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The announcement of snap elections in Spain on July 23 has drawn even more attention to the Spanish presidency of the Council of the European Union, which will start on July 1. Some have suggested that the election will make it hard for Spain to give a strategic guidance to many of the legislative dossiers that are on the table. This view, however, is misguided—Spain is politically united in support of the European project and will likely have a very active presidency.
Q1: What would Spain be presiding over?
A1: The European Union is a unique and complex economic and political union made up of 27 sovereign member states and supported by a number of common institutions. Spain will hold the rotating presidency of the Council of the European Union for six months. Spain will take the presidency of the Council of the European Union from Sweden and will hand it over to Belgium in the first half of 2024.
The Council of the European Union is, together with the European Parliament, a co-legislator of the European Union. The Council of the European Union and the European Parliament come to agreements for the approval of new pieces of legislation on the basis of proposals tabled by the European Commission, an equivalent of the executive branch of the European Union. Both the European Parliament and the European Commission have their own presidents: the Maltese Roberta Metsola and German Ursula von der Leyen, respectively. Ministers of the 27 member states sit in the different configurations of the Council of the European Union (there are 10 different council formations since 2019: ECOFIN for economic and financial affairs, Foreign Affairs Council for external relations, and more), and these are the meetings Spain will preside over. The Council of the European Union is not even the institution that brings together the heads of state and governments of the European Union—that is the European Council, which is chaired by the Belgian Charles Michel. (It is true that the naming is very close to the Council of the European Union, but these are different institutions.)
All this means that the government of Spain will coordinate policy work and chair meetings of the different configurations of the Council of the European Union at different levels, from technical ones to the highest political levels, where ministers of the different member states are represented. Spain will also convene European leaders in Spain for informal summits and have some influence over the policy dossiers that it wants to prioritize. But it will not preside over the European Union, just hold the rotating presidency of one of its key institutions.
Q2: What kind of presidency of the Council of the European Union?
A2: Given that the elections to the European Parliament will take place in June 2024 under the Belgian presidency of the Council of the European Union, it is unlikely that many legislative initiatives will be able to go ahead in the first months of next year. Therefore, the Spanish presidency will be the last opportunity to finalize more than 120 pieces of legislation that are currently under discussion. This is well known by the rest of the member states and European institutions, which will certainly make every effort to speed up agreements on the most pressing issues, from reinforcing the European industrial base to scaling up efforts to support Ukraine.
In fact, both Covid-19 and the Russian invasion of Ukraine have changed (for the better) the way things are done in the European Union and moved forward the process of European integration. This has been strongly supported and encouraged by Spain, one of the pro-European countries par excellence. The economic response to the pandemic—with joint common borrowing at the European level to finance resources such as the SURE (Temporary Support Instrument to Mitigate the Risks of Unemployment in an Emergency), or the NextGeneration EU plan, which has made it possible to finance the National Recovery Plans and might be the embryo of a fiscal union—would not have been possible without the firm impetus of Spain. And something similar can be said regarding the response to the economic consequences of the Russian invasion of Ukraine: initiatives such as the reform of the electricity market would certainly not have come to fruition had it not been for strong insistence from the Spanish (and Portuguese) side. Thus, Spain is a reliable partner recognized by its peers and the snap elections will not modify this perception.
Moreover, despite the strong disagreements between Spain's leading politicians at the national level, there is ample convergence in European issues, with no political party holding Euro-sceptic views. And the strong stance that Spanish authorities have taken to defend Ukraine form Russia’s war of aggression, which has surprised many and has taken U.S.-Spain bilateral relations to a superior level, will certainly not change if socialist Pedro Sanchez is replaced by Núñez Feijóo, the leader of the conservative party.
Q3: What would be the key political priorities of the Spanish presidency?
A3: Undoubtedly, the next six months will be marked by the evolution of the war in Ukraine and the European efforts to develop a position at the EU level on China (aligned with the United States but trying to preserve dialogue and cooperation and avoid deglobalization). However, Spain has a special interest in advancing specific reforms at the European level. The most important is to rewrite the fiscal rules embedded in the Stability and Growth Pact. It is difficult to imagine a Spanish government that does not consider it essential to reach a reasonable agreement to reform the fiscal framework before the general escape clause (now suspended) is reactivated in 2024. It is also unlikely that the executive that emerges from the polls will not strongly advocate for the introduction of a common central fiscal capacity or a lengthening of the deadline for the implementation of the NextGeneration EU funds, although achieving both elements in just six months will be complicated, given the opposition of some member states.
In addition, any government that comes out of the ballot box will support the completion of the Banking Union project. In this sense, Spain's support for the European Commission’s recent regulatory proposal on bank crisis management, which seeks to broaden the concept of public interest in order to avoid an improper use of taxpayers' resources, such as those observed in the past, is beyond any doubt. In fact, any Spanish government would want to go further and agree, once and for all, on the Single Deposit Guarantee Fund.
Other relevant dossiers in the economic area are the digital euro and the midterm review of the Multiannual Financial Framework (the European Budget). With regards the digital euro, although the Governing Council of the European Central Bank has made progress on the more technical issues during the investigation phase, there are other matters (for example, privacy or the possible establishment of the obligation to provide the digital euro to financial intermediaries) that require a regulatory proposal from the European Commission and the agreement of the European Council and the European Parliament. Spain is perfectly capable, even with a new government in office, to be an honest and reliable broker and guide the debates on this issue.
Moreover, the European Union budget has been depleted by the heavy use of resources for the war in Ukraine. This will lead the European Commission to propose a significant midterm review of the 2021–2027 budget, as well as the introduction of new own resources, which will probably involve new taxes at the European level. These issues require unanimous agreement by the member states. Spain has been perceived for years as a moderate, reliable country that keeps its commitments. Therefore, few countries would be better positioned to moderate discussions and facilitate reaching an agreement.
In the digital field, the two most relevant dossiers are likely to be artificial intelligence (AI) Regulation and the digital connectivity package. There will probably be a lot of attention on AI. However, digital connectivity and the establishment of a possible compensation from big tech companies to telecommunications companies to cover investments in infrastructure, will be left for the next European legislature.
In energy matters, in addition to more focused issues such as the formalization of the updated Renewable Energy Directive, there are others of a more strategic nature, such as the reform of the electricity market or progress on the H2Med green hydrogen corridor. The electricity market reform will probably require a lot of political capital and is likely to be a challenge for any administration to agree before the end of the year.
Finally, Spain would like to widen the concept of Open Strategic Autonomy and intensify relations with Latin America, an increasingly relevant region in the fight against climate change due to its abundant natural resources. For the first time after the pandemic, there will be a summit between the European Union and the Community of Latin American and Caribbean States (CELAC) in July. In addition, Spain, which has traditionally been the bridge between the European Union and Latin America, will try to approve or ratify the Free Trade Agreements with Mercosur, Chile, and Mexico. These deals could become a model for cooperation with Global South countries, with which the European Union would like to forge new partnerships.
Q4: What would a successful Spanish presidency look like?
A4: A successful Spanish presidency would be one that maintains the reformist momentum that the European Union has shown in recent years, increases internal cohesion among member states, deepens integration, and prepares the union for a world of great power rivalry.
If Spain manages to maintain the unity between the member states to support Ukraine and extend sanctions to Russia, achieve an ambitious reform of the fiscal rules and the banking union, structurally modify the electricity market to accelerate the use of renewable energies, and ratify the association agreement with Mercosur, its presidency will be a triumph.
For many years, the European Union achieved its legitimacy by generating outstanding economic and social outcomes for its citizens. However, since the global financial crisis, Europeans have experienced low economic growth, a pandemic, and now a war on European soil. Moreover, there is a strong nationalist impulse in several member states that jeopardizes the integration process. Therefore, it is essential that the Spanish presidency can show that the European Union can offer tangible results that allow Europeans to live in a safer, more prosperous, and sustainable Europe.
Federico Steinberg is visiting fellow with the Europe, Russia, and Eurasia Program at the Center for Strategic and International Studies in Washington, D.C., and a senior analyst at the Royal Elcano Institute. Judith Arnal is a senior research fellow at the Royal Elcano Institute.
