HR Policy Global

BEERG Newsletter 38 - Analysis: Incoming...

Published on: November 15, 2023

We offer this personal analysis of what is happening on the Spanish political scene from Éamann Mac Donnchada. An Irish born academic who has lived and worked in Barcelona since 2015, Éamann writes frequently about Argentine and Spanish politics. [This is our edited version of the original]  

Following the announcement of a long-awaited deal with the Catalan nationalist Junts party, it now looks near certain that almost four months after the general election on July 23 Spain’s Congress will elect the PSOE’s Pedro Sánchez to a second term as Prime Minister today (Thurs Nov 16). 

The incoming government coalition consists of two parties, the PSOE itself and Sumar.  Despite the former’s full name in English being the Spanish Socialist Worker’s Party it’s a moderate social democratic party. Sumar is itself a coalition of small leftwing parties the most important of which is Izquierda Unida (United Left) and the driving force in Izquierda Unida is the Spanish Communist Party.

This all makes it sound like the collectivization of the means of production and handing all power to the Soviets will be high on the incoming administration’s agenda, but the scary names are relics of the past. Today the Spanish Communist Party is also social democratic in orientation when it comes to domestic policy and is by far the most pragmatic of Spain’s leftwing parties. Podemos, the firebrand new left party that was the PSOE’s principal partner in the outgoing government saw its representation fall to five deputies at the general election and now forms part of Sumar. It’s unlikely to have any serious influence in the coming administration.

The two parties' joint program for government is summarized here (in Spanish) and the headline measures are a reduction in the working week from 40 hours to 38.5 in 2024 and to 37.5 in 2025, and an increase in the minimum wage to 60% of the average one, a percentage it’s not far from now (Spanish). There are also commitments to make the tax system, in general, more progressive, to set a minimum tax rate of 15% for corporations, to increase the amount of public housing, increase regulation of short-term apartment rentals for tourists and end domestic passenger flights for destinations that can be reached in two and a half hours or less by train.

On the social side, there are plans for extended maternity leave, increased spending on health care, a legal limit to waiting lists for treatments, and greater availability of childcare and kindergarten education.  How many of these measures will get passed into law remains to be seen. While Sánchez will be elected Prime Minister with 179 votes in a Congress of 350 members the PSOE and Sumar between them have only 152 seats. The passage of every other law will have to be painstakingly negotiated with the smaller parties willing to vote to make Sánchez Prime Minister but that do not form part of the coalition. 

These parties are all regionalists or nationalists, and their principal concern isn’t the traditional left-right divide in politics but rather what benefits any given measure might bring to their region and whether they’ll receive more autonomy to govern there.  In some cases, their wishes will clash with those of the governing parties. There’s a clear majority of deputies who wish to make Sánchez Prime Minister again but there is none for any radical change in economic policy. 

The previous PSOE-led coalition was faced with a similar challenge and managed it surprisingly well; it got three budgets passed and a host of other laws. The incoming administration will face even greater difficulties as the opposition People’s Party now controls the Senate. It looks determined to frustrate the new government in every way it can. It can’t stop ordinary legislation from being passed but it can send it back to the Chamber of Deputies where it will have to be voted on again, risking a split in the carefully constructed majority that passed it in the first place,  and it has the final word on the limits of government spending so it can block (in Spanish)  the passage of the national budget. 

The government won’t be completely helpless in this regard though, it can load its fiscal plans with benefits for the regions the senators represent and so make it painful for them to reject. 

Given these difficulties in passing legislation the success or failure of the new government will depend heavily on the skill of its ministers. The new Cabinet won’t be announced till after Sánchez has been elected but it’s a fair bet that one of the top economic portfolios will go to Yolanda Díaz, the leader of Sumar, a Communist Party member, and a star of the previous coalition as Labour Minister. She secured a major reform of employment law and oversaw significant improvements in other areas of workers' rights. She is viewed as a hard-working and reliable negotiating partner, who drives a hard bargain. 

It’s difficult to predict who else might form part of Sánchez’s cabinet but what’s not hard to predict is that the incoming administration will govern congruent with the broad outlines set down by the previous one: generally moderate social democratic reforms and a strong emphasis on coordination with the European Union. Indeed, it’s been said that Sánchez’s two core beliefs are that he’s the best person to govern Spain and that Spain should be at the heart of greater European integration. 

These are policies that have brought steady growth and rising employment. However, serious structural problems such as high youth unemployment remain, and the government’s precarious legislative majority make it difficult to approve far-reaching measures to mitigate the serious negative effects climate change is having on the country.

A final point. Some figures in the opposition People’s Party and the far-right Vox  (in Spanish) have called for a civil rebellion (in Spanish) against the new government because of the controversial amnesty that it plans to give to some Catalan separatists. The move is causing concerns about the rule of law as well as potential implications for the country's judicial independence, constitutional integrity, and accountability. 

Download BEERG Newsletter Issue #38 2023 as a PDF

Continue reading this content with the HR Policy Global Membership package