Bursting the Bubble

Spain: looking for a new government

29 February 2016 | by

National elections took place in Spain more than two months ago, and yet, the country does not seem any closer now to having a new government that it did the 20th of December. During these two months, we have seen all parties negotiating with each other, but there is skepticism about their actual willingness to reach an agreement. The Parliament will hold the first voting session on March the 1st, when the socialist leader Pedro Sánchez will try to find enough support from the other members of the chamber in order to get elected as Prime Minister. This, however, is highly unlikely to happen.

The last elections had results with no precedent in Spain. The electoral victory was for the Popular Party (Spanish conservatives, now in office), with a second position for the PSOE (the traditional socialist party). However, the apparition of Podemos (anti-establishment left party) and Ciudadanos (center-right) with a 34% of the votes in total has led to a party configuration unseen in the democratic history of Spain, leaving the Parliament more fragmented than ever. There is no clear majority for the left or for the right, or at least not a clear one that is able to form a government. While the absolute majority in the chamber stands in 176 MPs, the combination of Ciudadanos with the Popular Party only sums 163 MPs. On the left, PSOE and Podemos account for 159 MPs together. Furthermore, the Podemos parliamentary group is formed by a series of territorial coalitions, not fully willing to follow the same line as the core of the party led by Pablo Iglesias. The rest of the seats in the Parliament are mainly occupied by regional nationalists. Given this situation, which are the possible scenarios for Spain at the moment?

Scenario 1: Great Coalition

Mariano Rajoy, current Prime Minister in function, keeps asking for a national agreement similar to the one in Germany, where the SPD supports Merkel’s CDU. He calls upon the delicate economic situation of the country and the need to stand together for the unity of Spain –in relation to the nationalist challenges coming from Catalonia-, and thus keeps asking Ciudadanos and the socialists to take part in a Great Coalition. He claims that stability is needed in order to keep implementing the necessary economic reforms, and asks the other two parties to act responsibly in order to achieve this aim. Even if the Ciudadanos could eventually agree to that scenario, the socialists have repeated several times that they will under no circumstances support an agreement with the Popular Party, claiming it is too affected by corruption. In a situation where the socialists are directly competing with Podemos for similar electorate, they can’t afford to be related with a corrupt, right wing pro-establishment party.

Scenario 2: PSOE + Ciudadanos

Both Ciudadanos and the PSOE seem to understand each other well, and they have even reached an agreement for a series of constitutional reforms in order to support Pedro Sánchez at the investiture voting. According to the polls, this scenario is the one preferred by voters. However, these two parties together count only with 130 MPs, and even if they got the support from other small parties, the most optimistic calculations gives them no more than 143 votes. This implies that no agreement is possible without the approval, or at least the abstention of either Podemos or the Popular Party. In the case of Podemos, they have already stated that they are not willing to support a right-wing party (Ciudadanos) in any case, even if the measures in the agreement between Ciudadanos and the socialists are all related to democratic regeneration, and are all included in the Podemos electoral program. On the other hand, the Popular Party keeps claiming that, if Ciudadanos and the PSOE want their support for a coalition, it will have to be under their leadership, since they are the ones who won at the elections.

Scenario 3: PSOE + Podemos

Podemos have offered themselves to form a left coalition government with the socialist party where Pablo Iglesias would be vice-president. They have set all their conditions in a very ambitious 90-page document that covers not only policy goals, but also the role they expect to have in a series of institutions, ministries and national agencies. The document does not leave a lot of room for the PSOE to negotiate or to fit their electoral program into it, and it seems that Podemos is using it more as a pre-campaign act than as a true first step to carry out negotiations.

The situation in Catalonia is key for this agreement: PSOE and Podemos counting with only 159 MPs, they would need the support from the Catalan nationalist parties to have parliamentary support. These, however, are not willing to stand by the coalition without the promise of an independence referendum, a condition that the socialists could never agree with. The fact that Podemos too has set the Catalan referendum as a red line, placing it even before welfare and social agreements – an area where they could easily agree with the socialists- supports the idea that they are not actually interested in governing together and that they’d rather force new elections.

Scenario 4: New elections

In the case where the four parties prove unable (or remain unwilling) to find an agreement with each other, we would arrive at our last scenario: new elections. How likely is this to happen, and what would be the consequences? The answer to both questions remains uncertain. Rajoy has been heard at the last European Council saying that the most likely outcome is for new elections to take place the 26th of June, and he is certainly one to trust, being one of the main actors involved. However, polls up to now keep telling us that even if this happened, results from December would barely change, so that we would find ourselves six months later with the same political scenario and the same actors, but with no government.

The next few weeks will be key determining the final outcome. Maybe the Popular Party will finally agree to an abstention, allowing a coalition between the PSOE and Ciudadanos to take office. They definitely have incentives for doing this: with new corruption cases within the party being unleashed almost every day, they could lose votes in favor of Ciudadanos in the case of new elections. Maybe Podemos, afraid of not being able to keep together the territorial coalitions, ends up finding an agreement based on democratic regeneration and measures against corruption with Ciudadanos and the socialists, but this would mean renounce to the Catalan referendum and probably their support in Catalonia. Or maybe, we will just find ourselves at the beginning of July, with the exact same situation from the beginning of the year, starting this strategy game among the four main parties once again.

What do you think?