Spain Premier Names Treasury Head Cuerpo as Economy Minister

Rodrigo Orihuela and Macarena Muñoz
·3 min read
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(Bloomberg) -- Spanish Prime Minister Pedro Sanchez appointed treasury head Carlos Cuerpo to be his new economy minister as growth slows and the government tries to roll back some household-support policies after inflation eased.

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Cuerpo, 43, will take over from Nadia Calvino, who’s stepping down after five-and-a-half years to run the European Investment Bank. As secretary general of Spain’s treasury since 2021, Cuerpo was already working in the economy ministry under Calvino.

Besides overseeing government debt management and financial regulation, Cuerpo’s role also involved Spain’s participation in meetings of European Union finance ministers. The economist previously worked as a top official at the Spanish budget watchdog known as Airef and as an analyst at the European Commission.

In an interview with Cinco Dias published on Wednesday, Cuerpo said that investors know that after Calvino’s departure there will be continuity in policies and in the technical quality of the measures that come from the ministry. He also said financial support provided to the region of Catalonia is “positive” for the sustainability of Spain’s debt.

Socialist leader Sanchez won reelection as prime minister in a confidence vote in parliament in November, with the backing of Catalan separatists. His new minister will tackle an economy facing slower growth, while also having to deal with the phasing out of a barrage of inflation-relief policies, including tax cuts on food and power, and subsidies for transportation.

Still, the Spanish economy is in healthier shape than most of the euro area, as the region flirts with recession. Spain is expected to continue growing in 2024, unemployment is hovering near the lowest in about 16 years and its budget complies with European Union rules.

Nadia Calvino’s departure marks a major loss for Sanchez, under whom she also served as deputy prime minister, but it will allow him to reset working relations within his cabinet. While Calvino had an excellent relationship with Budget Minister Maria Jesus Montero, who succeeds her as first deputy premier, she repeatedly clashed with Yolanda Diaz, the labor minister, and with Jose Luis Escriva, the minister for digital transformation who is also one of Sanchez’s key economic advisers.

“The capacity to seek consensus is what will reinforce the credibility of our action,” Cuerpo said on Friday. “As Nadia likes to say, we have to act with technical rigor, but always with kid gloves.”

The economy ministry plays a crucial role in relations with Brussels, as the EU executive pushes countries to cut deficits. Spain is also the second-biggest recipient of EU recovery funds, money Sanchez and his ministers say can be used to transform country’s industry. Cuerpo will also have to help name the central bank governor, with Pablo Hernandez de Cos’s term set to end in June.

At an event in Madrid marking his appointment as minister, Cuerpo spoke about his family’s history. He shared that his grandfather was barely able to study due to the civil war and had to start working from age 9 in one of Spain’s poorest regions, and that his parents emigrated to Switzerland to give him and his brother opportunities they hadn’t had.

“I have full conviction that we’re going to succeed, for a simple reason: we can’t allow ourselves to fail,” Cuerpo said, adding that he owes it to Calvino and Sanchez. “And I owe it to my family and the new generations that have to have the opportunities that our elders weren’t able to enjoy. And we owe it to our elders, as they are the ones who brought us here.”

(Updates with Cuerpo’s comments from eighth paragraph.)

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