The euro zone

A rough deal

It's hardly been the most auspicious start to 2018. In what is surely a sign of things to come, Mariano Rajoy's minority government is once again having trouble securing approval for this year's budget. If this sounds all-too familiar, it's because last year Spain had to wait until June for a spending plan to be approved.

The circumstances responsible for causing 2017's delay have not changed: Rajoy's Popular Party (PP) is still hamstrung in congress and depends on the support of other parties, some of which are openly hostile towards the conservatives. If backing for the 2018 spending plan is not forthcoming by 31 March, says the government, this might be a budget-less year.

The reasons for the current hold-up illustrate the deal-based nature of modern Spanish politics, and how ineffective such a method of government is. Ciudadanos, the centrist newcomer that has now overtaken the PP in the polls, is withholding support for the 2018 budget over corruption. Party leader Albert Rivera has told Rajoy that he can forget Ciudadanos' backing unless PP senator Pilar Barreiro, who is under investigation in a cash-for-contracts case, is removed from office.

He is right to do so, even though the Barreiro case is but a small part of the corruption that taints Spanish politics. Indeed, when the PP and Ciudadanos made a pact in August 2016, the older party pledged - obviously with its fingers collectively crossed under the table - to tackle corruption within its own ranks. This was one of the conditions upon which Ciudadanos agreed to support Rajoy in congress and marked “the beginning of a love affair” between the two parties, as a PP spokesperson gushed when the deal was signed.

Since then, you'll have noticed, numerous PP politicians have been fired over corruption allegations, and the scandals have stopped breaking. Wouldn't it be refreshing if that were true? Instead, the “love affair” between Ciudadanos and the PP has long since exited its honeymoon period and corruption still plagues the PP.

The Basque Nationalist Party (BNV), meanwhile, is refusing to back the proposed 2018 budget because of the PP's handling of Catalonia. BNV president Andoni Ortuzar stated back in December that Rajoy won't have his vote “until Catalonia has legitimate and legitimised institutions” - a call for the central government to hand back control of Catalonia to the Catalans. Right now, that seems as unlikely as the PP deciding to do something about its more questionable senators.

As far as this year's spending plan is concerned, it looks like we're in for another delay of at least six months, a zombie government unable to pass new fiscal policy, and an economy on cruise control. Cristóbal Montoro, Spain's budget minister, might as well start working on 2019's spending plan: maybe that way it has a chance of being passed sometime next year.