Update Post: November 28, 2023 10:05 pm
The President of the Government, Pedro Sánchez, gives Nadia Calviño more time to complete her project at the head of the Ministry of Economy, Commerce and Business. The Galician, who competes with the former vice president of the European Commission Margrethe Vestager to lead the European Investment Bank (EIB) starting next January, could close her five years at the head of economic policy with a flourish if, As expected, it manages to promote an agreement at the European level on the reform of fiscal rules between now and the end of the year and, in addition, complete the community regulation on the use of artificial intelligence, a pioneering regulation throughout the world.
The first vice president has focused on these two norms within the framework of the Spanish presidency of the European Council, which ends on December 31. The weeks remaining until that date will be decisive in reaching an agreement that combines the German intentions of setting specific numerical objectives for deficit and debt, and which represent a more orthodox approach, with those of France, which, like other southern countries, . of Europe, claim space for investment and avoid making again mistakes like those caused by the austerity policies promoted as a result of the last financial crisis.
Calviño and his team are working on preparing the text of the agreement and will have to present the final agreement, if it arrives. Hence, it makes perfect sense that the vice president, who has led the negotiations in the middle of the Spanish semester, remains in her position to try to give the process one last push. Spain could thus remove the backbone that meant that the early call for elections and the political uncertainty derived from them subtracted part of the protagonism of the rotating presidency.
At the same time, the head of the Executive places José Luis Escrivá in charge of Digital Transformation, a responsibility assumed until now by Calviño, in what consulted sources interpret as a movement prior to his possible appointment as head of the Economy, if the departure occurs. of the first vice president. In the same sense they interpret the fact that Manuel de la Rocha, another of the names that sounded like a minister, predictably maintains his current position as Secretary General of Economic Affairs of the Presidency of the Government. In 2020, De la Rocha was tasked with directing the Recovery, Transformation and Resilience plan monitoring unit, which helps ministries analyze progress in implementation and prepare reports that must be sent periodically to Brussels.
Two strong assets for a context of uncertainty
The Madrid native has been part of Pedro Sánchez’s economic team since he first arrived at La Moncloa in June 2018 after the motion of censure against Mariano Rajoy; Although he has accompanied the general secretary of the PSOE since he won the 2014 primaries, serving as the party’s economic manager until 2016. In addition, he has had experience in international organizations such as the World Bank (2000-2007) or the African Development Bank (20 06-2007). Both Escrivá and de la Rocha are two strong assets for the president to assume the most important position in national economic policy.
The fact that Sánchez does not touch either Calviño or a good part of the ministers of the economic area, with four important vice presidencies for four of the strong names of the Executive (along with Calviño are Yolanda Díaz, Teresa Ribera and María Jesús Montero), It has been interpreted as a clear message of continuity and stability to international markets in the face of an increasingly uncertain situation and in the midst of a slowdown in the economy and upward pressure on financial costs.
That rates remain at high levels longer than expected, as the European Central Bank (ECB) has advanced, will be a litmus test for debt management by the governments of the region, including the Spanish one. Rising financing costs will add urgency to the need for fiscal reforms to sustain social spending and green investment.
Calviño and his successor will thus have to deal with an increase in the net interest payment that could rise to 5.4% of public administration income in 2028, compared to 3.8% in 2020. “This exerts a significant pressure on governments, especially those with high levels of debt and structural fiscal constraints, as they finance budget deficits and manage maturing debt,” point out the European rating agency Scope Ratings.