Spain has a new government, albeit a precarious one

Wednesday, June 6, 2018

Pedro Sanchez, leader of the Spanish Socialist Worker’s Party (PSOE), has come an awfully long way in the past 20 months. Back in October 2016, he was ousted from the party’s leadership following its worst election result in modern history. Fast forward to this week, and Mr Sanchez is Spain’s new Prime Minister, having successfully ousted Mariano Rajoy and his incumbent People’s Party (PP) government. But, gaining power may prove to be the easy part.  The path ahead for the new government looks tricky, and Mr Sanchez’s ability to navigate it will determine whether he can survive beyond the elections he has promised to call before 2020. 

 

The no-confidence motion that unseated Mariano Rajoy, the outgoing Prime Minister and leader of the centre-right PP, was the culmination of a long-running corruption scandal that has engulfed Rajoy and senior figures within his party. The scandal was known as the ‘Gürtel Case’. The accusations include money laundering and tax evasion, as well as a slush fund illicitly and secretly used by senior PP officials.

 

It is important to note that Rajoy himself was not personally accused of any wrongdoing, but the scandal could highlight his inept party leadership. Further, a slush fund would be politically suicidal at the best of times, but even more so at a time of severe economic distress in Spain, from which it continues to suffer. Political leaders dipping their hands into secret reserves to serve their own ends - whilst the Spanish people suffer from high unemployment and a severe recession - is not a good look. To make matters worse, testimony he recently gave, in which he suggested that he knew nothing of the scandal, was described as “not credible” by the courts.

 

Mr Sanchez’s PSOE instigated a no-confidence vote in Mariano Rajoy last week, and managed to secure the support of a constellation of smaller parties to form a voting majority. 180 deputies in the 350-strong parliament voted in favour of removing Rajoy and appointing Sanchez in his place. Indeed, it is a remarkable turnaround for a politician who looked unlikely to return to the political fray after his disastrous election in 2016. But his challenge has only just begun.

 

The new minority government will undoubtedly be weak. The Socialists themselves have 84 deputies, and must rely on a broad range of smaller parties in a ‘confidence and supply’ arrangement. Sanchez knows that passing significant new legislation is a long shot, but holding it together could prove tricky too.

 

Unfriendly arithmetic is not the only impediment to Mr Sanchez as PM. The ideological make-up of the new alliance further underscores the struggles he will face. His alliance consists of an ungainly array of parties, with a distinct lack of any unifying views. The PSOE will be joined by the far-left Podemos party, as well as the Basque National Party, two Catalan separatist parties and nationalist parties from Valencia and the Canary Islands. Aitor Esteban, a deputy for the Basque National Party, summed the situation up nicely, by telling Mr Sanchez: “Your government will be very complicated, weak and difficult”. Unifying this deeply fractured coalition will be an impossible task for Mr Sanchez.

 

It is the issue of Catalonia that makes Sanchez’s position weaker still, and his path ahead so complicated. The downfall of Mariano Rajoy was undoubtedly hastened by last year’s Catalan crisis, and Sanchez’s reliance on two fervently pro-independence Catalan parties within parliament leaves him vulnerable, and needing to strike a delicate balance. He has a clear incentive to keep the separatists happy and offer concessions. If he is seen to be too accommodating, however, he will surely be punished by the Spanish electorate, who are mostly against the Catalans and their pro-independence demands. Striking this balance will be difficult, and may require some master diplomacy, and perhaps some luck.

 

The new government seems to be taking some steps to calm concerns over its fragility. It has promised to enact the previous government’s budget, likely to minimise disruption and uncertainty that would damage Spanish assets on the financial markets. Sanchez has also pledged to “re-establish dialogue” with the regional government in Catalonia. This serves as a sign that he is willing to listen, but it may also be a foreboding signal of the troubles lying ahead.


Pedro Sanchez has come a long way in the past few years. But his battles are about to begin. He has promised new elections before 2020, but these may prove difficult. Hostile parliamentary arithmetic and the disjointed makeup of his governing alliance make passing legislation that may aid re-election a long shot. But it is Sanchez’s reliance on the votes of Catalan parties in parliament that leaves him so vulnerable, and his handling of this could be the true determinant of whether this government survives until the next election and beyond.

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