the euro zone

Nobody wins

After the failure of Pedro Sánchez's proposed 2019 budget this week, Spain is heading for an early general election. It will be the third such vote in five years, a period that has been marked by political uncertainty and the increasingly toxic issue of Catalonia. But despite its necessity - Sánchez's government's minority status in congress has become untenable - this election is another reminder of how the Catalan independence movement is impacting negatively on the rest of Spain.

Sánchez's draft spending plan was expensive and would have depended on raised income and corporation taxes, but it contained some progressive ideas. Flagship proposals included a 22% hike in the country's minimum wage and an ambitious reform plan called the "Agenda for Change". This comprised a raft of policies designed to increase the Spanish economy's productivity and reduce unemployment and public debt. More controversially, the PSOE leader's blueprint budget also increased the amount of public funds destined for Catalonia throughout this year.

Although that costly olive branch was offered to the north-easterly region, Catalan pro-independence parties still voted against the 2019 budget. They thus deprived the country of a spending plan that made a real attempt to improve the lot of the average Spanish household - something that could not be said of economic policy under former Conservative prime minister Mariano Rajoy. Catalan secessionists' refusal to back the budget hasn't done them any favours, either: they remain as far as ever from realising their dream of a Catalan Republic.

By contrast, Sánchez comes out of all this fairly well. He tried to steer a path between the two extremes of the Catalonia debate - Spanish nationalists (as represented by the Popular Party, Vox and Ciudadanos) on the one hand, and the Catalan pro-independence movement itself on the other. Facing criticism from both sides, he at least attempted to start a dialogue between Barcelona and Madrid, albeit always with "the Constitution in hand", as he said last summer. Sánchez went as far as he possibly could in offering compromise to the secessionists - which was way too far for many in his own party as well as for the Spanish right. But because he stopped short of offering Catalonia independence, or at least a legal referendum on self-determination, his efforts have come to nothing.

The early election this spring comes at a difficult time for Spain's embattled prime minister. Although Sánchez's Socialists are still riding high in opinion polls, their recent loss of Andalucía (a region they have controlled for decades) revealed a groundswell of support for the Spanish right - a surge that's largely fuelled by opposition to Catalan separatists. The latter group also stand to lose out if right wing parties take power after an early election, but it would be a loss entirely of their own making.