By: Sebastian Mariz, CEO of Influence Spain
A partial repeal of the 2012 labour reform of the former conservative Government led by Mariano Rajoy, was one of the key elements of the coalition Government agreement signed in January 2020. Parliamentary ratification of the Royal Decree Law implementing a new labour market framework in Spain, was adopted on the 3rd of February. But with only a slim majority of one vote, thanks to an error in voting by one of the conservative members of Parliament. None of the Prime Minister’s parliamentary coalition partners voted in favor.
The outcome of the close call on the new Employment Law, has weakened the authority of the Minister of the Presidency and the PM’s primary negotiator, Felix Bolaños, with other parliamentary groups. He had assumed responsibility for negotiating the ratification of the draft Law in Parliament and only succeeded thanks to the voting mistake by the conservatives.
Political roller coaster in February
Failure to have the project ratified in Parliament would have spelt trouble for the coalition and irreversibly damaged the Employment Minister’s reputation, as well as the PM’s authority and credibility. The fact that none of his parliamentary coalition partners, with the exception of Podemos, voted in favor of the new law, foreshadows a difficult and unstable second half of the legislature. Regionalist and radical parties of Catalonia and the Basque Country will demand an even greater transfer of power from Madrid, in exchange for their support in adopting and ratifying new legislative Initiatives in the pipeline.
The PM has even had to convene the press to dispel the widespread belief amongst opinion leaders that his coalition is terminally injured following the labor law vote in Parliament, and has insisted that his is the first Government since 2014 that has been able to successfully get two national public administration budgets approved. Barring any sudden surprises from his junior partner, the PM knows that in the worst of cases he can maintain his Government by rolling over the national budget until the end of the legislature in December 2023, even if that means dropping the ambitious legislative agenda, he presented at the beginning of the year.
Implications of the Castilla and León’s electoral results
The growing weakness of the Government coalition and voter discontent over the concessions the PM has had to make to regionalist and far-left parties, was also reflected in the results of the regional elections held in the region of Castilla-y-León (CyL) on Sunday the 13th of February. Early elections were convened by the regional conservative Premier, in an attempt to replicate the success obtained by the conservatives in the regional elections in Madrid held in May of 2021.
The results were, however, a far cry from those achieved in Madrid by the conservative Isabel Ayuso, and have resulted in more power to the far-right Vox party, who now have the key to forming a new coalition government in the region with the conservatives. This is a bad result for the conservatives and confirms that they are losing votes to the far right. The result is less dramatic for the PM, but both the socialists and the communists lost votes in the region as well.
Rumours of regional early elections die down
The results in CyL have already had a knock on effect in other regions, where the conservatives had also hoped to replicate the results obtained in Madrid in May of last year. Early elections this spring in the region of Andalucía have been called off, and the rumors of early elections in the region of Valencia are no longer heard. This, puts an end to the opposition’s strategy of subjecting the PM to a continuous stream of referendums over his policy and his government, in an attempt at breaking the coalition and provoking elections.
The new situation will give the PM time to focus on his deteriorating popularity and on adopting policies which bolsters voter support for the socialist party and to position both his party and leadership within the centre-left, away from the more radical positions of his coalition partners. This would leave the conservatives stranded to the right and fighting for votes from the far-right Vox party. Some of the polls published shortly after the regional elections in CyL show the socialist party rebounding from a low in January, in which voter support dropped to 24%, which was practically equal to the conservative party.
Open war in the People’s Party
The infighting between the conservative party leader, Pablo Casado, and the Premier of Madrid, Isabel Ayuso, over control of the party in Madrid, and following the poor results of the elections in CyL, has also had a marked impact on the conservative party’s popularity amongst voters. It has now sunk to a position in which it is almost tied with the far-right Vox party, and is trailing more than 5 percentage points behind the socialists. As a result, Pablo Casado has had to resign as party leader with the election of a new party leader set for April.
In the short term, the crisis in the conservative party will mean more voter support for the far-right. Vox’s party leader, Santiago Abascal believes that he and his party could even surpass the conservatives in the next general election, and become Spain’s second most voted party after the socialists, with more than 90 seats in the national Parliament.
The results in the regional elections of CyL also show, that the splintering of Spain’s political representation into an increasing larger rainbow of smaller regionalist and radical parties, is far from over and only increasing. If similar results are confirmed in the general elections to the national Parliament at the end of 2023, it will mean an even more fragmented parliament, in which neither the socialists nor the conservatives are able to create majority governments and are forced to form coalitions to the right or the left.
New political platform for the far-left
As a final spin to this generalized political turmoil, the PM must also face growing tensions within Podemos, his junior partner, which like the conservatives, is immersed in a power struggle between the former party leader, Pablo Iglesias and the Minister of Employment, Yolanda Diaz.
The PM is hoping that his Employment Minister will win this battle and become the leader of the far-left with her new political platform, in time for the general elections, be they at the end of this year or next. As mentioned earlier, however, Yolanda’s reputation and authority have been severely damaged following the near miss in getting the Employment Law approved. Yolanda will now be under intense pressure to prove herself to militants of the far-left and to the labour unions. She will probably publicly support the need for a new fiscal reform in Spain, with higher income and corporate taxes and the adoption of new taxes on fuels and environmental pollution.
Fiscal advisers to the PM have recommended postponing any fiscal changes until 2024, when the worst of the pandemic and the economic recession it has provoked, have been left behind.