Spanish PM picks minister as central bank chief, sparking row

Spanish Prime Minister Pedro Sanchez on Wednesday appointed his minister for digital affairs Jose Luis Escriva as the Bank of Spain's new governor, raising concerns about the central bank's independence.

Escriva will succeed Pablo Hernandez de Cos, who stepped down after his term expired in June, Economy Minister Carlos Cuerpo said, calling him the "ideal candidate" for the post who has "extensive experience in numerous public and private organisations."

The choice of the new Bank of Spain governor had been delayed because Sanchez's leftist government and the main opposition group, the conservative Popular Party (PP), have failed to reach an agreement on a candidate.

While the government has the right to pick the central bank governor, Spanish tradition dictates that it should be made in consensus with the main opposition party, which then chooses the deputy governor.

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As in other European nations, the post has generally gone to a leading economist or a technocrat, and not to active politicians.

Sanchez touted Escriva's qualifications, calling him "one of the best economists our country has, one of its leading experts in monetary policy.

"Very few economists have the knowledge, the experience and the statesmanship of Jose Luis Escriva," he added during a brief televised address.

"The Bank of Spain will gain a great governor and the Spanish economy will be strengthened."

But the head of the PP, Alberto Nunez Feijoo, accused the government of seeking to "hijack" the central bank with Escriva's appointment.

"The fact that the government is appointing a minister as governor is very damaging for the independence of the Bank of Spain," he told journalists, warning that the institution would be "discredited".

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'Not democratically sound'

PP spokesman Borka Semper called the decision to appoint Escriva "unprecedented".

"As governor of the Bank of Spain, Mr.Escriva is going to supervise Mr. Escriva's own management when he was a member of the government," he added during an interview with Spanish public radio.

The appointment was also criticised on the left. The spokesman for hard-left party Podemos, Pablo Fernandez, accused the government of "positioning its pawns" at the bank.

Escriva's nomination "is not democratically sound," he added.

An economist by training, Escriva, 63, began his career at the research department of the Bank of Spain before moving to the European Central Bank and then BBVA, Spain's second-largest private bank, where he became head of research.

He joined Sanchez's government in 2020 as social security minister and oversaw an overhaul of the pension system as well as the introduction of a minimum basic income scheme which tops up the revenues of the lowest income earners.

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Escriva was appointed digital affairs minister last year.

His appointment will be made by decree on Thursday, according to a government source, so it will not need to be approved in parliament where Sanchez's coalition government lacks a majority.

As the chief of the Bank of Spain, he will become a member of the European Central Bank's governing council.

The Bank of Spain has been led on an interim basis by Deputy Governor Margarita Delgado, whose three-month mandate cannot be extended beyond September 11.

Source: AFP