integration has been a success, one of the best things that has ever happened to us … for us, who lived with 40 years of an authoritarian regime [under the former dictator, Francisco Franco], Europe means democracy, freedom, and progress."

He called on European politicians to explain the benefits of the free market, of open borders and increased co-operation. He told the story of being a young boy, waiting in a queue for two and a half hours to cross the border into Portugal. "The younger generation does not know what that was like," he said. Whatever the defects of the current political parties, the potential rise of smaller, more extremist parties was a much more worrying prospect, he said.

Rajoy is also wary of allowing Spain to be lumped in with Greece and other failing economies, despite the difficult times his country has endured. The Spanish government has faced criticism for its politics of austerity, slashing away at public services while borrowing hugely to rescue its banks, but Rajoy believes they have all been in the service of growth.

"Spain is a country that has made many structural reforms, many of which you could argue about, but we have done them," he said, "and these have produced more flexibility, more competitiveness in the Spanish economy."

But, despite the cuts to health, education and other public services, Rajoy believes the European, and particularly Spanish, welfare state is not dead yet. There are plenty of Spaniards who would disagree, as they wait for vital operations, or worry about their children's prospects, after Spanish schools once again performed poorly in an OECD report on levels of reading and writing.

As Spain obeys German instructions to impose austerity, Rajoy called on Europe to get its own house in order by reaching a deal on banking union as soon as possible. "For Spain, the most important thing is to close this agreement," he said.

Spain would like support for failing banks to be shared by member states, but he is ready to compromise. "We will listen to everyone and be constructive because our priority is that the design of the banking union be completed," he said.

Rajoy's cautious manner is seen in Spain as typical of those from his home region of Galicia, in northern Spain. But proof that there is plenty of steel behind his quiet spoken style came when he shrugged off two consecutive electoral defeats to win power in 2011.

Rajoy defines the People's party as centre-right, but its critics see a worrying push back against some of Spain's hard-earned freedoms. In recent weeks, the government has proposed changes to the Orwellian-sounding Citizen's Safety Law, which would see protesters face stiff penalties for publicly criticising Spain, or demonstrating in front of parliament.

The prime minister is also keen to amend the country's abortion law, despite polls showing it to have widespread support, in what is seen a sop to the rightwing, Catholic-educated millions who provide the backbone of support for PP.

With immigration a concern across Europe, his government has endured criticism from human rights groups for the use of barbed wire at the borders of its exclaves of Ceuta and Melilla in north Africa , but Rajoy remains unrepentant. Despite evidence to suggest that they do nothing to stop sub-Saharan migrants from trying to scale the fence, he is convinced that they are a deterrent.

Rajoy also wants European-wide action to tackle the question of immigration.

"Europe needs to co-operate to improve the levels of development and fight against the poverty in the countries of origin [of the migrants]. That's the first thing that needs to be done. Secondly, it should also work to make these countries respect human rights. Third, it should collaborate with the authorities in these countries to fight against the mafia groups that control the traffic of people. This is the only thing that will work in the medium or long term."

Polls suggest that come the next general election, the People's party is unlikely to be able to galvanise enough voters to enjoy a repeat of its absolute majority, or possibly even to govern in coalition. This leaves Rajoy two years to push on with his austerity drive. He will be hoping the green shoots of recovery have bloomed into something bearing rather more fruit than is currently visible.