Spain, Europe, and the World—Interview with He Anunciada Fernández de Córdova, the Ambassador of Spain to Hungary The Future ahead of Us: The Education,

Alessandro D’Onofrio–Zsombor Szabolcs Pál, Budapest, 28 January 2021 The interview was conducted in Spanish and translated by Zsombor Szabolcs Pál.

Under extremely difficult circumstances, the European Union exceeded all reasonable expectations in the face of an unprecedented series of events. The Next Generation EU Fund is a giant step towards strengthening our strategic autonomy and demonstrating that we are a powerful Europe. In April 2020, when there was an intense debate in the European Union, Spain presented a document that had an element of risk, for we did not know what reaction it would meet, but contributed to forging consensus, as could be seen later on.

When nobody believed in it, the Spanish president of the government, Pedro Sánchez, was the first who spoke of the need for a recovery fund to get out of the socio-economic pit the pandemic has pushed us into. Reaching an agreement at the European Council meeting in December 2020 was the only way to make the resolution on both the multiannual financial framework and on our own resources come into effect from 1 January. We indeed are one of the main beneficiaries—just as Hungary is one of the main net beneficiaries of the cohesion and other funds and the multiannual financial framework. European funds are very important to our two countries—in fact, they form a substantial part of the budget approved in Spain for 2021.

The Next Generation EU is an instrument that amounts to a total of EUR 750 billion. It is unique and unprecedented instrument not only due to its volume but also because it is the first time that the EU can mobilise the necessary resources, using the guarantees the member states must provide the European Commission with so that it can obtain funding on the financial markets.

On 18 January 2021, Spain, which is expected to obtain approximately EUR 140 billion, presented the Economic and Financial Affairs Council with the first draft version of the recovery plan that it submitted to Brussels in April. Besides the planned investments, this document also contains an important

agenda for structural reforms aiming to achieve a more modern and resilient economy, to increase productivity, competitiveness as well as the capacity for future growth and for creating quality jobs throughout the country, to strengthen the welfare state, and to reduce the social and gender gaps that have been widening since the financial crisis.

On 15 October last year, Spain sent its 2021 budget plan to the European Commission, which also contained its Recovery, Transformation, and Resilience Plan with concrete proposals for a EUR 72 billion investment between 2021 and 2023. This plan rests on four cross-cutting pillars: ecological transition, digital transformation, territorial and social cohesion, and gender equality. It has a set of reforms to bring economic modernisation to the country through the above four elements. The government is planning to allocate 37% of the funds to energy transition and 33% to digital transition programmes. Albeit very beneficial in the long term, these will have no direct effect in the short term, limiting the European funds’ positive multiplier effect.

The Spanish economy, highly specialised in services and tourism, is particularly vulnerable to the effects of the pandemic. Estimates by the Bank of Spain, which are quite consistent with those of the International Monetary Fund, predict that economic growth in Spain will range between 4.1% and 7.3% in 2021. The government calculates that the Next Generation EU’s European funds will have a 1.2 fiscal multiplier effect.

Here, I would like to underscore three points: First, the crisis has shown that the European single market is essential for recovery. Second, Europe needs to increase its industrial autonomy and identify its strategic sectors. Third, the COVID-19 crisis has fuelled the debate on state aid: Spain supports the flexibility introduced by the temporary framework, but this cannot jeopardise having a level playing field, as we must avoid distortions in the internal market.

Moreover, within the single market, we must address unfair tax practices existing in some areas, especially in corporate taxation. We must also bear in mind that increased support for Important Projects of Common European Interest (IPCEI) needs to ensure that all member states can participate. Consequently, the pillars of these projects must be transparency and open participation.

In December 2019, the European Council set the goal of achieving climate neutrality in 2050, thus fulfilling the most ambitious aspirations of the Paris Agreement. By 2030, halfway through the process, the goal of reducing emissions by at least 55% has been established, and this commitment has also been included in the proposed European Climate Law, which will provide the framework for making progress in the fight against climate change.

The climate transition creates new opportunities but also poses major challenges to the industry and equity. Therefore, emission reduction should be achieved at the lowest possible cost, counting on the participation of all member states and taking into account the criteria of solidarity, justice, and the preservation of competitiveness.

Funding will be key to both the development of technological innovation and its subsequent deployment. It will be necessary to make the best possible use of the multiannual financial framework and the Next Generation EU instrument, for which a cross-cutting spending target of at least 30% in the framework of the Just Transition Fund is asked. The creation of an EU green bond and the strengthening of the EU Emissions Trading System are two relevant proposals. We must keep our eyes on the upcoming COP 26 in Glasgow in the autumn.

Europe is in a leading position now, and the sooner we initiate the change, the lower the economic and environmental costs and the greater the economic opportunities caused by the climate transition in employment and the modernisation of the business fabric will be. It is an opportunity to place Spain and the European Union at the forefront of technological sectors that will have a bearing on the coming decades.

Digital transformation is another major challenge to Europe, and the setup of 5G networks is particularly relevant in this context. Spain believes that the European Commission and the member states should develop a joint approach to defining the criteria for the identification of high-risk providers. The European Commission should also quickly update the state aid framework for deploying 5G.

Among the non-founding member states, Spain is the one that has most assiduously made contributions which took into account not only how the European project can benefit us but also how these contributions can benefit the European project. There is basic consensus on the European agenda in my country, which is one of our great assets to have a growing role in the EU.

Strengthening our capabilities certainly contributes to a situation where close partnership with the European Union can become more attractive to our main ally, the United States. With the European Council meeting in mind, a new EU–US Agenda for Global Change was presented, which is one of the focal points of the debate on strategic autonomy. It identifies four priorities: a healthier world during COVID-19 and beyond, with necessary WHO

reform; protecting our planet and prosperity; technology, trade, and standards; and a safer, more prosperous, and more democratic world. There is also a mention of a comprehensive new transatlantic green agenda that includes trade and technology, as well as greater coordination in the fight against deforestation and in the protection of the oceans. In technology, trade, and standards, there is room for closer coordination, as the two sides of the Atlantic have many values in common, account for about one-third of global trade, and exercise strong regulatory leadership.

The European proposals are along the lines of pushing for the unavoidable reform of the World Trade Organization, having a dialogue on the social and fiscal responsibility of big tech companies, and establishing a new EU–US Trade and Technology Council. Connectivity should be at the top of our agenda, as we should be able to provide the world with alternatives to the Chinese Belt and Road Initiative. Similarly, we need to engage with the new Biden Administration to find common ground the digital economy (including the hardto-crack nut of the digital services tax). Finally, there are US trade negotiations with third parties to consider. Against the backdrop of Brexit, US–UK negotiations with all their variables, including how Biden repeatedly defended the Good Friday Agreement, are particularly important to the EU.

As for NATO, Spain, a full member of both the Atlantic alliance and the European Union, considers that there is no choice between the two. The security of our country, the promotion and defence of our interests, and our contribution to the security of our allies depend on a strong NATO and a Europe based on solid defence. Spain is in favour of a Europe with defence capable of responding to the threats and challenges posed by the security and defence landscape in the terms already pointed out in the 2016 EU Global Strategy, the implementation of which has given rise to initiatives from PESCO to the European Defence Fund, which are under development today.

As most of the EU member states are also NATO members and are committed to transatlantic relations, the EU’s defence ambition is compatible with the basic principles and objectives of the Washington Treaty because we believe that a Europe with strong defence can strengthen NATO, and vice versa. Reinforcing the cooperation between the EU and NATO is essential. Both organisations must reinforce each other and develop synergies while respecting autonomy in decision making.

Regarding the Eastern Neighbourhood Policy, we must act with greater resolution and have a leading role to be able to claim and exercise a prominent position while reviewing its policy priorities and requesting additional resources for the south. The European Neighbourhood Policy can become more effective if we put greater emphasis on the horizontality of the programmes and their alignment with the 2030 agenda instead of increasing differentiation and bilateralism in the relations with our southern neighbours.

Global governance had to deal with some dysfunctionalities already before the crisis, but the pandemic has accelerated this process. The Conference on the Future of Europe has put citizens at the heart of this exercise of reflection. It should produce concrete results in several areas: in the Economic and Monetary Union, Research, Development, and Innovation, the healthcare sector—although the EU only has coordinating competencies in health, our response to the pandemic has shown that many results can be achieved jointly—mobility and tourism, migration policy, or European citizenship.

Spain has presented a proposal that begins with defending multilateralism: the EU must continue to promote multilateralism without abandoning the goal of greater autonomy. Four priority areas can be identified to overcome the present crisis: health, mobility, global value chains, and technological governance. Talking about the healthcare sector, no one is out of danger as long as the virus remains active somewhere. This requires mobilising the WHO, especially in data sharing and resource mobilisation. The EU and its member states could create the necessary political will at the global level, including the G7 and G20.

Speaking of mobility, Europe accounts for half of all international tourist arrivals and is the major global tourist-issuing market. The pandemic hit the main European tourist destinations, including my country, the hardest. The most advisable way to avoid distortions in the single market is to agree on common standard operating procedures.

The EU is moving towards a more strategic approach to value chains and European dependence in certain sectors, such as antibiotics, protective materials, analgesics, or raw materials for the chemical industry. Some of these companies can relocate to the EU, which requires collaboration with the private sector, as companies must remain competitive.

As for technology and data, the pandemic has reinforced surveillance in the public health arena. We must cooperate to develop technology standards that can ensure privacy while also enabling innovation. Digital transition will be necessary to guarantee recovery, and the EU could have a leading role in the way the digital word order transforms. There is no point in talking about strategic autonomy without ensuring European digital autonomy minimally and reducing technological dependence.

Since the 2006 cayucos crisis, Spain has been a model in Europe for how it managed migration at a national level, with a clear differentiation between various elements which also have to be complementary: the fight against irregular immigration, especially against human traffickers, and the simultaneous need for integrating immigrants who are granted regular status in Spain. It is also a model for opening channels for legal immigration where our labour market requires it, for its cooperative support for development, and for establishing cooperative relations with our law enforcement and security forces.

The dossier on migration policy is among the most sensitive ones, and that is why we believe that areas of consensus on, for example, the

external dimension of the problem or a solution to its operational issues, must be sought. Points of convergence between Hungary, the Visegrad countries, and Spain are the “package approach” to the negotiation over the Pact on Migration and Asylum and the importance we attach to the external dimension, although the standpoint we share as a country with external EU borders does not lead to converging positions.

Imbalances between solidarity and responsibility must be redressed: it is not a viable option to have strict rules for the states of first entry and flexible solidarity for the rest—and the states of first entry cannot cope with the migratory pressure in place of the whole of the union. However, we are also concerned about some countries’ insistence on the creation of detention centres on our borders: neither is it a solution—as it is demonstrated by how camps in Greece perpetuate—nor does it comply with our legislation. Moreover, it would also be politically indigestible.

The situation on the Canary Islands reaffirms our preference for adding an external dimension that is given substance and provided with material resources to the pact. We launched an initiative on migration in Africa into which the necessary funding can be channelled. Just like us, the countries of the Southern Neighbourhood also feel the demographic pressure, which, in their case, comes from the Sahel and sub-Saharan Africa. If there is no economic recovery, the youth of these countries will seek a better life on the other side of the Mediterranean.

To answer the second part of your question, Politico, a prestigious digital newspaper on EU issues, put a vice-president of the Spanish government, Teresa Ribera, on its list of the twenty-eight most powerful personalities in Europe, recognising that a southern European country is at the forefront of the ecological transition. Spain is aligned with the European Commission and the most progressive member states. It is necessary to know how to combine two goals: achieving environmental neutrality and guaranteeing that this process will be realised in a way that those who need to make a greater effort to adapt or could suffer damages may be supported. This requires financing, which will come from the recovery fund: the latter will fund up to 30% of the activities related to ecological transition.

The European Climate Law will be fundamental to tie the goal of climate neutrality to 2050 as a cross-cutting guide for all European policies and a demonstration of the EU’s global leadership vis-à-vis third countries. It must recognise the importance of adaptation measures and the integration of climate risks in water management to mitigate the worsening water stress. We will support the maximum ambition level of the climate law, as it produces synergies between creating sustainable jobs, combating the risks of climate change (and biodiversity loss), and improving the health and well-being of citizens. Moreover, we will monitor the Just Transition Fund to ensure that it is indeed fair and recognises the restructuring effort already made by Spain.

Due to its geographical location, Spain is a nodal country for the EU in two dimensions: towards Latin America and the South Mediterranean Neighbourhood. Latin America and Africa, especially the Sahel and the Mediterranean, are priority regions for Spanish foreign policy. International cooperation with Africa entails the risk of Latin America being put on the back burner, and, for this reason, Spain tries to seek a balance.

As for Latin America, the Portuguese presidency showed an interest in “revitalising bilateral relations” and “promoting relations with subregional groups in areas of common interest.” Spain believes that there is a need for greater political dialogue between the EU and Latin America—“de facto,” we are the former’s intermediary in EU institutions—which may also promote the EU’s greater presence as a global actor.

The EU–Mercosur agreement is under legal review and being translated. It is yet to be approved by the European Council and signed by the EU member states and the Mercosur countries. It also needs to be approved by national parliaments after being given the goahead by the European Parliament. However, several countries have displayed reluctance to sign it, especially because of its environmental aspects—an attitude that may cloak agricultural protectionism. Nonetheless, the EU–Mercosur agreement is going to raise the standards of environmental protection in trade relations. It is, therefore, necessary to speed up the ratification of an agreement that has global benefits. In the current geopolitical context, non-ratification could bring discredit on the EU, while the vacuum it leaves could be filled by other powers (especially China).

The Southern Neighbourhood is also a priority for my country, and the health emergency makes it more necessary than ever for the EU not to stop paying attention to it: Egypt alone has a larger population than the six countries of the Eastern Neighbourhood combined. We want the same degree of development for the Southern Neighbourhood that has been achieved with the Eastern Partnership, aligning these countries with the new priorities of the European agenda (digitalisation, green agenda, connectivity, etc.).

Twenty-five years ago, Spain fostered new relations between the European Union and the Mediterranean countries. Thus, the Barcelona Process emerged, from which the Union for the Mediterranean—a forum with forty-two members, among them the EU countries, many Arab states, Turkey, and Israel—was born in 2008. In 2015, Spain promoted the first EU–Southern Neighbourhood Ministerial Meeting.

On 26 November last year, a meeting between EU ministers and our partners in the Southern Neighbourhood took place in Barcelona, and, on 27 November, the V Regional Forum of the Union for the Mediterranean was held on the occasion of the 25th anniversary of the Barcelona Process’s launch. This initiative brought the Southern Neighbourhood into the European debate at a key moment, when the new multiannual financial framework should boost the creation of a common business ecosystem, fostering a high degree of connectivity. Besides, we must have a frank and constructive

dialogue on migration, a phenomenon which has appeared to be so fundamental—but this requires a strong political will.

After the UK left the EU, Spain is the fourthlargest economy in not only the eurozone but also the whole union, which means that we are required to play an essential role in it. However, my country, committed to the European project for almost four decades, can opt for flexible alliances: it can ally itself with the Paris–Berlin axis if occasion allows it or take advantage of the vacuum left by Brexit and of the chance to be a third pillar of the core of power in the EU, turning to alliances with partners such as Hungary or the V4 when there is convergence among our interests.

Spain’s relations with the United Kingdom are very intense in the economic sphere, both commercially and in terms of reciprocal investment—the United Kingdom has the second-largest stock of foreign direct investment in my country, and, in terms of GDP, foreign direct investment between Spain and the United Kingdom is greater than that of Germany, France, or Italy. Speaking about civil society, it is not only the importance of tourism between us but also the number of both countries’ residents in each other’s territories which is particularly notable: more than 260,000 Spanish residents live in the UK, while there are more than 400,000 British residents in Spain. Spain has the greatest interest in maintaining the best possible relations with the United Kingdom, and, if the strength of our ties is useful for the union as a whole, we will be delighted to contribute.

A complex negotiation between the EU and the United Kingdom was concluded on 24 December last year—priority was given to citizens there, and the European Union and its member states could preserve their unity. Spain maintained a high profile in chapters of particular interest to us, such as fishing, agrifood products, air transport, and Gibraltar. We would have preferred to have a more ambitious agreement; still, sections about agriculture, and especially fishing, as well as trade and aviation that are important to Spain were included in it. The agreement, which provisionally came into force on 1 January, does not freeze UK–EU relations: it should be seen as the foundation from which we can rebuild them. We will have to put all our efforts into developing our relations with the UK, a great political and economic power which is very close to our country and has enormous importance to Spain.

Spain considers Hungary and the Visegrad Group (V4) as relevant partners in both the EU and NATO. In the Visegrad countries, a certain interest can be noticed in balancing German assertiveness at the European level: although there is prestige in joining the Franco-German engine, they also have an interest in seeking

alternatives for the guidelines coming from Brussels–Berlin. Brexit is a tragedy for the V4, and there is a wish we share to forge new and different alliances, depending on the issue at hand.

There is a satisfactory political dialogue between Spain and the V4, but there is room for strengthening our bilateral relations with both the V4 members and the V4 as a whole. The Spanish government talks to all EU governments: it is important to distinguish ideological affinity from the importance of country-to-country relations.

On 2 December last year, the Spanish secretary of state for the EU met his four counterparts from the Visegrad Group. This was the first V4 + 1 format meeting in which Spain had participated. This was a sign of our interest in expanding our dialogue at a crucial moment for the EU before the European Council was to approve the recovery fund and the financial framework and at the moment of Hungary and Poland’s vetoing the agreement. Spain, as the fourth-largest EU member state and one of the main architects of the agreement, conveyed a positive message to the representatives of the Hungarian and Polish people, with whom we have ties of all kinds, about the urgency we all have to face to unblock the fund and the budget and to promote economic recovery.

The coronavirus crisis demonstrated the need for counting on very diverse actors, public and private, local, national, and international. No doubt, we can work in this direction with our friends in the Visegrad Group and take on a greater role in the eastern neighbourhood, perhaps co-leading some initiative where we can contribute with Spanish added value (e.g., with our experience in Latin America) working together with a partner very close to the eastern neighbourhood.

Trade relations between Spain and the Visegrad Group countries are dense. In the first eleven months of 2020, exports to these countries exceeded EUR 10,000 million and imports EUR 12,000 million. Looking at bilateral trade relations, it should be noted that Spain is Poland’s twelfth-largest customer and ninthlargest supplier and there are more than 130 Spanish companies in the Czech Republic in sectors such as the car industry, tourism, or infrastructure, or that we are among the top ten trading partners of Slovakia. Based on these solid foundations, the Spanish government keeps working to ensure that our business enterprises accompany the V4 countries in their long-term growth and to attract investment from these countries, for Spain, being a very open economy, is committed to strengthening its economic and commercial exchanges.

Spanish exports to Hungary reached EUR 1,808 million, and imports from Hungary EUR 2,963 million, in 2019. Although the trade balance is in deficit for Spain with a 61% trade coverage ratio, bilateral trade has shown some progress, increasing the volume of both exports and imports. Spain is Hungary’s tenth-largest customer, preceding Croatia, Belgium, and Sweden, and its fourteenth-largest supplier, preceding the United States, Ukraine, and Slovenia.

Spain’s investment stock position in Hungary was EUR 1,126 million in 2018, and is concentrated in the electrical and automotive sectors (metallurgy and machinery, motor vehicles, and other transport-equipment

manufacturing). Most of the investments in recent years have gone to the operations of companies established in the country. The Hungarian investment in Spain amounted to EUR 27,000 in 2019 and was mainly realised in the industrial sector. In short, Spanish business presence in Hungary is significant: Spanish companies are here from the automotive to the agri-food industry, from hotels to trams in Budapest or Debrecen. And it is enough to take a stroll in Váci utca and its neighbourhood to buy Spanish products.

I would like to conclude with a few general words about our traditionally good relations. Tourism between our countries, with fourteen direct destinations linking us, was thriving before the pandemic. In 2018, more than 286,000 Hungarian tourists arrived in Spain, while 186,000 Spanish tourists visited Hungary—our country was one of the top five destinations for Hungarian tourists. There is a growing interest in the Spanish language here: it can now be studied in primary education, seven bilingual secondary schools, and the departments of Hispanic philology at four universities. The Instituto Cervantes does a remarkable activity both in language teaching and in offering cultural programmes.

As for the possibilities of improving our relations, ministerial-level political contacts in the recent years have undoubtedly contributed to oiling the wheels. I always underscore the Spanish companies’ skills in infrastructure development, and I am confident that tourist exchanges between our two countries (twelve direct destinations have been re-established) will pick up the pace once the COVID-19 crisis and the restrictions on mobility have been overcome and that the popularity of Spanish—a language spoken by more than 500 million people—keeps growing in Hungary. I am also convinced that Brexit opens new windows of opportunity and that we can be reliable partners in various matters in the EU at a crucial moment of its existence.