The Minister of Economy, Carlos Body, will appear this Wednesday at the Congress of Deputies to announce the replacement at the head of the Bank of Spain. The body has convened the Economy Commission at 3:00 p.m. and thus begins the procedure for appointing the new governor of the monetary institution. Then, it will be necessary to present a decree from the President of the Government, Pedro Sánchez, which will be published in the BOE and which will allow the candidate to take office before the King.
The Government has run out of time to reach an agreement with the Popular Party (PP). The mandate of the previous governor, Pablo Hernández de Cos, expired in June, and that of the vice-governor, Margarita Delgado, who remained at the head of the Bank of Spain, expires on September 11.
In July, the Bank of Spain already lost its right to vote in the Governing Council of the European Central Bank (ECB), the body that decides the monetary policy of the eurozone, for appearing with an interim governor. Ultimately, the decision is up to the government. However, political “custom” dictates that an agreement is reached with the main opposition party. Both the election of the governor and his second in the monetary entity.
This agreement has become another battleground between the PSOE and the PP. In early July, when it was revealed that one of the government’s candidates was Minister José Luis Escrivá, the PP refused and accused the Executive of trying to “politicize” the institution. Minister Body then stated that going from minister to governor “does not threaten” the independence of the institution, since independence is guaranteed by law. A line that the government has maintained in recent weeks. Meanwhile, the PP has maintained its rejection of Escrivá. In fact, sources from the Executive itself cited by Europa Press assure that negotiations are continuing.
Although it has resisted (or is resisting), the agreement between the PSOE and the PP to renew the General Council of the Judiciary, reached on Tuesday, June 25, has opened the way to another pact between the two main parties in our country for the succession to the monetary institution, which could be extended to the current appointments to the National Markets and Competition Commission (CNMC) and to those to come to the National Securities Market Commission (CNMV).
New stage at the Bank of Spain
The Bank of Spain is an institution with more than two centuries of history whose main role – deciding monetary policy – is currently subordinate to the Eurosystem (the European Central Bank) but which fulfills a key mission in the supervision of financial entities and maintains an important muscle in its arm of analysis and evaluation of the economic situation and policies.
In recent years, the coalition government has been under scrutiny by the institution’s analysis department. The Bank of Spain has reacted to all (or almost) progressive economic policies, with some notable setbacks such as criticism of the increase in the minimum interprofessional wage (SMI) in 2021, or the reluctance to tax the extraordinary profits of banks while they are raking in profits. historical profits and record dividends distributed, favored by monetary policy itself.
