Looking beyond the investiture in Spain

Just Sanchez

J. P. Marín-Arrese | The only thing that seems to matter is the investiture. An understandable priority when opening the key to power and its corollary of favours, perks and positions. It is no coincidence that in politics one is there to get into the official car, a vocation that is consubstantial to this profession, since the purpose of all training lies in holding command of the office. Everything suggests, barring a major surprise, that Pedro Sánchez will be elected, materialising the collective triumph celebrated by the motley conglomerate that supported him in the last elections, albeit by the skin of his teeth and leaving the majority with a lot of hairs in the catflap. It does not seem easy to satisfy the demands of both sides. Even less so in the face of the muted struggle between those vying for supremacy on shared ground, but risking losing the advantage gained in a repeat of the elections will serve as a pragmatic glue. Bildu’s representative has made it crystal clear: it is now time to secure this investiture and then the road will be travelled. Most of the coalition partners have already lined up, not without some reluctance. For the PNV, a commitment of support after the Basque elections should be enough, even if it does not quite trust a crutch that cannot be made public. Podemos will continue its particular campaign of protest and denunciation of the grievances inflicted by Yolanda Díaz, but it is not in a position to rock the boat too much.

Only the uncertainty will be prolonged by the determination of Junts and ERC to compete in intransigence when it comes to stretching the rope. But it is doubtful that they are willing to break it. They will be content with a law of full stop, according to their interpretation, and full stop according to Sánchez. In short, a law with a full stop but lacking any real suspense. Even if the legal pirouette overcomes the obstacle of its more than dubious constitutionality, the state, in its broadest sense, can neither accept self-determination nor, even less, tolerate a new secessionist attempt. In the end, the solution of deferred negotiation of the most sensitive agenda is likely to be found. Meanwhile, the pro-independence movement will try to disengage Catalonia from the rest of Spain by eliminating, step by step, any vestige of national sovereignty due to the central power’s failure to turn up. Their aim is to discourage citizens who oppose their postulates from continuing to resist, putting up a fight. To achieve in the offices what it has failed to achieve at the ballot box.

Sánchez has, therefore, the investiture within his grasp, as long as he does not raise the spectre of a repeat election.The day after seems more difficult, given the serious difficulties in governing that are predicted. Not only will he be subjected to constant blackmail for concessions beyond what is permissible. The very configuration of the eclectic coalition that supports him, apart from raising the bar of demands, will often impose conditions that are as incongruent as they are incompatible with each other. However, governing in such a madhouse is not impossible. Nor is it easy in the face of each other’s pretensions, especially when it comes to passing legislation in the Cortes. But it would be enough to reduce the ambition of the legislative agenda, contenting oneself with amending the errors and inadequacies of the laws adopted in recent times, as well as completing the shift to the left in the last redoubt to be taken from the judiciary. The very need to dance on so many tracks simultaneously will help to slow down and paralyse initiatives.

There remains, however, the test of the annual budgets. If the peremptory requirement to drastically reduce the deficit in an economic context that is not at all conducive to largesse will be tantamount to squaring the circle, undertaking this task in such company will turn the exercise into a high-risk sport. In any case, there is always the useful resource of the extension. If Minister Montoro’s accounts were kept for a long time as if they were carved in stone, there is nothing to prevent repeating the experience by playing with the flexibility offered by the budgetary rules: from extensions, transfers, supplements and extraordinary credits to increase allocations to the sterilisation of unimplemented items to reduce expenditure. Ultimately, cutting up the accounts would make it easier to approve what matters. Who among the coalition members could oppose increasing pensions? The only thing to avoid is giving in to the temptation or pressure to implement a new regional funding model. Experience shows that these exercises result in a bill so high that they impoverish the state’s accounts. At the most, it would be possible to plug holes in some indispensable headings such as health. This legislature can therefore be completed without excessive stress, as not even the parties that claim to have been deceived or disappointed by the government could support a motion of censure without incurring a high cost. Only Pedro Sánchez can activate the eject button by calling early elections. Something he will probably be inclined to do if he sees a clear window of opportunity.

Is it possible to govern in this way? In principle, there is nothing to prevent it, even if it entails undoubtedly undesirable effects. First and foremost, the lack of confidence generated by an executive hostage to formations as radical as they are unpredictable. The ideas of the past legislature have exacerbated the problems that were intended to be tackled. For example, in rents, driven upwards by a clumsy law that contracts supply and invites landlords to make new contracts more expensive than is reasonable in order to prevent future restrictions. Not to mention the insecurity generated by the hostile attitude shown towards big business, for the sin of generating profits. That profitability is measured in terms of capital at risk does not seem to matter in this campaign of harassment encouraged by the most blatant demagogy. If confidence and predictability are the main added value of any government, indispensable to boost economic activity, this one is far from offering such assurances. Its penchant for stale interventionism could result in a high collective bill if the winds of stagnation blowing in Europe affect us fully. Even more so, given the excessive public debt we are carrying. Our vulnerability to any hint of a storm requires a reinforced dose of security for investors, as well as putting our public accounts in order without delay. Fundamental elements that can hardly be provided by a coalition, some of whose members, far from accepting them, despise them. The mere fact of speculating on the segregation of a significant part of the Spanish economy, even if the break-up is not consummated, would be enough to generate a far-reaching financial crisis. That is what is at stake beyond the investiture.

About the Author

JP Marin Arrese
Juan Pedro Marín Arrese is a Madrid-based economic analyst and observer. He regularly publishes articles in the Spanish leading financial newspaper 'Expansión'.