The President of the Government, Pedro Sánchez, has completed his mandate and has decided to appoint the current minister José Luis Escriva as the new governor of the Bank of Spain. This decision, according to executive sources, is a response to the PP’s refusal to agree on the renewal of the banking supervisor itself, the National Commission for Markets and Competition (CNMC) or the future National Energy Commission (CNE). In the absence of an agreement, Sánchez will decide.
The appointment of the current Minister of Digital Transformation and Civil Service, which the PP has categorically rejected since his name was leaked in July, was taken for granted this Tuesday, coinciding with the unlocking of the election of the new president of the General Council of the Judiciary (CGPJ) and Supreme Court.
Progressive judge Isabel Perelló will be the first woman to preside over both organizations after achieving the necessary consensus in the plenary session of the governing body of judges, after the PSOE and the PP agreed at the end of July to renew this body after years of blockade by the popular.
These negotiations were parallel to those conducted by the two major parties after the European elections of May 31 to renew other organizations awaiting nomination, such as RTVE, the CNMC, the Central Electoral Commission, in place for eight months, or the CNE whose resurrection the Executive announced.
The PP saw in the CGPJ agreement reached before the summer the possibility of expanding its margin of agreement with the government and, incidentally, its representation in the bodies that depend on political negotiation. The 50% distribution of the members of the judiciary allowed them to consider a greater presence than that usually enjoyed by the opposition parties. In the PP, they wanted to affirm that, despite the loss of the investiture of Alberto Núñez Feijóo, they constitute the first group in Congress and have an absolute majority in the Senate.
But the government’s decision to appoint Escriva to head the Bank of Spain is torpedoing relations, according to what the PP defends. “It is putting a strain on relations” with the government, say party leaders, and “makes difficult” future agreements within the CNMC or the National Securities Market Commission (CNMV). It is difficult, but not impossible, since the alternative is to stay out of these important regulatory bodies. In Genoa, they insist that RTVE is out of these conversations.
PP sources assure that the election of the current minister implies that the Executive wanted to “make the agreement impossible” and “do it” without them. The PP does not intend to participate in the renewal of the Bank of Spain so as not to “whitewash” the appointment of Escrivá with a deputy governor of its share.
In the case of the CNMC, its advisors are appointed by the government on the proposal of the Ministry of Economy, although Congress can then veto it. And in this body, the appointment of five advisors, including that of the vice-presidency, has been pending for months, after the death of Ángel Torres more than a year ago.
The board of the body that oversees free competition is made up of ten members, but currently only has seven councilors, including the president, Cani Fernández. There are two members whose mandates have expired since September 2023: Bernardo Lorenzo and Xabier Ormaetxea. And three other positions to be filled, including that of vice-president.
In the case of the CNE, the future energy regulator (eliminated by the PP in 2013 with the creation of the CNMC) should come into force in early 2025 if a royal decree currently under review in Congress is in force by then. It should have a council composed of seven members: the president, the vice-president and five councilors. And in December, the terms of the current president of the CNMV, Rodrigo Buenaventura, and the vice-president, Montserrat Martínez Parera, expire. Both were appointed in 2020, although they can renew their terms.
Decision of the President of the Government
With the Bank of Spain law in hand, the president of the government has the power to appoint the governor (there has never been a woman) of the organization, although traditionally the two main parties share the nominations for the positions of governor and deputy. governor among professionals of recognized prestige: the opposition appoints the deputy governor, and the government, the governor. Today, Pedro Sánchez has appointed Escrivá despite the rejection of the PP. It is the first time in a democracy that an executive minister will direct overnight one of the main economic institutions independent of the government.
The conservatives already opposed in 2006 the appointment as governor of Miguel Ángel Fernández Ordóñez, who had been Secretary of State under Pedro Solbes at the Ministry of Economy until he was appointed advisor to the supervisor, as a preliminary step to his appointment as head of the organization. Fernández Ordóñez, who had already been a senior official under Felipe González, then chose as his number two José María Viñals, a very prestigious economist who was then director of the Bank of Spain. And the PP dishonored him because this appointment constituted “the rupture of consensus.”
Today, the process is running parallel to the CGPJ renewal agreement, which was closed a few weeks after the expiration of Pablo Hernández de Cos’ term at the head of the Bank of Spain, on June 11. De Cos was appointed by Mariano Rajoy’s leadership on May 30, 2018. The appointment was published in the BOE on the same day that the debate on the motion of censure that removed the Galician from Moncloa began. And this despite the fact that the term of De Cos’ predecessor, Luis María Linde (appointed in 2012), expired only a few days later, on June 11, 2018. The appointment was not agreed with the PSOE, although De Cos did not arouse the rejection of the socialists.
Already at the beginning of this summer, the government declared that it was seeking a new consensus that would extend to the current appointments to the CNMC, to those to come to the CNMV or to RTVE.
The PP has appointed its secretary general, Cuca Gamarra, as negotiator, who ruled out talking about RTVE from the beginning. The PP has made public radio and television one of its opposition objectives. The current composition of the entity’s board and the distribution of intermediate positions after its previous renewal already allow the most popular to directly influence commercial and editorial decisions. Something they are not sure about if they agree to agree on the currently vacant seats.
With this starting position of the PP, the government put on the table its main candidate for the Bank of Spain: Minister Escriva. This offer was leaked to the media in July, and Gamarra was blunt: “Under no circumstances.” Now, the popular are gathering to propose a name for the position of vice-governor. The mandate of the current vice-governor, Margarita Delgado, expires on September 11. And the law of the Bank of Spain stipulates that this position must be appointed by the government, on the proposal of the governor.
Escrivá’s name has been discussed since last year, he went from the portfolio of Inclusion, Social Security and Migration in the previous coalition government to that of Digital Transformation and Public Service in the new one, since November 2023. Many saw in this movement a step backwards. gaining momentum, precisely with the Bank of Spain as its objective. Especially when in December Sánchez chose Carlos Corpo as Minister of Economy to cover the departure of Nadia Calviño to the European Investment Bank (EIB).
Escriva will make his debut on September 11 and 12 at the meeting of the Governing Council of the European Central Bank (ECB), during which he hopes that the organization will approve a new cut in interest rates, after considering the inflation crisis resulting from the Russian invasion of Ukraine.
The man from Albacete has already held different positions in the Bank of Spain itself, the ECB, BBVA and the Bank for International Settlements, in addition to chairing the Tax Authority (AIReF) from its creation (it was an appointment by the PP) until 2020, when he was appointed minister.
In the PP, it is argued that Escrivá’s election means that the PSOE is looking for “distance” after agreeing on the CGPJ. “The government did not seek an agreement. They felt defeated and want to distance themselves,” they point out from Genoa. In 2021, Pablo Casado accepted the renewal of the Constitutional Court, the Court of Auditors, the Ombudsman and other constitutional bodies. A few months later, he was dismissed from the party leadership.
six years
This Wednesday, Minister Carlos Cuerpo will begin the process of officially appointing Escrivá as the new governor, announcing it to the sectoral commission of the Congress of Deputies. Then, a decree from the President of the Government will have to be presented, which will be published in the BOE and will allow the candidate to take office before the King. The term lasts six years, until 2030.
The transition from the Council of Ministers to the central bank is not an exceptional practice in the eurozone, not even in Spain. Luis de Guindos, Minister of Economy in Rajoy’s PP government, left his portfolio to become vice-president of the ECB, a position he currently holds. Previously, the president of the institution herself, Christine Lagarde, already had experience as a minister of France.
With Escriva, almost a third of the members of the ECB’s Governing Council, which comprises the governors of each central bank in each eurozone country and the organisation’s executive board, will have a background in their corresponding executives. De Guindos and Lagarde are joined by the central bank governors of Austria (Martin Kocher), Greece (Yannis Stournaras), Malta (Edward Scicluna), Portugal (Mário Centeno), Slovakia (Peter Kažimír) and Finland (Olli Rehn).
