Spain is poised to take the helm of the European Union’s political agenda for the second half of the year as it assumes the rotating presidency of the Council of the European Union from Sweden on July 1st. The Council presidency comes during times of turmoil for Spanish Prime Minister Pedro Sánchez who has just recently called for snap elections in his country following a stunning defeat in regional elections in May.

The snap Spanish general elections will be held on July 23rd leaving less than a month between the start of its EU Council Presidency and potential changes in Madrid. Spain’s approach to the presidency of the Council will depend strongly on the outcome of these elections, while Sánchez will simultaneously hope to carry the momentum of a strong start of the EU presidency into the general elections that will decide his political future.

Sánchez’s Agenda for the EU Council Presidency

The Council of the European Union is one of the major decision-making bodies of the EU and its presidency is held by each EU member state in turn on a rotating basis for a duration of six months. While primarily an administrative role and regulated by strong checks and balances, the presidency does provide some leeway for influencing EU matters, as the member state holding the presidency can set the agenda by identifying key issues and policy priorities, in addition to chairing the Council meetings. Also, the presidency represents the Council in foreign relations and in interactions with other EU institutions.

Spain’s prime minister Pedro Sánchez aspires to use the platform of the EU presidency to position Spain as a progressive, climate conscious and trade-friendly country. In a recent speech at the Palacio de la Moncloa in Madrid, he outlined the agenda for his tenure at the helm of the Council:

1. Reindustrialisation and the green transition

Sánchez aspires to put a focus on promoting European industrial sovereignty and autonomy in the face of global challenges, while accelerating the green transition. He emphasized the importance of European reindustrialisation as the first priority of his presidency’s agenda.

Against the backdrop of systemic vulnerabilities exposed by events like the recent energy crisis and the COVID-19 pandemic – that have laid bare critical shortages such as in gas supply and medical equipment – he underscored the need to bring key industries, particularly in energy and health, back to Europe in order to regain strategic autonomy.

In the same vein, Sánchez stressed the importance of solidifying the EU’s leadership in innovation for emerging green and digital technologies. By maintaining a leading position in these areas, the EU could harness the green transition as an opportunity for prosperity while reducing energy dependencies and lowering electricity costs.

Simultaneously, Sánchez wants to promote the reform of the electricity market, which he considers a vital stepping-stone for a successful green transition and for which he has long been pushing.

2. Reviving the trade agreement with Mercosur

In the same vein as establishing strategic autonomy, Sánchez aspires to diversify the EU’s trade relations to reduce critical dependencies. In this regard, he vowed to break through in the trade agreement with the Latin-American states of Mercosur, which has been frozen for years now.

Spain, a traditionally trade-friendly country, is hoping to leverage its good ties with Latin America to broker a deal and finally win over the Mercosur countries, which have recently seen broadening trade integration with the EU’s global trade competitors China, Russia and the USA. Chances are Sánchez could find success in kick-starting the process, as Brazil’s president Lula Ignácio da Silva recently urged his fellow Mercosur leaders to re-enter into negotiations with the EU.

At the same time Spain will aim to soften French president Emanuel Macron’s position, whose understanding of European “strategic autonomy” foresees a stronger focus on domestic production rather than further global trade integration. Sánchez will hope to convince Macron on his concept of a more “open strategic autonomy” that implies closer ties with Latin America. Macron, however, will be hard to convince, as he is determined to shield French farmers from powerful south-American cattle production and secure the EU’s super-protectionist approach in agricultural matters.

3. Social justice

Sánchez calls for an improved European growth model along with better wealth distribution across the EU. He emphasizes the importance of an economy that is both more competitive and fairer, ensuring that corporate profits contribute to reducing inequality and improving living conditions for the European people.

As a mainstay in this regard, he projects the establishment of EU-wide common minimum standards for corporate taxes and the fight against tax evasion. Also, he guaranteed to advocate for the improvement of workers’ rights and for more emphasis on the protection of vulnerable societal groups. In this regard, he could push to conclude the proposal for a platform work directive, which will probably be handed over from the Swedish to the Spanish Council presidency.

4. Reforming the financial framework

Sánchez will use the presidency as well to bring forward the revision process of the Multiannual Financial Framework 2021-2027, which he considers largely inadequate to generate the necessary financial momentum to carry the green transition. Building on this he aims at a fundamental reform of the fiscal rules that will put an end to the austerity policies that “caused so much damage during the 2008 financial crisis.”

As things currently stand in the fiscal reform debate, Sánchez’s stance might turn out to be a hollow phrase, especially considering the hardened stance by fiscal hawks in the EU championed by German finance minister Christian Lindner.

Sánchez’s agenda maybe touching on the right points, but it appears very ambitious, and it remains to be seen whether his bold plans can be realized in light of the fact that the EU presidency comes with significantly limited powers of shaping the course of the Union.

Examples of previous presidencies show that more often than not that unfinished issues are handed over to the next presidency. More importantly, if Sánchez will be able to follow through with his agenda depends on who prevails in the Spanish general elections. A likely scenario could be that come July 23rd, it will not be a socialist prime minister chairing the EU Council meetings.

Looming General Elections

Pedro Sánchez’s decision to hold snap general elections comes on the heels of a significant defeat suffered by his Partido Socialista in the regional elections held in May. Despite Spain’s relatively strong economic performance and resilience during the recent energy crisis, many citizens were dissatisfied with their prime minister. The center-right Partido Popular and its president Alberto Núñez Feijóo therefore seized the opportunity and effectively turned the regional elections held in May into a referendum on Sánchez’s leadership.

The decision to call for snap elections can likely be attributed to Sánchez’s desire to counter the momentum of his up- and – coming left-wing rival, labour minister Yolanda Díaz. The highly popular Díaz recently founded her own party “Sumar” posing a significant threat to Sánchez from the left.

The prime minister aims to prevent Díaz and Sumar from gaining momentum and organizing a formidable campaign and to lure her into some kind of political compromise. Sánchez’s major competition, however, comes from Feijóo’s center right Partido Popular, who have swept the regional elections. Supported by the potential coalition partner and right-wing party VOX, the Partido Popular are currently favoured to win the general elections and appoint a new prime minister in Feijóo.

Whichever party leader emerges victorious will be poised to shape the EU Council presidency, but as Spain gears up for snap general elections, major spill-overs for the EU Council presidency appear unlikely, since Spain maintains a broad pro-European consensus across its political spectrum. Still, it would be an odd outcome if the EU Council presidency would begin under the Partido Socialista and be handed over to the Partido Popular less than a month after.

A prolonged transition period within the Spanish government, which also could imply a recalibration of political priorities, would certainly carry the risk of reducing the effectiveness of the Spanish Council presidency. Feijóo has just recently complained that he is not being given sufficient information on the Spanish plans for the EU Council presidency, which does not hint at the prospect of a smooth transition.

Major decisions will have to be tackled in the EU this year, such as on the design of the European industrial strategy or how to finance the reconstruction of Ukraine. Against this backdrop even minor political setbacks can mean that the Spanish Council presidency could be getting off on the wrong foot.

In this sense, political continuity and stability in Spain after July 23rd would be the preferrable outcome from a European point of view, so that the Spanish Council presidency can hit the ground running and deliver best for the EU.

About the author

Lucas Resende Carvalho is a Junior Project Manager at the Bertelsmann Stiftung in the Europe’s Future Program.

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