Ben Pawlowski
PEDRO Sanchez has been accused of ‘colonising’ the independent Bank of Spain after reports emerged that a government minister is set to be announced as the central bank’s new chief.
Jose Luis Escriva, the current digital transformation minister, will be unveiled as the Bank of Spain’s new governor on Wednesday, according to government sources, replacing the outgoing Pablo Hernandez de Cos whose six-year term expired in June, provoking a three-month search for a successor.
Despite being a former Head of Monetary Policy at the European Central Bank (ECB) and chairman of Spain’s leading fiscal watchdog under Mariano Rajoy, Escriva’s appointment is likely to provoke anger amongst the conservative opposition who have declared the appointment of a government minister sitting in Sanchez’s Socialist cabinet as ‘partisan’.
They have also claimed the move eschews the tradition of the government and opposition striking a deal on a new governor in order to ensure the bank’s political independence, an unwritten rule which dates back to 1994.
The tradition has only been broken once, in 2006, when the Socialist government of Jose Luis Rodriguez Zapatero appointed Miguel Angel Fernandez Ordoñez, a former government minister who came to be widely criticised for his handling of the 2008 financial crisis, as the central bank’s chief.
“The government intends to control and hijack an institution such as the Bank of Spain”, Alberto Nuñez Feijoo, the leader of the conservative Partido Popular (PP) told reporters on Tuesday.
Allies of Sanchez, the prime minister, have argued that the PP set a precedent after Luis de Guindos, an economic minister under Mariano Rajoy’s conservative government, was appointed as vice-president of the ECB in 2018, a position he still holds.
“There are few people in Spain who have the knowledge of monetary policy that Jose Luis Escriva does”, defended Sanchez in a press conference earlier this summer.
Escriva, an economist by trade, began his career at the Bank of Spain after graduating in Economic Sciences from the Complutense University of Madrid.
He directed the research branch of BBVA, Spain’s second largest bank, between 2004 and 2012, and was Chief Representative for the Americas at the Basel-based Bank for International Settlements between 2012 and 2014.
In 2020, he was appointed by Sanchez as Minister for Social Security and Migration, and became a key source of advice for the prime minister during the Covid-19 pandemic.
He was the architect of the Minimum Living Income, a social shield for struggling families which revolutionised Spain’s social security system.
In 2021, Escriva went viral after pouring water into a hole on a lectern whilst giving a speech, mistakenly thinking that it was his cup.
Following his anticipated appointment, Escriva will automatically become a member of the ECB’s rate-setting governing council at a significant time, with a policy meeting next week where officials are widely expected to cut interest rates as inflation across the Eurozone slows.
