Francisco de Goya received, as appears in the archive of the Banco de San Carlos, the predecessor of the Bank of Spain, 4,500 reales de vellón for a full-length portrait that he made in 1788 Francisco Cabarrus, the first governor of the central bank. Cabarrús was a Frenchman, like Goya himself, who established good relations with the enlightened men of the time, Jovellanos, Floridablanca or the Count of Aranda, and his good offices made it possible for Joseph I Bonaparte made him his Minister of Finance during the French occupation.

In a valuable study* carried out by the economist Peter Schwartz Regarding Cabarrús, he remembers that he was born in Bayonne in 1752 into a family of merchants with corsair traditions, and that he had received an exquisite education that can even be seen in the painting painted by Goya, of respectable dimensions, in which he appears wearing the suit. aristocratic style of the time: jacket, jacket and trousers, which became the antecedent of the current gentleman's suit: jacket, vest and trousers.

Being an heir does not guarantee offspring, and the reality is that Spain lost the pulse of modernity for many decades.

Cabarrús, not in vain, is one of the best exponents of that time, and in some way he comes to be the epitome of a Spain that exalted him for his extraordinary knowledge of finances – he helped put order in the battered public treasury -, but who subsequently imprisoned him for five years on account of those palace intrigues of which this country has always been fond. Cabarrús, in any case, as highlighted by the economic historian who best knows his work, Pedro Tedde de Lorca, represents that duality between the old regime and the emerging society of the first third of the 19th century that in those years, precisely in Spain, had put the term liberal into circulation as opposed to the conservatives. The Bank of Spain, in short, in its different nomenclatures, He is a child of the Enlightenment.

Being an heir, however, does not guarantee descent, and the reality is that Spain lost the pulse of modernity for many decades. Also in the Bank of Spain, by the way, the third oldest issuing bank in the world, after the Bank of Sweden and the Bank of England. The vast majority of the 70 governors that this country has had since another reformist, Ramon Santillan, reinvented the central bank with its current name, they have been a mere appendage of political power. It is likely because of an old vice, still present, that has to do with the separation of powers.

Moscow gold

This list includes aristocrats, former ministers, industrialists protected by the elites of the current regime and few or very few reformers, except in isolated cases, such as the republican intellectual Luis Nicolau d'Oler, who had to deal with the civil war at the head of the issuing bank on the Republican side. The political instrumentalization of the Bank of Spain throughout its long history has been such (until 1962 it was not nationalized) that even the Bank itself Juan Sardá, the mastermind of the 1959 Stabilization Plan, saw one of his books seized by Franco itself because it accurately revealed (the archives are visible to all) the final destination of the famous Moscow gold without discovering any irregularities.

The Bank of Spain of 2024 is very different from the one left by its predecessors, some authentic runners of political power

The Bank of Spain has been, in short, an instrument of political power, and only well into democracy has it been able to have a certain autonomy, embodied in the 1994 law, forced by Europe in order to access monetary union. Autonomy, it must be said, more formal than real in some cases, as demonstrated by its role in subsequent economic crises.

The election of the current governor, Pablo Hernandez de Cos, the sign of the times changed. Not because of his personality and his knowledge of the economic and financial world, that too, but, above all, because the paradox occurred that his appointment was published in the BOE on May 30, 2018, that is, just 24 hours before that the official newspaper published the appointment of Pedro Sanchez as president of the Government. The first was elected by the Popular Party and the second by the majority with which the motion of censure passed. Although it is true that in the past and temporarily, governors and Governments of different character have coincided, it is the first time that this has occurred in a complete mandate: six years. That is, a pure and simple cohabitation.

And the reality, contrary to what one might expect, it is already known that Spain is a country punished by ideological apriorisms, is that the separation of powers has worked. The Government has done its job and the governor has done his, each one from his own perspectives. The figure of Hernández de Cos, even, has been positively valued by socialist leaders that highlight its international projection and, above all, having opened a new stage in the bank with a successful policy of transparency (the governor himself has lavished himself in multiple events) unimaginable not long ago.

Appointments policy

The Bank of Spain of 2024, in short, is very different from the one left by its predecessors, some of them authentic runners of political power. Another thing is a fundamental discussion about whether the ECB or the governors should have a certain technocratic character, which is the model chosen by the EU, or, on the contrary, they should represent the interests of the people by expanding their functions, not just controlling inflation, but also the exchange rate or employment. The technocrats, as you know, They are not exempt from ideology.

It is up to the Government to take the initiative, but it is no less important that the PP must also assume the legitimacy of the Executive.

The cohabitation formula, in any case, has worked, but now, and given that the governor's mandate expires in less than a month (the effective cessation is June 11), It is the Government who must decide his successor (the mandate is non-extendable). Given the poor appointment policy that the Executive has made in the past – CIS, EFE agency, Correos… – there is little reason to expect a strategic turn, but given the importance of the Bank of Spain, it is to be expected that it will be guided by professional reasons. .

Among other reasons, because the central bank, although it has lost many of the exclusive powers it had in the past, still has very relevant functions. The first, as the representative of Spain in the ECB, with all that this entails, but also for having a formidable research service, whose fundamental task is to make a good diagnosis of the economic reality of the country, in addition to other functions such as surveillance of the financial system as a whole.

Historically, although with notable exceptions, the two majority parties of the political system have agreed on the governor and the deputy governor, depending on who controlled Moncloa, but we do not have to go through Salamanca to observe that the current climate of political tension is not the best for agree on the successors of Hernández de Cos and the deputy governor, Margarita Delgadowhose mandate (also non-extendable) expires on September 11.

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It is evident that It is up to the Government to take the initiative in this matter to agree on successors, but it is no less true that the PP must also assume the legitimacy of the Executive to choose its candidate, something that, unfortunately, and irresponsibly, is called into question on too many occasions, which encourages think that consensus will be difficult.

The outgoing governor himself has already contacted each other (the Minister Bolaños is a former employee of the bank) so that the renewal is agreed upon, but, at the moment, there is no news. The least important thing, even, are the names, and that the usual medical team has appeared in the media without reliable information, but what is relevant is that the Government assumes that the independence of the Bank of Spain is not only a European mandate , but rather reflects the institutional quality of the country. And, of course, that the opposition incorporates into its daily arguments that the Executive has the right to propose a name as long as it meets the necessary requirements, perfectly assessed in the Law of Autonomy of the Bank of Spain: recognized competence in monetary or banking matters. That's enough.

*Writings of Francisco Cabarrús Illustrated economist. Royal Academy of Moral and Political Sciences. ICO Bank of Spain Foundation. 2023.

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