The Eurogroup presidency: A battle Spain cannot afford to lose

Spain's economy minister

The Spanish Government is confident of obtaining the Eurogroup presidency thanks to Germany’s support. Spain has been overlooked for other key roles in EU institutions and cannot afford another failure. The country deserves a relevant position.

Spain’s loss of weight in the European institutions is an unquestionable fact. In 2012, with the current government in power, we lost a place on the ECB Council for the first time in the history of the central bank. Mr De Guindos insisted on supporting his friend and ECB’s legal counsellor Antonio Sáinz de Vicuña, who lacked the prestige to compete with former governors and well-known economists from other countries. Finally Yves Mersch, former Governor of the central bank of Luxembourg, was the chosen one.

The same happened with the renovation of European Commissioners. We had always held relevant portfolios such as Economy or Competition. Now Mr Arias Cañete, who seems to be missing, is our only player as Commissioner for Energy.

The Spanish Government cannot afford to lose the Eurogroup presidency. But there is no need to say that Mr De Guindos was the main person responsible for the banking sector clean-up over the past six years.

Luis De Guindos explained that nothing will be paid back from the €30 billion the former socialist government used to bail out the banking sector. From the  €40 billion used by the current executive only 6 billion will be repaid by the banks. However, the Economy Minister said he was confident that more money will be recovered once Bankia and BMN are fully privatised.

The restructuring of the Spanish financial system should stay out of the political debate. But in any case we should remember that all capital injections and reforms (from the Fund For Orderly Bank Restructuring or FROB to the Savings Banks Law) approved since 2009 had the support of the former socialist government as well as the main opposition party, currently in power.

We should always give some credit to the others. The current government did indeed boost the banking sector’s restructuring (that is why the bailout was asked for), but restructuring was launched in 2008. Provisions made up to the end of 2011 totalled about  €115 billion euros. Since then, provisions have increased to  €260 billion.



About the Author

Francisco López
Working for more than 25 years in the world of journalism and communications, Francisco has gained valuable experience at several well-known newspapers such as El Mundo and La Vanguardia. He specialized in economic and financial news before making the leap to the corporate communication sector where he has held several positions: Adviser to the Ministry of Economy, Director of the Bank of Spain’s Communication Department, in addition to his consultancy role at Analistas Financieros Internacionales, where he currently works.

Be the first to comment on "The Eurogroup presidency: A battle Spain cannot afford to lose"

Leave a comment