the euro zone
It’s not just because the English and Spanish press has been unable to talk of much except Donald Trump for the last week and a half that you’ve heard very little about Mariano Rajoy’s new government. Three weeks have elapsed since the veteran Galician secured a second term in office, so you might well expect news of what he’s been up to. Instead, a deafening silence emanates from Madrid.
With a ten-month backlog of important tasks awaiting his attention and the EU breathing down his neck, Rajoy should be going about things with some urgency (even though it’s hard to imagine him doing anything with urgency). As it is, he’s yet to even convene the first big meeting with investiture-partners Ciudadanos about spending plans for next year, which are already horrendously overdue for submission to the EU Commission. This is a worrying - but inevitable - sign that, although it finally has a new administration, Spain has not entirely escaped the political deadlock it’s been enduring since last December.
These early signs of legislative paralysis are unsurprising because Rajoy’s administration is short of a parliamentary majority and faces staunch opposition from the Socialists and Unidos Podemos, both of whom have heaped vitriolic criticism on the Popular Party over the last ten months. The mistake that these two parties are now making, though, is defining themselves by their opposition to the PP: in saying that they will block virtually every new piece of legislation Rajoy tries to pass, they will only usher in yet another period of political deadlock for Spain. Especially where next year’s budget is concerned, the PSOE and Unidos Podemos must be pragmatic and water down their directionless, indiscriminate opposition to the PP.
Rajoy has never had it so hard. Throughout his first term he enjoyed an absolute parliamentary majority and was able to push through legislation - no matter how controversial - with ease. He experienced no problem meeting the annual budget deadline of mid-October, even though his yearly spending plans proved some of his most unpopular policies. Parliamentary dominance meant Rajoy effectively had carte blanche.
But as the current budgetary difficulties show, those days are emphatically over. In the yet-to-be scheduled meeting with Ciudadanos, a party critical of many of the PP’s economic policies, Rajoy will have to thrash out a draft budget for next year. This will be no mean feat in itself, because, in order to keep the EU happy, Spain has to raise an extra five billion euros in 2017 to contain its GDP deficit. The tax hikes or spending cuts necessary to achieve this are not going to be well received by Albert Rivera’s party, whose rise to prominence was partly fuelled by anger with PP-imposed austerity.
Even if he can win over the Ciudadanos MPs, Rajoy’s 2017 budget ordeal doesn’t end there. He then has to present the draft spending plan to a parliamentary vote, when his leftist opponents are likely to jump on it like jackals on a carcass. Given the leisurely pace at which events are currently unfolding, some are saying this vote could occur as late as January: usually, it happens in September. If this is a sign of things to come, Spain can’t yet wave goodbye to a period of political stasis and uncertainty.