Pedro Sanchez seems on the verge of make the same “mistake” that was made by José Luis Rodríguez Zapatero with what was one of his most controversial decisions: the appointment Miguel Ángel Fernández Ordóñez (MAFO) as Governor of Bank of Spain.
A decision that was adopted three months after dismissing him from his position as Secretary of State for the Treasury. A move for which Sánchez attacked Zapatero in 2014. But today, ten years later, the appointment of the one who is still a minister Jose Luis Escrivá because the same position seems imminent.
Sources close to the negotiations between the PSOE and the PP insist that the Executive is determined that the current head of Digital Transformation and the Civil Service will be the one to lead the Bank of Spain, since for months this has been his only proposal. An effort that, in the end, makes it impossible to reach agreement with the people.
And although From the Executive, they assure that they continue to speak with the people of FeijóoThe agreement is almost a chimera. In addition, the situation is in extra time. The government has already set a date for the presentation of the next leader of the entity: it will be this Wednesday when Carlos Corpo will report on the election of the candidate before the Economy Commission of the Congress of Deputies.
The Executive’s determination that only Escriva can be the new governor continues to surprise. Ten years ago now, Pedro Sánchez assured that “the appointment of Fernández Ordóñez was not a wise decision on the part of Zapatero”However, what the socialist candidate at the time said was that it was necessary to appoint “qualified people” to head the control bodies.
In any case, the government’s strategy in its negotiations with the PP is simple: either José Luis Escriva or José Luis Escriva. The socialists – the person in charge of the negotiations is Félix Bolaños – do not want to give in, according to well-informed sources. PSOE wants to avoid wear and tear with its partners in case of reaching an agreement with the popular, as happened with the renewal of the CGPJ.
Former Prime Minister José Luis Rodríguez Zapatero (i) and Prime Minister Pedro Sánchez.
Europe Press
The intention of Sánchez’s party was for the people to approve Escrivá’s appointment by electing the next vice-governor. However, the PP will not present candidates for this position in the interest of not to legitimize the “colonization” of another state institution by the government.
“We defend the institutions and their credibility. We do not negotiate names, but profiles. It was an opportunity for the Government to maintain the tradition of seeking consensus, but For months there has been no progress because they do not accept that Escrivá cannot be“, say the sources consulted. “How will he analyze the pension reform that he himself developed?”, they ask on rue Génova.
From the Socialist Party, they do not understand the attitude of the PP. All the more so since it was the popular party that elected Escriva to preside over the AIReF in 2014. They also assure that their candidate knows the Bank of Spain perfectly, where he was deputy director of the monetary and financial studies department and head of the monetary research unit.
In addition, the minister also has experience at the European Central Bank, where he headed the monetary policy division. A position that gives a lot of knowledgethey explain, in order to fulfil one of their main tasks: participating in debates on the evolution of interest rates in the euro zone.
In the government ranks, there is insistence that This is not the first time that such a decision has been adopted in Europe.. Let us recall that Austria has just elected its Minister of Economy, Martin Kocher. They also maintain that in Greece, Malta or Portugal, the governors of the Central Bank were at one time Ministers of Economy or were part of the government.
SO, It seems that the decision to elect Escriva as the new governor has been made. Although by Wednesday, when Carlos Body, Minister of Economy, appears before Congress to report on the elections, last-minute changes could occur if the Executive changes its position.
The MAFO case
In 2006, with Pedro Solbes as Head of Finance and Spain in the Champions League of world economies (sic), Zapatero decided to appoint as head of the Bank of Spain someone who, until three months ago, was part of his government. Thus, the MAFO, as it was known in political and economic circles, arrived at the institution at a crucial moment, shortly before the outbreak of the crisis. financial crisis from 2008.
Although he had a remarkable career, Fernández Ordóñez was not just a well-known socialist activistbut he had been part of the administrations of Felipe González – as Secretary of State for Economy and Commerce – and Zapatero – as Secretary of State for Finance and Budgets -. The Popular Party therefore criticized at the time the candidate’s “high political visibility”.
MAFO comes at a time of economic prosperity – Spain’s GDP grew by 4.1% in 2006 – but this situation will not last long. Spain is not the only country suffering Great Recessionbut where it has been particularly hard because of the bursting of its particular housing bubble. And experts agree that MAFO did not see the warning signs in time.
One of the main failures attributed to him is his failure to curb credit growth and the overexposure of banks and savings banks to the real estate sector. Despite signs of concern in other countries, the Bank of Spain has not taken decisive measures to regulate the market or to force financial entities to clean up their balance sheets.
When the crisis broke out in 2008, with the collapse of Lehman Brothers in the United States as a catalyst, the impact on Spain was devastating. The real estate market collapsed, property prices fell dramatically and many families found themselves stuck with mortgages that were impossible to pay. Financial institutions, which had accumulated huge toxic asset portfoliosthey began to stagger.
During this period, MAFO was criticized for not demanding more forcefully that savings banks recognize their losses and recapitalize their balance sheets. Instead, Many entities were allowed to continue operating as if the crisis did not exist.delaying the restructuring of the Spanish financial system.
Fernández Ordóñez during his appearance before the Commission of Inquiry into the Financial Crisis of the Congress of Deputies.
Europe Press
In 2011, the situation of the savings banks was untenable and the Zapatero government, in collaboration with MAFO, promoted their banking. However, by then the damage had already been done and the Spanish financial system would need a European bailout in 2012.
Fernández Ordóñez’s criticism focuses on his passivity and lack of vision predict and mitigate the crisis. Furthermore, it has been pointed out that his proximity to the Zapatero government could have influenced his decision-making, prioritize short-term political stability on the need to apply corrections that would have ended the cycle of economic expansion.
Thus, MAFO’s legacy is marked by the perception that, under his leadership, The Bank of Spain has failed to act with the necessary independence and firmness to prevent the financial crisis from having such a serious impact.
Inside the house, he is also remembered for not paying attention to the technical reports and the Studies Service. Both on the situation of the banking sector in general and that of the Spanish economy in particular. After his departure from the supervisor, the credibility of the institution was seriously damaged. Something that was not definitively recovered until the mandate of the former governor, Hernández de Cos.
Pedro Sánchez and José Luis Escriva.
Almost 20 years later, the same reluctance expressed with Fernández Ordóñez applies to José Luis Escriva. In this case, he is an independent, since he is not a member of the PSOE, but has been in Pedro Sánchez’s government since 2020when he took charge of the Inclusion and Social Security portfolio.
Previously, the man from Albacete had been Chairman of the Independent Fiscal Responsibility Authority (AIReF) on the proposal of the PP. He began his career at the Bank of Spain and later joined the European Central Bank. He was also Director of Analysis at BBVA. So your CV is not the problem.
The disadvantage pointed out by the Popular Party, the banks and even the regulator’s staff is the great proximity to the government. In the case of MAFO, barely three months have passed since his departure from the Executive until he occupies the main headquarters of the Bank of Spain, although during this period he has exercised, as a previous step, the functions of administrator and member of the executive committee of the supervisor. . But If Escrivá’s appointment goes ahead, the change will happen overnight..
