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the euro zone

In two minds

This week, Pedro Sánchez confirmed a bumper increase of 22 per cent in Spain's minimum wage from January, from 736 euros per month to 900 euros. It's a proposal made, in part, to please leftist Catalan separatist parties, who say that they won't support the Socialists' 2019 budget - tabled for a parliamentary vote in January - unless Sánchez softens his anti-secession stance.

It's also a move that highlights the PSOE leader's schizophrenic tactics with regard to the Catalonia problem. Concession-driven in some respects, they're Rajoyesque in others: this week also saw Sánchez threatening to send national police into Catalonia if the region's own police force, known as the Mossos d'Esquadra, fail to restrain separatist protestors. Which approach will be more effective?

Leftist Catalan parties will approve, in theory at least, of the minimum wage increase, which would be the heftiest annual hike since 1977. It's set to be approved at a meeting of Sánchez's cabinet next Friday in Barcelona - a choice of destination that's also designed to appease the region's secessionists. Yet the tone of rhetoric this week, from both Madrid and the Catalonian capital, suggests that it will take more than a piece of economic legislation to ease the tension.

In an address to congress on Wednesday, Sánchez was in a less conciliatory mood towards Catalan separatists. He compared their attempts to break from the rest of Spain with Brexit, saying that both campaigns told "lies" to gain support, inventing "grievances [that] force people to choose between two identities". Hardly the words of a man prepared to cut the secessionists some slack.

Sánchez's remarks followed similarly inflammatory statements made by Catalan president Quim Torra on Saturday, after the latter's visit to Slovenia. Praising the country's split from Yugoslavia in 1991, following violent clashes during the "10-Day War", Torra said that "the Slovenians decided to push ahead [with secession] despite all the consequences. Let's do the same as them and be willing do anything to live freely". It was an irresponsible and flawed comparison, one that Spain's foreign minister Josep Borrell said was effectively "calling for an insurrection".

Both Sánchez's and Torra's remarks set the tone of rhetoric that makes one despair at the prospect of compromise between Barcelona and Madrid. As indeed does the Spanish prime minister's warning to the Catalan parliament this week: unless the Mossos take a harder line on separatist protesters - who blocked a Catalan motorway last weekend - Sánchez says he'll send in Spanish national police to deal with them. This is precisely what Rajoy did in October last year, in an attempt to physically dismantle the independence referendum.

Unlike Rajoy, though, Sánchez also maintains that he wants to start a "dialogue" with separatists - something that the proposed wage increase is designed to facilitate. Yet Torra is inspired by Slovenia's bloody independence movement and Sánchez thinks that separatists are "liars".

Some dialogue.