Thursday

26th Apr 2018

Anti-corruption pact holds key to Spain deadlock

  • Madrid metro station. Companies holding back on investments that could create jobs due to political uncertainty (Photo: Calvin Smith)

Spain’s prime minister Mariano Rajoy could secure a second mandate, ending months of political deadlock, if his party agrees, on Wednesday (17 August), to anti-corruption conditions set by the liberal newcomers in parliament.

Ciudadanos (meaning “citizens”), the fourth-largest force in parliament, said last week it would negotiate on making Rajoy prime minister if his People’s Party (PP) - which lost its absolute majority largely because of corruption allegations – agrees to six measures to clean up Spanish politics.

Thank you for reading EUobserver!

Subscribe now for a 30 day free trial.

  1. €150 per year
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

  • Rajoy emerging as compromise candidate (Photo: Partido Popular de Cantabria)

The proposals include creating a commission to investigate allegations that two former treasurers ran a slush-fund, and scrapping parliamentary privileges that prevent the ordinary criminal justice authorities from launching corruption investigations against MPs.

The PP’s executive committee will decide on Wednesday whether to agree the conditions. It has 90 members, including Rita Barbera, a senator accused of money laundering in Valencia.

The PP must also let the parliamentary speaker, who would be a PP member, set a date for the investiture vote.

Rajoy had earlier accepted the king’s mandate to form a government, but he has yet to say when or if he will seek the confidence of parliament.

The offer by Ciudadanos’ leader, Albert Rivera, whose party has 32 MPs in the 350-seat chamber, could help end the deadlock that arose after an inconclusive general election last December.

It would give Rajoy 169 votes in an investiture vote - seven shy of a majority - and make it more palatable for other parties to agree to facilitate a PP government.

“Rivera’s demands seem very acceptable and, in general right for the country’s necessary democratic renewal,” the right-leaning El Mundo newspaper said in an editorial. “Everything suggests the PP will accept them.”

A PP-Ciudadanos deal would be welcomed by many investors since it would reduce the uncertainty of yet another election in the eurozone’s fourth-largest economy, and would increase the likelihood of a business-friendly PP budget and reforms.

Until now, the entrenched positions of the four largest parties made it look as if the PP could at best build a minority, short-term government.

Ciudadanos had previously offered to abstain at a second investiture vote, but now the party leader, Rivera, is not ruling out entering a PP coalition if conditions are met.

The most urgent task for the next government is to draw up a spending limit and budget to present to the European Commission by 15 October.

Slowing growth predicted

So far, the markets have been relatively sanguine about the political impasse. The economy is growing faster than the eurozone average, boosted by consumer demand, tourism and low interest rates.

The PP government approved the 2016 budget last year when it had a majority.

However, economists have sharpened their warnings in recent weeks.

“Spain might remain without a functioning government for longer than expected,” warned risk management service Moody’s Analytics in a report released earlier this month.

“As confidence sours, investment growth will decelerate to 3.9 percent in 2016 and further to 2.5 percent in 2017.”

Companies are delaying the sort of investment decisions that could help cut Spain's unemployment, which is currently at 20 percent.

They want to see what measures the next government will implement. Above all, it needs to make cuts worth 0.5 percent of GDP in 2017 and 2018 to bring its deficit down to a commission target of 2.2 percent, said a research note by Spanish bank BBVA.

“The increase in the uncertainty of the economic measures that will be adopted over the next few years could take seven percentage points off the growth of private consumption in 2017,” said the note.

The PP and Ciudadanos, a centrist party, may be able to find common ground on economic policy.

However, if the two parties agree a pact, they will still need the Socialist Party to lend a few votes to reach a majority, since support from regional parties looks unlikely.

Former Socialist prime minister Felipe Gonzalez has urged the Socialists to stand aside in order to let Rajoy govern. He said the Ciudadanos’ offer was “the first act of political responsibility since the elections”.

The left-wing newspaper El Pais has also called for the Socialists to abstain from voting in a Rajoy investiture in order to allow him to form a government, writing in an editorial that the focus should be on making Spain governable again.

In a sign of the public mood, even one of the Socialists’ media friends, actor Antonio Banderas, urged the party to abstain for the sake of the national interest.

"I don't think that by abstaining at a certain moment, that means you support the other [party’s] policies”, he said.

Spain braces for Christmas election

Acting PM Rajoy's failure to form a government last week makes another general election ever more likely. But a Basque regional party might offer support that would push him closer to a national majority.

Macron and Merkel pledge euro reform

France and Germany have pledged to forge a joint position on euro reform by June, despite German reluctance on deeper monetary union.

Macron and Merkel pledge euro reform

France and Germany have pledged to forge a joint position on euro reform by June, despite German reluctance on deeper monetary union.

Stakeholders' Highlights

  1. European Jewish CongressCalls on Brussels University to Revoke Decision to Honour Ken Loach
  2. Sustainable Energy Week 2018"Lead the Clean Energy Transition"- Register and Join Us in Brussels from 5 to 7 May
  3. EU Green Week 2018Green Cities for a Greener Future. Join the Debate in Brussels from 22 to 24 May
  4. Nordic Council of Ministers12 Recommendations for Nordic Leadership on Climate and Environment
  5. Macedonian Human Rights MovementOxford Professor Calls for an End to the Anti-Macedonian Name Negotiations
  6. ACCAPeople Who Speak-Up Should Feel Safe to Do So
  7. Mission of China to the EUProgress on China-EU Cooperation
  8. Nordic Council of MinistersWorld's Energy Ministers to Meet in Oresund in May to Discuss Green Energy
  9. ILGA EuropeParabéns! Portugal Votes to Respect the Rights of Trans and Intersex People
  10. Mission of China to the EUJobs, Energy, Steel: Government Work Report Sets China's Targets
  11. Martens CentreJoin Us at NET@WORK2018 Featuring Debates on Migration, Foreign Policy, Populism & Disinformation
  12. European Jewish CongressKantor Center Annual Report on Antisemitism Worldwide - The Year the Mask Came Off

Latest News

  1. EU tells platforms to sort fake news by October or face new law
  2. Civil society chief: social media can't replace engagement
  3. The reality behind the €7 'Brexit bombshell visa'
  4. Commission wants bigger post-Brexit budget
  5. Whistleblowers could be enforcers of rule of law in Europe
  6. EU shelves Macron idea for 'European Darpa'
  7. Don't play EU 'games' with military HQs
  8. EU had a plan for Jordan - now it's time to make it work

Stakeholders' Highlights

  1. UNICEFCalls for the Protection of Children in the Gaza Strip
  2. Mission of China to the EUForeign Minister Wang Yi Highlights Importance of China-EU Relations
  3. Nordic Council of MinistersImmigration and Integration in the Nordic Region - Getting the Facts Straight
  4. Macedonian Human Rights MovementMacedonians in Bulgaria Demand to End the Anti-Macedonian Name Negotiations
  5. Counter BalanceThe EIB Needs to Lead by Example on Tax Justice
  6. ILGA EuropeTrans People in Sweden to be Paid Compensation for Forced Sterilisation
  7. International Partnership for Human RightsThe Danger of Standing Up for Justice and Rights in Central Asia
  8. Mission of China to the EUChina and EU Must Work Together to Promote Global Steel Sector
  9. Swedish EnterprisesEU Tax Proposal on Digital Services Causes Concern for Small Exporting Economies
  10. European Jewish CongressCondemns the Horrific Murder of Holocaust Survivor Mireille Knoll in Paris
  11. Mission of China to the EUAn Open China Will Foster a World-Class Business Environment
  12. ECR GroupAn Opportunity to Help Shape a Better Future for Europe