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The laborious transformation of the Spanish political system

Will the Spanish people be going to the polls for the fourth time in four years? This is the question on everyone’s lips one week from the 23 September deadline(1) by which Pedro Sánchez must have reached an agreement, failing which fresh elections will be held on 10 November. With the left tearing itself apart amid ego struggles and communication battles, political families have continually passed the buck for this likely election in a summer saga punctuated by verbal sparring and U-turns. 

The laborious transformation of the Spanish political system

 

The summer saga

With 123 seats, the PSOE won the 28 April elections but lacked a parliamentary majority, which means it must reach a compromise with other groupings to form a government. Pedro Sánchez waited until mid-July, when the great regional bargaining was over(2), to appear before the Cortes Generales for a vote he already knew he would lose. Elections to the autonomous communities’ legislatures on 26 May confirmed what was already apparent the day after the general election. The debate that is crystallising around the Catalan question, between the nationalists (who are defending greater regional autonomy, if not independence) and the constitutionalists (who are advocating for strict compliance with the Constitution), has been set aside while the left-right divide has come roaring back to the fore. Albert Rivera’s strategy to establish his Ciudadanos (Citizens) movement as the main right-wing opposition party has been called into question neither by Ciudadanos’s lacklustre showing in the regional elections nor by the defection of some of the party’s founding members, thus removing any possibility of a centrist coalition. The socialist leader therefore has no choice but to try to reach a compromise with the far left. This seemingly natural rapprochement is struggling to evolve into an agreement in spite of numerous appeals from civil society. The May 2018 alliance that made it possible to overthrow Mariano Rajoy’s government appears to have been more a marriage of convenience than a genuine convergence of ideas.

Pedro Sánchez would like a Portugal-style government in which the PSOE would govern on its own with the support of Podemos. But this desire, stated by Sánchez since July, has come up against the purple formation’s own desire to govern. The PSOE does not want a “government within a government”. What the socialists are most afraid of is Pablo Iglesias having a seat in the Council of Ministers. They fear they might not be able to manage the presence of a divisive political figure, some of whose positions contrast sharply with theirs, notably on the Catalan question.

In spite of Pedro Sánchez’s proposal a few days before the investiture to offer some Podemos figures roles in government, Pablo Iglesias categorically refused to play second fiddle, opting to abstain in the second vote in Congress. Buoyed by having consulted his electoral base (with 70% of those registered taking part in the consultation), he feels that, with over 40 members in the Congress of Deputies, Podemos is entitled to form part of a coalition government, with each party’s involvement in proportion to the number of votes it commands.

After this abortive attempt in mid-July, talks remained deadlocked throughout the second half of the summer. Pedro Sánchez’s refusal to meet with Pablo Iglesias, and the hostility that has taken root between the two, has ended up creating a climate of widespread distrust between the two political formations.

 

Gearing up for a repeat performance

While nothing is settled yet, the various parties are already in campaign mode. However, these fresh elections could culminate in a similar situation to that seen in April. The latest opinion polls predict a win for the PSOE (with between 139 and 147 seats), which would gain influence in the Cortes Generales, though without securing a majority. However, this is a risky bet for Pedro Sánchez. Voter fatigue in the face of yet another election could be costly for the PSOE at a time when the head of government’s image as someone who is able to compromise is seriously dented. Most opinion polls suggest that voters would prefer an agreement between the two left-wing parties over fresh elections. This is even more the case since the Socialist Party, which had benefited from the repercussions of its social policy, will have to present a much less positive report card to the Spanish people.

Lastly, during the April 2019 elections Pedro Sánchez faced a disunited right caught up in a leadership battle – a mistake the right is unlikely to repeat. Regional pacts showed that it was possible for the three right-wing parties to unite more broadly, or even to back a shared electoral list. In any case, that is the direction in which People’s Party leader Pablo Casado is leaning: he would like to bring conservatives together under a single banner, España Suma. Such an alliance would command almost 150 seats. However, another scenario remains a possibility – at least, the business community hopes so. Albert Rivera’s coming defeat could force the centrists to review their strategy and reach out to the socialists. The undoubted loser would be Podemos, which would emerge much weakened.

 

The cost of paralysis   

Following repeated elections in 2016(3), Mariano Rajoy was only able to form a government at the price of the socialists abstaining. There is no guarantee that Pablo Casado will adopt the same approach towards Pedro Sánchez. Unless a surprise deal is struck before 23 September and there is a clear majority in the next Parliament, Spain is once again heading into the unknown.

The prevarications of Spanish politics – which, for the time being, are far removed from market concerns – mask a political model that is on its last legs and struggling to emerge into something new. The need to learn to compromise is running up against the strategies of the two main parties, which continue to ignore the diversity of the political chessboard by favouring vassal relationships with new political formations. This paralysis has a cost. In the medium term, it constrains the State’s ability to act and delays the implementation of structural policies needed to confront a deteriorating economic environment. While the consequences of the political deadlock are partly cushioned by Spain’s federal structure, with regional governments continuing to operate, the autonomous communities could in turn be constrained. If a preliminary 2019 budget is not approved, they are likely to experience funding difficulties and are making their discontent known. They are requesting the release of a €5 billion advance in respect of excess taxes collected by the Treasury. But a government that is confined to managing day-to-day business cannot release these funds. This obstacle to autonomous community funding is not the only short-term consequence of the legislative paralysis. Delays in transposing European directives put Spain at odds with the European Commission, which could lead to financial penalties. Nor will there be room in the legislative calendar to pass a new budget before the European semester begins, and it is highly likely that the 2018 budget passed under Mariano Rajoy will continue to apply in 2020. Meanwhile, the socialists remain in government without being able to govern.

Face with what looks set to be a messy post-summer period, with the possibility of a hard Brexit and the anniversary of the 2017 Catalan referendum on 1 October, the socialist government’s room for manoeuvre remains extremely limited without any legislative approval.  

 

(1) Pedro Sánchez had two months with effect from the first investiture debate to reach an agreement. This deadline expires on 23 September.

(2) The period during which coalitions were formed following elections to the autonomous communities’ legislatures on 26 May.

(3) The same situation arose in 2015 when Mariano Rajoy, having failed to put together a majority following the December elections, was forced to call fresh elections in 2016.

 

Sofia Tozy - sofia.tozy@credit-agricole-sa.fr

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