May 27, 2019 / 2:32 PM / 3 months ago

Spain is back: Sanchez's Socialists return to EU top table

BRUSSELS/MADRID (Reuters) - Buoyed by two electoral victories in a month, Spain’s Socialist leader Pedro Sanchez wants to thrust his country back into the heart of European Union decision-making after years of domestic woes that undercut Madrid’s sway.

Spanish acting Prime Minister Pedro Sanchez arrives to address the media following election results at the party headquarters in Madrid, Spain, May 27, 2019. REUTERS/Susana Vera

Sanchez, who won Spain’s general election last month, came first again in Sunday’s European Parliament election. Although he must still negotiate a governing majority in Spain’s fragmented domestic political landscape, the 47-year-old leader has made it clear he wants to be a player on the European stage.

Madrid sees itself as the voice for a pro-EU, left-leaning agenda and specifically for fellow southern European countries hit by the 2008/09 economic crisis and which felt the worst of the subsequent austerity drive.

Sanchez’s plans include pushing for a common budget for eurozone members, an EU-wide unemployment fund and climate measures such as a bloc-wide green tax on imports of fossils-derived electricity, government and party sources said.

In the years before the financial crisis, the government of Socialist premier Jose Luis Rodriguez Zapatero was a high-profile mover in the EU and Spaniards occupied top Brussels positions, with Joaquin Almunia in charge of EU economic policy and Javier Solana the chief of the EU’s foreign policy arm.

But Spain’s financial woes, a graft scandal that brought down Sanchez’s conservative predecessor Mariano Rajoy and the strife around Catalonia’s independence struggle led to a more diminished presence for the bloc’s fifth largest country.

Sanchez will have his hands full in coming weeks sifting through possible allies for his Madrid government. But the fact that his party is now on track to become the biggest contingent in the EU assembly’s socialist group gives it a good platform to wield influence in the EU at the same time.

“This is a pride for us, an opportunity but also an enormous responsibility,” Sanchez said on Sunday night.

“The responsibility to build a progressive, left-wing social democratic alternative to many of the policies that unfortunately the Spanish people have suffered during the economic and financial crisis.”

Sanchez also favors setting up a so-called European Investment Stabilisation Fund to prevent future economic crises in EU member states. He wants more efforts to finalize the EU’s banking union, including boosting the European Banking Resolution Fund. Madrid wants to explore a EU fiscal union and a European deposit insurance scheme, a government source said.

His plans for more EU integration sets him on a collision course with nationalists and far-right parties that want to return powers to capitals and have performed well in the EU vote in countries including France, Britain, Poland and Hungary and Britain.

Some of the planned proposals for eurozone reform will also raise hackles among ruling conservatives in Berlin. But he will find powerful allies elsewhere.

In a sign of Sanchez’s European ambitions, his first foreign trip as prime minister last year was to France, rather than his predecessors’ customary visits to Morocco. On Monday, he again dashes off to Paris for talks with French President Emmanuel Macron, whose calls for more euro zone integration echo the Spanish leader’s own ideas.

GERMANY-FRANCE-SPAIN AXIS?

The lone success story for the left in big EU countries, Sanchez is also due to meet German Chancellor Angela Merkel face-to-face before all 28 EU national leaders convene in Brussels on Tuesday to discuss results of the EU vote.

“France and Germany have shown that by themselves they are no longer in a position to advance Europe. More states are needed to participate in the leadership task,” Sanchez’s acting foreign minister Josep Borrell has said.

“We want to build a G3 and strengthen the Madrid-Berlin-Paris axis, including Lisbon as a whole with the Iberian peninsula,” a senior Spanish government source said.

Italy’s eurosceptic swing and high debt levels for euro zone standards also help create space for Spain, where the economy has bounced back from a deep recession and is seen growing by 2.2% this year, one of the fastest pace in the euro zone.

Fellow socialist EU leaders tasked Sanchez earlier in May to lead their camp in intense EU horse-trading in the coming weeks, another Spanish government source said, as the race starts in earnest to pick five names for top EU positions.

Spanish officials said Madrid hopes to lead the bloc’s common foreign service, and possibly also get another deputy head of the European Commission.

Unlike his uncharismatic predecessor Mariano Rajoy, who focused almost exclusively on domestic issues, Sanchez is keen to have an international role and is seen by Brussels eurocrats as energetic and effective in the EU capital.

Despite Spain being one of key EU states of arrival for refugees and migrants coming from across the Mediterranean, EU officials and diplomats praise his constructive stance in this bitter EU feud.

Britain’s stalled EU departure creates another opportunity for Sanchez to push for a prominent Spanish EU influence.

He has already left a clear mark on EU stance on Brexit with a strong insistence that Madrid would have an effective veto on any future agreements between London and the EU on Gibraltar.

From Brexit to economic policies to climate, Spain wants to raise its EU game and have more visibility in Brussels, including by securing prominent positions for Madrid.

Socialist party (PSOE) candidate for European elections Josep Borrell and Spanish acting Prime Minister Pedro Sanchez address the media following election results at the party headquarters in Madrid, Spain, May 27, 2019. REUTERS/Susana Vera

Borrell’s name was already floated though Spanish government sources suggest Madrid could end up putting forward a different candidate, with three acting ministers cited in Madrid as possible runners: Economy Minister Nadia Calvino, Environment Minister Teresa Ribera and Agriculture Minister Luis Planas.

In her current role, Calvino has said Madrid was looking into setting up “green bonds” to help businesses raise funds to become more environmentally friendly.

(This story has been refiled to fix Zapatero’s name)

Reporting by Belen Carreno, Ingrid Melander and Gabriela Baczynska, Writing by Gabriela Baczynska; Editing by Mark John

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