Brussels isn’t what it used to be. For decades, Spain’s relationship with the EU budget – the mammoth Multiannual Financial Framework (MFF) – has been that of a disciplined receiver, focused on the countryside and infrastructure. Today, however, the corridors of Berlaymont and the committee rooms of the European Parliament are designing a new Union that prefers microchips over beets and defense of the eastern flank over cohesion in the South. For Spain’s economic sectors, the playing field has changed, and now we must put names, surnames, and accents to those whose pens will decide whether Spain remains a powerful beneficiary or succumbs to the so-called “paradox of success”.
This coming Wednesday, I’ll be participating in the Public Affairs Summit, where I’ll delve into how Spanish companies can anticipate this shift, offering analysis on why technical dialogue with the Directorates-General and MEPs is now as decisive as the political photo in the Council. The new ecosystem of “conditional funds” and industrial sovereignty requires that Public Affairs become the core of corporate strategy.
It’s essential, therefore, that institutional leaders exchange the necessary intelligence and lobbying tools, so that the weight of Spain’s industry isn’t diluted in the MFF negotiations already underway. In this context, I identify six fronts that will require special attention:
The new design of spending and surveillance of the East. The most important man for Spain’s pocket isn’t Spanish but Polish, and his name is Piotr Serafin, Commissioner for Budget and Administration. As Donald Tusk’s right-hand man, he arrived with a clear mandate to “modernize” – which in Brussels tends to be diplomatic code for diverting resources from traditional policies and toward industry and defense. DG BUDG, technically led by France’s Stéphanie Riso, has designed a financial framework that’s closer to the NextGenEU Recovery Plan than to traditional funds of the 1990s, creating obvious tension over the end of “open checkbooks”, since Serafin is seeking to centralize the budget. Spain – long an expert in absorbing cohesion funds, due to its income levels – now runs a risk of net loss. If a model based on competitive funds is imposed, where the best technological project and not the neediest country wins, then Spanish SMEs with less lobbying capacity than German enterprises may have a hard time accessing European credit.
The struggle for industrial sovereignty and the Franco-German axis. In the field of industry, so vital for the automotive and pharmaceutical sectors, the baton is in the hands of Stéphane Séjourné of France, Vice-President for Prosperity and Industrial Strategy, whose vision is one of strategic sovereignty to create European giants capable of looking China in the eye. Meanwhile, in the European Parliament, the responsible actor is Germany’s Christian Ehler, who, from the ITRE committee, has an approach that usually prioritizes heavy industry and nuclear energy. The technical managers in this area are Kerstin Jorna at DG GROW and Marc Lemaître at DG RTD (Research and Innovation), who are managing the tensions arising from the Draghi Report on competitiveness and the dangerous relaxation of rules on State aid. In that scenario, Spain can win if it manages to attract funds for green hydrogen and microchip projects, but it loses irretrievably if the budget becomes an exclusive club where Paris and Berlin pump up their national companies with Commission approval.
The consolidation of Section 5 on defense and the rise of Andrius Kubilius as the first Commissioner for Defense mark the shift from a research-oriented budget to one of mass production and joint procurement. Under the technical direction of Timo Pesonen at DG DEFIS, Brussels is pushing for a standardization of armaments that favors Franco-German design, putting Spanish companies like Indra and Navantia at risk of becoming subcontractors if they fail to protect their industrial sovereignty in the European Defense Fund. In Parliament, it is now German MEP David McAllister (EPP), from the influential Foreign Affairs Committee and with his weight on Security, together with figures such as Marie-Agnes Strack-Zimmermann (SED), who are drawing the hard line: military spending is no longer a diplomatic option, but the continent’s new industrial engine.
“Ukraine is a massive agricultural power and, if it enters the budget distribution without increasing the total pie, funds for Spanish olive groves, wine or cereals would collapse due to pure budgetary mathematics”The Spanish countryside in the shadow of enlargement. The Spanish agri-food sector is likewise facing a tectonic changing of the guard, with Luxembourg’s Christophe Hansen as Commissioner for Agriculture and Veronika Vrecionová of the Czech Republic chairing Parliament’s AGRI committee, representing a turn toward productive pragmatism and a move away from the previous mandate’s more radical environmental demands, which so inflamed protests in rural Spain. However, one of the main tensions is the incipient Ukrainization of the Common Agricultural Policy, given that Ukraine is a massive agricultural power and, if it enters the budget distribution without increasing the total pie, funds for Spanish olive groves, wine or cereals would collapse due to pure budgetary mathematics, despite the fact that DG AGRI, led by Austria’s Wolfgang Burtscher, is attempting to simplify bureaucracy to calm tempers in the South.
Conditionality of funds and the end of regional autonomy. In terms of cohesion and regional development, Vice-President Raffaele Fitto of Italy is the key figure because he manages the heading that includes ERDF and ESF+ funds under a new tension of reform conditionality, where money is delivered only if the national government meets structural milestones, de facto eliminating the traditional model where a region received funding based exclusively on its level of per capita income. This means that Spain will lose real political autonomy, since its regions will lose clout in direct dialogue with Brussels and with the technicians at Themis Christophidou’s DG REGIO, while the model is centralized in Madrid under the close supervision of Fitto, who hasn’t hidden his intention to link every euro to national productivity over territorial convergence.
Teresa Ribera has emerged as the definitive bulwark for Spain’s economic sectors. In her position as Executive Vice-President, Ribera is much more than the gatekeeper of competition; she’s the necessary counterweight to the hawks from the East. Her ability to define what is considered “strategic industry” and how State aid can be made more flexible will determine whether green hydrogen, naval decarbonization, or the Spanish aerospace sector gain access to the heart of the budget or are displaced by Baltic priorities. For any director of institutional relations, understanding Ribera’s agenda isn’t optional, but the only way to ensure that Spain’s economic transition is financed, and not just required, by Brussels.
“Business leaders seeking support soon discover that the Spanish consensus has already been built. ‘The problem isn’t Spain’, they often hear”Spain is entering this budget cycle with an economy that is growing above the European average, but with political influence that is facing a much more assertive bloc from the East and North. This forces Spain to play a budgetary game based on the efficiency of reforms, because the objective in Brussels is no longer territorial cohesion, but competitive survival.
In a recent conversation between MEPs Javi López (PSOE) and Esteban González Pons (PP), it was emphasized that, beyond the mistake represented by the Spanishization of EU politics, Spanish Socialists and Populars cooperate to defend Spanish companies, productive sectors, and economic priorities. Business leaders seeking support soon discover that the Spanish consensus has already been built. “The problem isn’t Spain”, they often hear. “It’s with non-Spaniards and with other Member States that we need to talk.”
Spain’s economic sectors need to push their representatives to establish contact and pressure those who hold the pen, because we run the risk of financing, with our own growth, the industrial renaissance of their northern competitors on a map where the names are already on the table and all that remains to be seen is whether the country has the sharpness required to speak the new and demanding language of European money.