Spain after the elections of April 28 1 REPORT SPAIN AFTER THE ELECTIONS OF APRIL 28 Madrid, 30 April 2019 llorenteycuenca.com Spain after the elections of April 28 INTRODUCTION AND CONTEXT On 1 June 2018 Pedro Sanchez, Secretary-General On December 2, the emergence of Vox (a party of the center-left Spanish Socialist Workers’ Party created in December 2013) as an influential (PSOE), took office as Prime Minister following force in the Parliament of Andalusia changed the a censure motion against the until then Prime electoral panorama in Spain. This party joined Minister Mariano Rajoy of the center-right extreme right parties in Europe such as the Front Popular Party (PP). National in France. Its success in Andalusia, Spain’s most populated region, was due mainly to a debate on national identity (fuelled by the tension in Catalonia) and immigration. In these elections, a high proportion of voters from the “The failure of the left abstained from voting, opening the door to the three parties of the right (PP, Ciudadanos and 2 National Budget bill led Vox) to put an end to over 35 years of socialist to Pedro Sanchez on government. February 15 announcing The possibility of reproducing this pact at a elections for April 28” national level led to a massive mobilization of voters on the left, who see in Vox a party with its roots in Franco’s dictatorial regime. For PSOE, this particular debate was convenient as it distracted from negotiations with the independence parties In the nine months that Sanchez has headed the in Catalonia, a topic that divided voters and government, legislative activity was limited to could lead once again to abstention, as already completing a few bills that were already being occurred on December 2. processed, and, above all, to govern through Royal Decree-Laws, a legislative tool which The failure of the National Budget bill led to under Spanish body of law is reserved for urgent Pedro Sanchez on February 15 announcing matters. elections for April 28, and two weeks later, on March 1, he dissolved Parliament (Congress of Rejection in February of the 2019 National Senators and Representatives). Budget (the most important law that any Spanish government needs to approve on a yearly basis), Following a long pre-campaign period and after meant in effect that the majority that voted for the 15 days legally set aside for the election the censure motion could not offer a meaningful campaign itself, on Sunday April 28 a total of basis for completing the legislature. PSOE and 36,893,976 Spaniards were eligible to vote in an Unidos Podemos had signed a bill that did not election in which uncertainty over the majorities obtain the support of the two Catalan pro- that would have the ability to become Goernment independence parties, PDeCAT and ERC. persisted right up until election day. llorenteycuenca.com Spain after the elections of April 28 ELECTION RESULTS Last April 28, general elections were held in Spain. The results of elections give the following breakdown of seats in the Congress (the chamber with the power to elect the President of the Government). 3 In the Senate, the PSOE has achieved an absolute majority. This second chamber has less legislative power than Congress, but nevertheless it has two key competences in this legislature: approve a ceiling on spending (prior step towards approving the budget and continue on the path of deficit reduction as required by the European Union), and application of article 155 of the Constitution (to suspend an autonomous community government, as occurred in Catalonia in 2017). With these results in Congress (after close to 100% of votes counted), we can offer some conclusions: • Current Prime Minister Pedro Sanchez has the best options to continue in office, although he will not find it easy to achieve sufficient support in the parliamentary confirmation vote because he needs the votes of the independence parties. He has increased his representation in Congress by 40 representative seats from the 84 he achieved in 2016. llorenteycuenca.com Spain after the elections of April 28 POSSIBLE SCENARIOS FOR GOBERNABILITY With apparently irreconcilable positions and likely vetoes among the most centrist positions, doubts arise regarding the governability of the next legislature. The election results indicate blocks with little chance of reaching understandings in the center ground. If we take as read the belieF in the immovability of the speeches, the potential pacts of governability would be, a priori, two: • A repeat of the majority achieved with the motion, with PSOE, UP and the necessary nationalist votes. Whether it will be a coalition government or one run by just the PSOE remains to be seen. 4 • Despite the public refusal of Ciudadanos, a second option could be PSOE and Ciudadanos. • There is a real possibility of new elections this Fall after an unsuccessful negotiation, though unlikely. Should this happen, it seems likely that the outcome would again be a not very clear majority, with a strengthening of • Patido Popular has suffered a significant the major parties in each bloc. loss of votes, losing more than half of its representatives (Falling from 134 to 66). It is important to underline that most of sources consulted take for granted that there • Ciudadanos (center-right liberal) has gained will not be a central government until the support and is less than one point behind the autonomous and municipal governments are Popular Party, with 8 representatives less. decided. The fiction of blocs and vetoes will be maintained until alliances are established from • Unidas Podemos (leftist) loses a significant the regions. However, it is likely the PSOE and part of its representation, although the drop Unidas Podemos will announce the investiture has been less than expected. agreement before the May 26 elections. • Vox (new party on the conservative right) has In the coming weeks, informal talks will begin become the fifth largest parliamentary force, between party leaders to form a majority. The without realizing some predictions that it Congress will be constituted on May 21. This could become the leading party on the right. negotiation is not expected to complicate the task of PSOE and Podemos of gaining control of the Parliament’s Bureau and for a socialist to be the president of the chamber. llorenteycuenca.com De las tribus a las comunidades: Hacia una identidad de marca flexible 5 Regional elections will be held on May 26, CHALLENGES FOR providing a test for whether the trend in these THE NEW GOVERNMENT elections is maintained or if the right manages to maintain control of some governments as In the near term, there are three main matters counterweight to the central government. that the new government has to manage: Of special relevance will be the result in the Barcelona City Council. If there is an agreement • Governability. between left-wing forces, it could open a new formula in the Catalan government in hypothetical • Institutional tension with the new elections in Catalonia: instead of a pact Government of Catalonia. between pro-independence parties, one between ERC, Comuns and PSC that could ease relations • Economic slowdown. with the Spanish Government. These short term challenges will mark the If the alternative of Government 1 (PSOE and management of those unavoidable in the medium Unidos Podemos) is finally established, the term, including the most bureaucratic ones, such legislature will maintain the tension experienced as the incorporation of European directives, as in recent months. The necessary agreements with well as economic challenges related to cleaning nationalist parties will be used by the right-wing up public accounts, and the ecological transition parties as the main topic in their discourse. These program. parties will have to manage how they lead the discourse against the left-wing government with a view to the next elections. llorenteycuenca.com Spain after the elections of April 28 The 13th legislature will be marked by • Industrial policy and SMEs. uncertainty. Challenges will not be lacking. The end of the positive economic cycle, the gradual • Financial system with possible mergers and rise in interest rates in the Eurozone and a less re-privatization of Bankia. favorable international economic scenario will define the environment in which a Spanish • Overhaul regional financial system, highly government that lacks a solid parliamentary relevant now that regional governments majority will have to operate in coalition, with manage social policies which take up the some principal partners (Unidas Podemos) biggest budgetary share that will want to impose their reform agenda, in opposition, especially in economic matters, • European Politics, with a European Union to the orthodoxy of the European Union. The that needs to renew its budget model and outstanding issues, however, are in no way minor make progress in areas such as energy and and room for action is more limited than one fiscal union. might think. The new government will therefore 6 have to demonstrate a good dose of energy, • Incorporate European directives into Spanish reflexes and negotiating skill. law, something that is seriously behind schedule in Spain and could lead to heavy In addition to the three challenges mentioned fines. above for the short term, there are nine of a central nature in the medium-term. We analyze • Spain’s historical legacy to deal with matters the prospects for success of the solutions such as the exhumation of Francisco Franco. proposed by the main parties for the 13th legislature in the following issues: In addition to these issues, there are others that are permanently on the agenda of governments • Labor market, with the reversal of the labor since the transition to democracy, such as reform approved by the government of sustainability of the public health system and Mariano Rajoy as a key aspect improvements in education, and adapting to the demands of the digital society, as well as a reform • Pensions and modernization of the justice system.