When Sánchez plays with the narrative: this is how Lagarde's private announcement to Calviño about the bank tax ends.

The icing on the cake of this unusual story, which reveals Pedro Sánchez 's temptation and game of fabricating a political narrative to disguise a setback, came this Tuesday. The Bank of Spain , with the approval of Governor José Luis Escrivá, published the Financial Stability Report criticizing the government's banking tax.

The institution has had to be consistent with what it defended back in October 2022 and, after describing all the contraindications of the tax criticized by the European Central Bank, it states in the document : "The Bank of Spain shares the conclusions and recommendations of the ECB's opinion." Nothing unusual except that when this tax was created, in the fall of 2022, then-Minister Escrivá disqualified the European bank's report: "They must have copied and pasted it from other times, in different contexts (...) Its status must be greatly lowered (...) In no case do I understand that the ECB wants to interfere with the legitimacy of a government to regulate these issues." That's what the minister said, who is now on a different wavelength.

But what was astonishing in Frankfurt at the time was what Sánchez said on that same November 4th. He blamed the ECB's ruling on its vice president: "Mr. De Guindos, who is well known in Spanish politics because he was the former Minister of Economy in the Popular Party government, the architect of the bailout of the financial sector, said it wouldn't cost Spanish society as a whole a cent. He was previously head of a major bank, Lehman Brothers (...) I appreciate Mr. De Guindos's willingness to help [with this ruling]."

However, Sánchez had already been fully informed by his then vice president, Nadia Calviño, of what ECB President Christine Lagarde herself had told him: that Guindos was not responsible, but rather the clear doctrine and decision of the Frankfurt institution. As this newspaper has been able to confirm, there was a meeting in the German city that was not disclosed at the time, which betrayed Sánchez. Calviño took advantage of the fact that she was accompanying the King on a visit to the ECB on October 19, 2022, to try to find out what the institution's opinion would be on the tax on banks then launched by the Spanish government.

Lagarde agreed to meet with Calviño and her then Secretary General of the Treasury, Carlos Cuerpo, on the sidelines of Felipe VI 's visit and arrived accompanied by the Dutch advisor responsible for legal affairs, Frank Elderson. Both explained to Calviño, the current president of the European Investment Bank (EIB), what was coming: the institution would follow the doctrine already applied to other countries, contrary to the Sánchez government's initiative. Its response would be critical and would thereby give the affected Spanish banks weapons to litigate against the State. In other words, a blow to the government, which also tends to boast of being at the forefront of European trends.

The ruling was released in early November, and Sánchez decided to focus his ire on Guindos. This facilitated the narrative that it wasn't the main European federal institution that was dealing him a blow, but rather an old political enemy of Rajoy's government. The ECB vice president countered that he had no "bias" within the institution. The ruling was approved by some 30 senior officials from across the Eurozone and signed by Lagarde herself, but Sánchez ignored these nuances and Calviño's knowledge.

The ECB took note of the government's reaction and, when María Jesús Montero extended the tax again last fall , it issued a similar critical opinion, which Sánchez had already chosen to ignore without insisting with Guindos.

As for Escrivá, he already embraces this ECB doctrine, which, whether debatable or not, disallows special taxes on banks on the grounds that they restrict their ability to grant credit and also fragment the single banking market that is intended to unify.

Nor is the European Commission 's criticism of the government's attempt to stop BBVA 's takeover bid for Banco Sabadell, approved by the National Commission for Markets and Competition and the ECB, surprising due to inconsistency. Governments blather on about the lack of Banking Union as a pillar of the Eurozone, but at the same time they place obstacles in the way of the market, whether through transnational mergers like the German government, or national ones like Giorgia Meloni 's Italian government or Sánchez's. In the case of Sabadell, stopping its merger is fundamental for all the PSOE 's various Catalan partners, who are key to its continued power. Brussels doesn't like this impediment, but Teresa Ribera isn't there. We'll see what the narrative factory has in store.