After a Vote of No Confidence, Spain Puts New Government in Motion
Implications for Spanish Politics and Parties with the New President, Pedro Sánchez
Article written by: Juan Luis Fernández, Public Affairs Senior Associate and Adrián Vidales, Public Affairs Senior Associate
After several months of judicial investigations, on May 24, the Supreme Court ruled the existence of a “system of institutional corruption” in the Popular Party during the years in which former President Mariano Rajoy was in charge of important responsibilities in the Popular Party.
Along the following days, some opposition parties, like Ciudadanos and the Socialists (PSOE), stated that Rajoy’s era had come to an end. Nevertheless, it was the Socialist leader Pedro Sánchez who presented a motion of no-confidence that was finally approved on 1st June with the support of 180 deputies from Unidos Podemos, ERC, PNV, PDECAT, EH Bildu and Nueva Canarias. The Popular Party (PP) and Ciudadanos (Cs) voted against the initiative, while Coalición Canaria abstained. As a result, Pedro Sánchez became the new president of Spain.
Implications for Spanish politics and parties
The triumph of the no-confidence motion altered the previous state of play in the Spanish political scenario and brought the Socialist Party to power after years of internal convulsions and unfavourable electoral expectations.
· The PSOE gains a central role in the public and political debate since the president Pedro Sánchez has announced its plans to complete the current term until 2020. Nevertheless, the weak parliamentary support and the impact of the regional and European elections of May 2019 will determine the governmental stability.
· Ciudadanos, the liberal party that was trying to follow Macron’s path in Spain, has to reconsider its strategy after months of great electoral expectations and favourable polls.
· Despite the loss of the Government, the Popular Party has gained time to renew its leadership and avoid an imminent call for elections. The party is now holding its primary elections that will elect its new president by the end of the month.
· After weeks of internal disputes and reputational crisis, the leftist party Podemos played a key role in the no-confidence motion. Their votes will be important to reach parliamentary majorities and enable Pedro Sanchez’s plans for the upcoming months.
Profile of Pedro Sánchez’s Government
The profile of the new ministers constitutes an attempt to reconquer and expand PSOE’s current electoral base. The structure of the departments defines not only the priorities of the new Government, but its program regarding the next elections: equality, ecology and innovation to compete on the left; and liberalism and Europeanism to compete in the centre.
The meticulous selection process managed by Pedro Sánchez has tried to send a message to different stakeholders. Nadia Calviño (Economy), former Director-General for Budget at the European Commission, has calmed down the financial climate and investors’ expectations with a liberal and pro-European message, while Josep Borrell (Foreign Affairs) will counter the external influence of the Catalan pro-independence movement. On their part, Carmen Calvo (VP and Equality), Carmen Montón (Health and Consuption) and Teresa Ribera (Ecologic Transition) will try to approve social measures to engage their traditional leftist electorate.
The Challenges of the New Government
In general, the new Government faces a lack of political support at the Parliament and a difficult arithmetic (84 of 350 deputies are socialists) that will limit its capacity to approve regulations and shape its own agenda. Otherwise, the Government could achieve “symbolic” milestones in social matters or resort to concrete regulatory tools, like Royal Decrees, that depend on the executive power.
Although Pedro Sánchez has announced his intention to rule the Government until 2020, his roadmap will depend on two key aspects:
State Budget Law for 2019. Pedro Sánchez has accepted the Budget proposed by the previous Government, which will allow him some months of stability. Nevertheless, the Socialist Government will have to build-up a complex parliamentary majority for the next year.
Regional and European Elections of May 2019. The pre-electoral atmosphere will influence the political agenda and make agreements between parties more difficult. Furthermore, the results obtained by the PSOE in these elections will be perceived as a plebiscite on the performance of the Government.
Apart from these two political challenges, other variables and issues that will determine the agenda:
The Catalan issue. Pedro Sánchez has promised to re-establish dialogue with the new Catalan Government. Although unilateral decision-making is unlikely to happen again, the tensions between both administrations are still important. Each movement taken by the Government will be subject of scrutiny by some Socialist leaders, reluctant to submit to pressure from pro-independency parties.
Approval of pending projects. The new Government has to deal with the parliamentary approval of regulations drafted and approved by Rajoy’s team. Some of these projects are very important for the business sphere: Organic Law on Data Protection, the new Mortgage Act or the Law on Climate Change and Energetic Transition.
Economic growth and equality. With respect to the economic agenda, the future of the pension schemes systems is one of the most important issues for the Socialists to address. Furthermore, the Government will have to find equilibrium between future increases in public expenditure and the fulfilment of the EU compromises.
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