The Elections of 23 July May Put Spain out of Brussels’ Good Graces

Bernardo de Miguel

6 mins - 2 de Junio de 2023, 07:00

Spain, during the last legislature, has managed to regain much of the weight and influence it had enjoyed until it was hit by the financial crisis in 2008. After almost a decade in the wilderness of uncertainty, in which the image of the Spanish state hit a low point regarding reputation in the EU capital, the fourth largest country in the European Union has once again become a relevant actor for the rest of its EU counterparts and, in particular, for the European Commission, Berlin and Paris. 

After years of disappearance, Spain has played a fundamental role in managing the two major shocks the EU has recently suffered: the economic paralysis provoked by the pandemic as well as the escalation of energy prices and inflation spurred by Russia’s invasion of Ukraine. In both cases, the Spanish government’s voice has been heard very loudly, to the point that the president, Pedro Sánchez, stood up twice at the European Council.

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The first stand-up-worthy achievement was succeeded in securing a strong financial response to the COVID-19 pandemic, from which the historic Recovery Fund was born – precisely from a Spanish proposal. And the second came when most European leaders were ignoring the energy crisis and Spain’s requests for reinforcement measures. Sánchez even stood up at a European summit,and from that firmness came the approval of the so-called Iberian exception, which has allowed Spain to lower electricity tariffs and reduce inflation to the lowest in the EU.

The Spanish footprint, therefore, has reappeared in European activity over the last five years, after years in which the country limited itself to weathering the reproaches and admonitions from Brussels for its own ills and those of others (derived from the EU’s nefarious management of the euro crisis) that Spanish society and the Spanish economy endured.

But the good run, in which the image of Sánchez and his vice-presidents Nadia Calviño, Teresa Ribera, and Yolanda Díaz is a key factor, is in danger of being broken if the elections on 23 July return the country to a period of political and governmental turmoil, with the added risk that a possible economic slowdown in Germany looms over the eurozone, thus dragging down the rest of the eurozone.

The most imminent casualty of a new political paralysis would be Spain’s EU presidency, which starts on 1 July. Spain will lose all the political momentum required for this six-month period if 23-J results in a government in office, yet then a lengthy negotiation process to form a new executive of whatever colour, or even in a repeat election. 

The European legislative agenda, with or without a new government, will probably continue as normal, because the EU institutions need to take advantage of the coming months to polish off the projects underway prior to the European Parliament elections in 2024. However, the damage will be much greater for Spain itself, which will not be able to take full advantage of its six months at the helm of the Union to push forward its agenda of priorities, from relations with Latin America to a rational reform of the Stability Pact.

Political instability, moreover, could resurrect in Brussels and other capitals the spectre of an ungovernable and precarious Spain, as happened after the financial crisis. The decline of Spain’s position then began with the bursting of the real estate bubble in 2008, which swept aside the government of José Luis Rodríguez Zapatero. And the fall was compounded by the eurozone crisis, which eventually forced Mariano Rajoy’s government to request a bailout for Spanish banks of up to €100 billion. 

The most tangible humiliation was Spain’s exit in 2012 from the European Central Bank’s executive committee, breaking the tacit agreement that gave the largest eurozone countries (Germany, France, Italy, and Spain) a permanent seat at the helm of European monetary policy. The punishment was attributed to Angela Merkel’s government and, in particular, her finance minister, Wolgang Schäuble. And it symbolised the end of an era of almost three decades of Spain’s rising prestige and influence in Brussels.

The country’s political turmoil prevented it from regaining its footing – even when Spain’s real estate and financial crises were well behind it. Four general elections between 2015 and 2019 kept Spanish governments in an interim situation that was hardly compatible with a strong position in EU negotiations. The pro-independence movement in Catalonia, moreover, strained the country’s internal structure to the maximum and conveyed the outward perception of a state in serious difficulties. The erosion of the international image due to the police violence of 1 October 2017 forced Rajoy’s government to focus all its efforts on avoiding the slightest hint of understanding in European capitals towards the procés, and to abort any hint towards an offer of mediation, especially from the European Commission.

The diplomatic effort against Puigdemont practically exhausted the Spanish government’s political and diplomatic capital. And it disappeared from the EU map on numerous issues. In short, Spain was neither there nor expected to be in Brussels.

Spain’s comeback began in 2018, precisely because of the ECB, when the former Minister of Economy, Luis de Guindos, became Vice-President in Frankfurt. And continued to be consolidated over the last four years. Spanish names are once again being heard at the head of European bodies, such as the European External Action Service (Josep Borrell), the European Banking Authority (José Manuel Campa) or Eurocontrol (Raúl Medina). And almost every time there is a high office at stake, the Brussels pools include a Spanish political figure, whether it is Calviño for the presidency of the European Investment Bank or Sánchez himself for the European Council. 

In the European Parliament, the Socialists became the largest national delegation of the Socialist family in the 2019 elections, ousting Germany and Iratxe García MEP since then its European political group (S&D). In Spain the EPP had the fourth best result throughout the EU in terms of seats and one of its MEPs, Esteban González Pons, holds one of the vice-presidencies of his group (EPP).

There have also certainly been stumbles in this race to the top, such as Calviño’s frustrated attempt to win the Eurogroup presidency, which went to the Irish conservative, Paschal Donohoe. But overall, Spain emerges from this legislature with recognition at the European level that has allowed it to return to play in the first division. Come what may on 23 July, the challenge should be not to return to the second division.
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