A presidency in Europe marked by uncertainty

Some 350 meetings have been planned[1], many of them in different provincial capitals throughout the Spanish territory. Most of the Spanish ministers have already completed the handover from their Swedish counterparts. The usual handover protocol is being followed, but there is a special atmosphere at the events as the call for Spanish general elections on July 23 will influence the Council’s mandate, particularly in light of the potential change in government. This interim period will reduce the Council’s capacity to reach significant political agreements in the next six months, limiting this presidency to implementing technical regulations, which would dampen the high expectations for making major agreements during this period.

One of the major issues on the agenda of the Council is the revision of the Stability and Growth Pact. The pact’s aim is to establish simpler and more transparent financial regulations, with credible and committed targets for all EU countries. However, a key issue  is the speed of adjustments to address the excessive debt above 60 percent of GDP[2] and the governments’ deficit above 3 percent[3]. After the enormous expenses caused by Covid-19 and the war in Ukraine, this is the point of tension: Germany wants countries to return to appropriate levels within four years, while France and Italy would like more flexibility. Spain’s role was presumed crucial in bridging the two positions on this vital issue. However, the electoral outcome, particularly if it leads to a change in government that would not take control until September, makes it difficult to believe that Madrid will play a definitive role in this matter.

On the other hand, among the main objectives of the presidency[4] is a desire to strengthen Spain’s and the Union’s strategic autonomy in response to the complex international geopolitical landscape, with the aim of reducing dependencies on third countries in critical areas such as energy, technology, health or food. The EU wants to act as a bridgehead towards Latin America while finding its place between the United States and China — two powers that try to attract companies with subsidies and installation facilities. It remains to be seen how the elections will affect these delicate diplomatic purposes, although there does not appear to be any ideological differences between the Spanish Socialist Workers’ Party (known as “PSOE”, in Spanish) and the People’s Party (“PP”) on these issues.

Among the regulatory goals considered achievable for this troubled presidency is the reform of the electricity market to improve its design and stability, alongside the ongoing   promotion of renewable energies and developing energy storage.

On the digital front, the Regulation on Artificial Intelligence, which holds a strategic position on the European and Spanish agendas, could also move forward. The establishment of the first state agency for AI supervision in A Coruña, the location of the European Centre for Algorithmic Transparency in Seville, and the plans to establish the first AI sandbox in Europe attest to this.

Finally, the Regulation on Cyber Resilience, which aims to strengthen the cybersecurity of products with digital elements, could also be approved.

But these outcomes would fall short of the initial expectations for this presidency. The problem is that after Spain, Belgium will take over, with less weight in the EU and structural problems, so it cannot be expected to close complicated agreements[5]. And then comes Hungary, the rebellious student of the EU, whose mandate will be more than tense with Brussels[6].

When we  arrive at the European elections of June 6 to 9, 2024,  the European Commission is expected to present an ambitious track record capable of inspiring its voters, who often see Brussels as a distant entity with indeterminate power, excessively dominated by bureaucracy.

The unprecedented deployment of Next Generation EU funds (more than 800 billion euros) to boost the economy through green and digital transformation, of which Spain has been one of the main beneficiaries, is a source of pride for Brussels officials, who have moved away from the approaches used during the 2008-2012 financial crisis.

But these optimistic approaches have been put on hold, in a sea of doubts, after Pedro Sánchez prioritised national elections over a European presidency in which he seemed to want to shine.

Many have been surprised that Sánchez has relegated to a secondary place such a momentous role considering the positive image he projects in Europe, his apparent interest in continuing his political career on the international stage, and the strong support provided by the First Vice President, Nadia Calviño, with over a decade in senior positions in Brussels. With Angela Merkel’s departure as the German chancellor, the EU is losing undeniable role models, and this European semester may increase the sense of a lack of leadership.

Spain once again conveys its traditional disdain towards Brussels, often sending to its parliament politicians close to retirement or those who have been displaced, refusing to see the transcendental relevance of the Union’s institutions. It is not easy to understand how a large part of the Spanish political class fails to perceive the radical importance of being an influential country within the community institutions, to which national governments increasingly cede sovereignty due to the establishment of binding rules. Europe is a privileged club, but it demands loyalty and compliance with the major macroeconomic requirements that determine each country’s taxes and investments.

Furthermore, as the fourth-largest economy in the EU, Spain is expected to become a key country alongside the three major powers. Many smaller nations in the north, including the Scandinavians, believe that Madrid can understand their situation and represent them better than the major powers, which are accustomed to the loyalty of countries that are considered satellites. This happened after Brexit, and now that this opportunity has arisen, Spain should explore it. However, for this to happen, it would be practical for the major Spanish parties to work together in Brussels with national objectives, as the French, Italians and Germans do. If there is a political change in the middle of the European presidency, it would be good for it to occur in an orderly manner, making it clear that Spain’s and the EU’s interests are above partisan ones.

References

[1] Meetings related to the presidency of the EU: https://www.informacion.es/politica/2023/07/03/casa-mediterraneo-acoge-primera-reunion-89409642.html

[2] https://ec.europa.eu/commission/presscorner/detail/en/ip_23_2393

[3] https://ec.europa.eu/commission/presscorner/detail/en/ip_23_2393

[4] https://www.lamoncloa.gob.es/presidente/actividades/Paginas/2023/150623-prioridades-presidencia-ue.aspx

[5] https://www.nytimes.com/2020/10/01/world/europe/belgium-government-coalition.html

[6] https://elpais.com/internacional/2023-07-03/hungria-acrecienta-su-distanciamiento-de-la-union-europea-y-estados-unidos.html