Within the current international conjuncture, the European continent is grappling with multidimensional and continuous crises. Such environment of instability, encompassing crisis in the field of energy, migration, and environment, is driven by regional and global causes. Nevertheless, regardless of the source of these inconveniences, Europe is one of the regions most affected by them. However, every crisis carries within itself a number of opportunities. Thus, Iberia has taken the initiative to seize these opportunities.
As it is known, António Costa, Secretary General of the Socialist Party, came to power in Portugal in 2015. On the other hand, Pedro Sánchez, Secretary General of the Socialist Workers’ Party, became Prime Minister of Spain in 2018. Since Sánchez took office, the parties have maintained relations based on cooperation and solidarity. Ideological affinity has played a decisive role in this. Relations between the sides have widened and deepened, especially amid the crisis brought on by the war following Russia’s invasion of Ukraine.
The first cooperation between Madrid and Lisbon in the midst of the crisis created by the war was a coordinated appeal to the European Commission to contain rising energy prices. Spain and Portugal referred in their objections frequently to the renewable resources they use for electricity production. Moreover, these two governments import energy from North African countries, in particular Algeria, with whom they have deep bilateral and regional relations on historical, cultural and economic dimensions. This possibility, which Spain and Portugal have at their disposal, has made them more autonomous in terms of energy than other European states. Thus, the parties requested that they be allowed to set a ceiling price for electricity supply to soften the impact of rising gas prices on the electricity market. The European Commission (EC) approved this request in April 2022. Since the date of the EC’s acceptance of the request, Spain and Portugal have started to provide electricity services that are on average two times cheaper than other European countries.
The cooperation process between Spain and Portugal continued in October 2022 when Spain and Portugal came together with France to sign the Barcelona Agreement. The Barcelona Agreement paved the way for Spain and Portugal to export green hydrogen from the Mediterranean Sea to Marseille using their geopolitical advantage.
Germany has also joined recently the H2Med Green Hydrogen Pipeline Project, which is subject to this agreement, and as a result of the efforts carried out by the parties involved in the project before the EC, the project has been included under the scope of “common interest”. Therefore, it was decided that half of the costs of the project would be financed by European Union (EU) funds.
With Germany’s participation, the scope of the project has expanded, giving Spain and Portugal the opportunity to become leaders in Europe’s energy supply. Thus, Spain and Portugal created the “Iberian Exception” and gained a relative degree of autonomy from the other European countries in the energy sector with the decision adopted by the European Commission, while making other European countries dependent on them, in the same sector, through the H2Med Project.
The H2Med Project does not merely imply progress in the energy sector for both countries. Green hydrogen energy aligns with the EU’s legislation for a gradual transition to renewable energy. By 2030, 79% of the energy used by Iberia will derive from renewable sources, as a result of the current usage of renewable energy and the impact of this project. This results in Madrid and Lisbon leading the transition to renewable energy.
These two governments continued the momentum they had gained in their cooperation, through enery initiatives, in the tourism sector as well. The deflationary policy pursued by the governments throughout long periods of time prevented the rising inflation in Europe from affecting these countries, making Spain the country with the lowest inflation rate in Europe in 2022. Portugal, on the other hand, remained below the European average and ranked 11th.
The countries consolidated their policy with the “Cross-Border Tourism Strategy 2022-2024”, signed in November 2022, intended to make Iberia one of the most competitive and sustainable tourism destinations. At the moment, Spain is on track to catch up with the number of its tourists before the Covid-19 pandemic, while Portugal hosted the most tourists in its history in 2022. Hence, Spain and Portugal have reaped the fruits of their policy against the rising inflation in Europe.
While the parties continued to cooperate in both energy and tourism sectors, strides were also made towards “sustainability”, which encompasses energy supply aspirations. In fact, in December 2022, Spain and Portugal signed an agreement to strengthen cooperation to prevent drought in their shared river basins.
Having taken initiatives to tackle the current EU crises one by one, Madrid and Lisbon have also played an active role in the refugee crisis. Spain has received 164,000 Ukrainian asylum seekers since the start of the Russian-Ukrainian War, making it the 5th country in Europe with the largest Ukrainian migrant population. On the other hand, Portugal is the second European country to receive the highest number of children migrants from the Middle East, predominantly residing in Greece.
Spain and Portugal have seized the opportunities at hand and embarked on new initiatives. Spain’s presidency of the Council of the EU in the second term of 2023 will also be crucial within the sphere of these initiatives. The presidency will play a decisive role in the direction in which current activities and initiatives will evolve.
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