Spain's Sánchez dodges backlash over Huawei deal amid EU and US concerns
As Pedro Sánchez prepares to depart for the Canary Islands on his annual summer retreat, yet another scandal has emerged that he is unwilling to address: his government's €12 million contract with China's Huawei, which involves the storage of sensitive judicial wiretap data.
The deal, revealed earlier this month, has triggered sharp criticism at home and raised alarm in Brussels and Washington over alleged security risks related to Huawei's ties to Beijing.
Sánchez made no mention of the controversy during his last press conference of the summer on Monday, and his government has refused further comment, despite growing pressure both domestically and from international allies.
In a statement to Euractiv on Friday, a European Commission official called the contract with Huawei a "national decision" but emphasised that Huawei 'represents materially higher risks' in critical infrastructure like 5G.
As first reported by the Financial Times , this muted warning came as Brussels urged EU member states to phase out the Chinese vendor in favour of more trusted EU alternatives.
Washington also weighed in , with senior lawmakers on the US Senate and House intelligence committees calling for a review of intelligence sharing with Spain, fearing that secrets could be leaked to the Chinese Communist Party.
The controversy over the contract comes at a sensitive time for Sánchez, who is already under scrutiny in a separate domestic scandal involving alleged influence-peddling. It also highlights Spain's unusually close ties to China at a moment when the EU is hardening its stance toward a country it has labelled as 'a systemic rival'. Bad optics A meeting on Sunday between Socialist Catalan leader Salvador Illa and Huawei executives in Beijing – though described as 'institutional' and unrelated to the contract – has added to the negative optics.
The Spanish Interior Ministry, which had previously defended the procurement by asserting there were no security risks and that the public tender was independently awarded, declined to respond to a request for comment from Euractiv regarding the Commission's latest warning. A spokesperson for Sánchez did not respond either.
A spokesperson for Huawei Europe said: ' All Huawei products available in the Spanish market fully comply with local laws, regulations, and applicable product admission criteria and standards.'
Regarding the security concerns over storing judiciary wiretap, they added that 'all the information stored in hardware belongs to and is at the exclusive disposal of the customer.' Spain's China ties under scrutiny The decision to proceed with Huawei has drawn criticism from Spain's conservative opposition. Popular Party leader Alberto Núñez Feijóo accused Sánchez of compromising national security and questioned the influence of former Socialist premier José Luis Rodríguez Zapatero – a key figure in Spain's close relationship with Beijing.
Zapatero, widely regarded as Sánchez's political mentor, reportedly lobbied for the implementation of the Huawei 5G network in Spain, despite the Commission's mandate for EU countries to phase out such 'high-risk' equipment over espionage concerns. Critics accuse him of being behind Spain's abstention in Brussels last October, when the EU voted on tariff measures against Chinese-made electric vehicles.
Local media, including investigative outlet Voz Populi, have also highlighted his connections to Beijing through the Gate Center – a think tank known for promoting Chinese interests in Spain – where he serves as president of the advisory council. His multiple trips to China to promote diplomatic and commercial relations have led critics to accuse Zapatero of lobbying for China within the Sánchez government . Huawei troubles in Brussels While some governments – such as Spain and Hungary – continue to work with Huawei, others like Sweden or France have accelerated efforts to phase out Chinese equipment from their mobile networks, viewing it as a potential conduit for Chinese state espionage – a claim Huawei denies.
Adding to the controversy, Huawei is under investigation in several EU member states, most recently in Belgium, where authorities launched a wide-ranging probe in 2025 into alleged corruption involving EU officials. According to exclusive reporting by Euractiv and its partners , investigators are examining whether the company's lobbying efforts may have crossed into bribery. Huawei has not been charged with any offence and denies instructing employees to break the law.
Belgian intelligence services have also assessed potential espionage risks, having interviewed Huawei staff in recent years, according to documents seen by Euractiv .
Since the investigation began, Huawei has been banned from meeting with members of the European Parliament and the Commission.
(aw)
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Euractiv
14 minutes ago
- Euractiv
Instagram and TikTok failing to flag AI-generated content, NGO finds
Anupriya Datta Euractiv Jul 31, 2025 07:00 3 min. read News Based on facts, either observed and verified directly by the reporter, or reported and verified from knowledgeable sources. Want to keep reading? Get a subscription on Euractiv Pro and elevate your political insight! Discover Euractiv Pro For corporations Already have an account? Log in
Euractiv
an hour ago
- Euractiv
Why the EU-US ‘deal' hasn't really been agreed
'If we do a deal today, with the European Union, that will be the end of it,' Donald Trump said on Sunday, barely an hour before the bloc agreed the 'biggest trade deal ever' with its largest trading partner. 'We'll go, I guess, a number of years, at least, before we have to even discuss it again.' Not for the first time, the US president's prediction proved wildly inaccurate. Indeed, US officials have since openly admitted that key aspects of the agreement, which will leave most EU exporters to the US facing a 15% blanket levy, still need to be ironed out. 'There's plenty of horse trading still to do,' US Commerce Secretary Howard Lutnick told CNBC on Tuesday. The EU's digital services taxes, Brussels' 'attack' on US tech firms, and US tariffs on steel and aluminium are still 'on the table', he added. Underscoring Lutnick's point, over the past week Brussels and Washington have released separate press releases on the deal that in some places directly contradict each other, including on whether some of the EU's €8 billion worth of metal exports to the US will be exempt from Trump's 50% tariff (the EU says yes, the US says no). Other points of disagreement or deep uncertainty include the timeline for the imposition of tariffs on the EU's €120 billion worth of pharmaceutical exports; whether alcohol will be tariff-exempt; and how – or if – Brussels will 'streamline' the sanitary certification procedure for American pork and dairy. Olof Gill, the Commission's spokesperson for trade, admitted on Tuesday that such discrepancies exist, but suggested they would be 'clarified' in a non-legally binding EU-US joint statement that Brussels 'hopes to have very soon'. EU officials and diplomats also note that there have been extensive contacts between Commission officials and Trump's team since Sunday – a claim corroborated by Lutnick during the CNBC interview. And key member states, like France, are also gearing up for further negotiations. 'France has always maintained a firm and demanding stance. This is not the end of the story, the negotiation has to continue," French President Emmanuel Macron told his ministers three days after the deal was officially signed. A deal in name only 'These disagreements reflect the extremely short time-frame and generally chaotic nature of the deal – if you want to call it that, because it's not really a deal,' said Arthur Leichthammer, a policy fellow for geoeconomics at the Jacques Delors Centre. 'It's just an announcement, or an informal understanding.' Leichthammer added that these disparities are no accident, but instead form a crucial pillar of Trump's negotiating strategy. 'There's enough unsettled bits he could use as future leverage, which he could renege on if he wants to,' he said. Jean-Luc Demarty, former Director-General for Trade at the Commission, similarly warned that Brussels' acceptance of a 'deal' where so much is still left to be negotiated 'is not a good method'. However, he emphasised that Trump wouldn't 'necessarily respect' the deal even if its terms were crystal clear, pointing to the self-proclaimed 'dealmaker's' decision to renege on an agreement struck during the Commission presidency of Jean-Claude Juncker in 2018. 'We had a joint statement where we were supposed to engage in a tariff negotiation [on] industrial goods, without agricultural products,' he said. 'It was accepted by Trump. And after a few months, Trump told us: 'Sorry, guys. We need agricultural products in.' So even with a statement, it doesn't change a lot.' Risky specifics Some analysts also warned that the more specific parts of the deal – which include EU pledges to purchase $750 billion worth of US energy and invest $600 billion in US infrastructure over the remaining three years of Trump's presidency – pose potential risks. Commission officials have claimed that these promises, which are widely considered to be unrealistic and cannot be legally enforced by Brussels, were mere 'projections' that were based on the 'very clear intentions' of private companies. Such considerations have led several analysts, including Paul Krugman, a Nobel Prize-winning economist, to claim that Europe 'played Trump for a fool' during negotiations. 'What the EU actually promised on investment was nothing, Nichts , rien ,' Krugman wrote on Tuesday, adding that the pledge to purchase more US energy is similarly 'not going to happen'. Other analysts, however, warned that these pledges risk backfiring on Brussels. 'This is a concrete benchmark that Trump can refer back to – and this poses a risk,' said Leichthammer, who noted that the 2018 joint statement agreed by the Juncker Commission contained no numerically specific purchasing or investment commitments. 'Given Trump's preference for continuous dealings rather than one-off agreements, he can come back and say: 'Actually, you have missed that mark. So the deal is dead, and we're going to do what we want.'' Eddy Wax and Elisa Braun contributed reporting.
Euractiv
an hour ago
- Euractiv
Europe dodged a trade war, but its electricity market is broken
Apostolos Thomadakis is Research Fellow and Head of the Financial Markets and Institutions Unit at the Centre for European Policy Studies (CEPS), and Head of Research at the European Capital Markets Institute (ECMI). This week's EU-US tariff deal has been spun as a diplomatic success. But beneath the surface, the outcome is sobering. Washington keeps its 15% tariffs on key European exports while Europe pledges closer trade and investment ties with a country whose industrial strategy is increasingly dictated between rounds of golf. The real question isn't whether Europe avoided a trade war – it's whether it gave away too much, and whether the trade-offs made are consistent with any serious long-term competitiveness strategy. Because accepting structural tariffs while simultaneously rolling back parts of the EU Green Deal is not strategic patience. It's strategic incoherence. And nowhere is this contradiction more evident than in Europe's electricity market, the very foundation of its green transition. Despite years of reform talk, the core design of Europe's power market remains dangerously outdated. Wholesale electricity prices are still dictated by the marginal cost of gas-fired plants. This means that even when wind and solar provide the majority of supply, consumers still pay prices shaped by the most expensive generator on the grid. In 2022, when gas prices exploded following Russia's invasion of Ukraine, this mechanism pushed power prices to record highs, forcing entire industries to shut down and households into energy poverty. This is not just a bug. It's a feature of a market architecture that was never built to deliver resilience – only efficiency under stable conditions that no longer exist. Today, Europe is in the paradoxical position of producing record amounts of clean energy while remaining shackled to fossil fuel price volatility. Every time gas prices jump, electricity follows; jeopardising the electrification of transport, heating and industry that lies at the heart of the Green Deal. Yes, reform is on the table. But it remains incremental, buried in consultations and bogged down in jargon. The fundamental truth remains: Europe's electricity market cannot enable a 21st-century transition while operating on 20th-century principles. This isn't just an energy story. It's a powerful and direct parallel to the core flaw in the financial system. In finance, just as in the energy market, long-term sustainable investment is constantly held hostage by the logic of short-term, speculative gains. In both cases, the solution is architectural. We need to redesign the 'software' of these markets to correctly price risk and reward long-term resilience. In other words, ensure the 'price' of capital is no longer dictated by the most destructive parts of the system. The same principle must now be applied to energy. Europe needs to decouple electricity prices from gas, expand the use of long-term contracts (like power purchase agreements and contracts for difference), and build out the grid infrastructure that allows low-cost renewable power to flow across borders. Countries like Spain have shown it's possible – their use of long-term contracts and domestic renewables helped buffer them from the 2022 crisis far more effectively than markets like France or Germany, where the link between gas and power prices remains entrenched. Meanwhile, the US (once Europe's green partner) is backtracking. Critical clean energy support under the Inflation Reduction Act is under pressure, with projects stranded and investment pipelines drying up. Yet this moment presents Europe with a rare opportunity: to attract viable US projects with targeted relocation incentives and industrial policy tools it already possesses. If done strategically, this could reinforce Europe's leadership in clean technology while accelerating its energy independence. What Europe doesn't need is more high-risk, high-cost LNG from hurricane-prone regions with gutted climate science and forecasting capacity. Studies already show the EU is well on track to meet its energy needs through accelerated renewables deployment, not new fossil dependencies. Doubling down on fossil-based import dependencies is not resilience. It's regression. Ultimately, this is about power – both electrical and geopolitical. In a fractured world, fossil fuel geopolitics cannot be the foundation of future partnerships. Climate cooperation can. By aligning Europe's foreign, trade, investment, and innovation policies with its climate agenda, the EU can rebuild multilateralism around shared challenges – not extractive competition. The electricity market is just one piece of this puzzle. But it is a foundational one. Without a functioning pricing system that rewards resilience, Europe will continue to pay strategic premiums for tactical mistakes. Avoiding a trade war is not enough. Avoiding a self-inflicted energy crisis must now be the priority.
