Pedro Sanchez
Spain’s prime minister Pedro Sánchez wants Madrid to host the EU’s new anti-money laundering agency. He also wants his deputy to head the European Investment Bank. He likely won’t get both © Javier Soriano/AFP/Getty Images

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Good morning. Portugal’s president called a snap election last night, hours after Spain’s prime minister announced a deal with Catalan separatists to remain in power.

Our man in Madrid brings us the latest from a turbulent 24 hours on the Iberian peninsula. And before that, Laura explains the latest big prize being fought over by EU capitals: the headquarters of the bloc’s new money-laundering agency (no, really).

Have a good weekend.

Horse-trading

The race to host the EU’s new anti-money laundering authority (AMLA) is coming to a head: today is the last chance for countries to submit their application.

But the contest has been tangled up with another bid to lead the European Investment Bank (EIB), write Laura Dubois and Javier Espinoza.

Context: Member states have outshone each other in recent months with poster campaigns to host the new watchdog, which is to be set up under new rules to tackle money laundering that are currently being negotiated.

Among the most vocal candidates are Madrid, Frankfurt and Dublin, though a large number of countries such as Lithuania, Latvia, France, Luxembourg, Belgium, Austria and Italy have also said they want to apply, and more could join by the deadline at six o’clock this evening.

German finance minister Christian Lindner yesterday banged the drum for Frankfurt, saying it already hosted the European Central Bank and the banking supervision SSM, which would facilitate “the direct supervision of Europe’s largest financial service providers” for AMLA.

But others say that already having several agencies is an argument against them, and smaller member states should get a shot.

“It’s a good signal for new member states who are joining or those who have joined in recent years . . . that these institutions are spread around,” the Irish finance ministry said, adding that Ireland does not host any major EU institution.

EU officials say the AMLA race is also increasingly linked to that for the EIB presidency. Spain’s deputy prime minister Nadia Calviño is currently seen as favourite for the EIB job, but Madrid has also pitched for AMLA.

“If there is a prominent appointment for Spain at the EIB, it doesn’t necessarily look like they also get AMLA,” said a senior EU official involved in the discussions.

To complicate things further, member states won’t take the decision alone, as the European parliament will be involved for the first time. But both are still working out how exactly to decide. This has delayed AMLA’s establishment past the original plan of this January.

A decision on the EIB is expected in early December, officials say, which might hurry AMLA along too.

Chart du jour: Hangover

Russia used to be Carlsberg’s second-largest market, generating hundreds of millions of dollars in revenue. No wonder, then, that it was a prime target for preying oligarchs keen to appropriate western assets.

One in, one out

Politics is aflame in the Iberian peninsula after a week in which one scandal-hit government is on its way out and another is being born in a storm of condemnation, writes Barney Jopson.

Context: Portugal’s president Marcelo Rebelo de Sousa yesterday called a general election for March following the resignation of prime minister António Costa, who was felled on Tuesday by corruption allegations.

Costa’s Socialists won an outright majority in early 2022, but will struggle to repeat the feat after prosecutors executed a flurry of arrests and raids in a probe into allegations of corruption and malfeasance among public officials.

Costa denies wrongdoing related to the projects under investigation, including two lithium mines and a hydrogen facility. But his chief of staff was arrested, his infrastructure minister made a formal suspect, and prosecutors said some suspects had alleged that Costa intervened to “unblock procedures”.

Luís Montenegro, leader of the centre-right Social Democrats, says the Socialists have “lost and squandered” the faith Portuguese people once had in institutions.

In Spain, conservatives are levelling a similar criticism at acting prime minister Pedro Sánchez, but with greater venom, after he sealed an amnesty deal with Catalan separatists yesterday.

The pact will give Sánchez, caretaker leader since an inconclusive July general election, enough parliamentary votes to begin a full second term. But the price is an amnesty — something he once said was “unacceptable” — for hundreds of people facing prosecution or prison terms over the failed 2017 bid for Catalan independence.

Sánchez now says an amnesty is necessary to defuse the Catalan conflict and shift it back into the realm of politics. But conservatives and the Socialist old guard accuse him of trashing the rule of law to preserve his grip on power.

“Sánchez is giving in to the blackmail of the pro-independence movement,” said Alberto Núñez Feijóo, leader of the conservative People’s party. “It’s a complete and unqualified surrender that all Spaniards will pay for with our taxes, our rights and our dignity.”

What to watch today

  1. EU finance ministers hold budget discussions.

  2. Nato secretary-general Jens Stoltenberg meets German defence minister Boris Pistorius.

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