The slow exit of Mr Rajoy….

Hola my dear readers! Today I am taking you back to the warm climes of Spain. As you may recall I wrote an article in December about the elections in Spain. Seems it was a closer call than ever as the Spanish Congresso is now, for the first time in modern Spanish history, in deadlock. Or more technically speaking a hung parliament. See also my earlier entry about Europe’s hanging parliaments.

Now, Spain has still not been able to form a government since the December 20th election day. The two main parties, the centre right PP and the centre left PSOE, which had dominated the Parliament for over three decades have now had to make way for two upstarts, the centrist Citizens Party and the radical leftists, Podemos (who performed better than expected).

The governing PP of Prime Minister Mariano Rajoy actually still won the largest number of seats but has found coalition building near impossible. The other left leaning parties, PSOE and Podemos, have been adamant that they want Mr Rajoy to go but have as yet been unable to form any alliance owing largely to the calls by Podemos for a referendum on Catalonia’s independence. Nothing is certain and whilst Parliament has reconvened and successfully managed to elect a new PSOE Speaker, Patxi Lopez, the search for a PM has proved frustratingly elusive. Many had hoped the election of Mr Lopez might signal a possible deal at the national government level but no such luck.

I won’t dwell on the successes of Mr Rajoy, his main achievement being the return of the Spanish economy to positive growth rates. The IMF in 2015 stated that GDP growth was 3.1% that year and over 500,000 new jobs were created. A combination of labour market reforms and low oil prices helped the situation and that is to Mr Rajoy’s credit. However, his government has been beset by corruption allegations and several senior PP officials have been arrested in the so called ‘Baracenas Affair’ which centres on illegal cash donations received by the PP.

The PSOE leader, the dashing Pedro Sanchez, has visited neighbouring Portugal, to seek advice from his Iberian socialist counterpart, Antonio Costa, on how he successfully toppled their previous rightwing government. Although that Lisbon based government’s durability is now looking less strong than it was a few weeks ago. That’s another story though dear reader!

In Madrid, the Parliament reconvened in spectacular fashion, with a baby being breastfed and a Deputy turning up with dreadlocks and baggy jeans, to the much more significant swearing in of Spain’s first black Deputy. Credit where credit is due, they all came from the radical Podemos party which has aimed to shake up politics on the peninsula.

However, whilst politics may have needed shaking up the government (in the interim Mr Rajoy’s government has had to remain in office) has been unable to keep the  momentum in key economic reforms and whilst Spain has the luxury of the European Central Bank’s bond buying programme keeping the bond market relatively stable, Spain cannot afford a long period of drift.

As the English language, The Spain Report, has stated the two main party leaders’ Senor Rajoy and Senor Sanchez have both met the King, King Felipe VI, and declined the offer to form a government. Not only have they embarrassed and left the King in a quandary they are evidently playing politics with the country and biding their time to step in as a ‘statesman’ when the other has exhausted their options and the country and EU are desperate enough for either to form the government. Even the anti-monarchy Podemos and their leader,  Pablo Iglesisas, out of the blue offered to form a left wing government with PSOE only to have insults hurled its way without even a discussion. Meanwhile, the King, who has barely been in office for two years, has to try and resolve the matter without damaging the institution of the monarchy. Not an easy task, especially given the nebulous role the Spanish Constitution affords a monarch in such a scenario.

One of the new parties, the centrist Citizens or Ciudadanos Party, has offered to mediate between the two main parties to try and get a government up and running, the Spanish daily newspaper, El Pais reports. What has disadvantaged Mr Rajoy again is the ‘Baracenas Affair’ with more PP officials being investigated and police raids on the Party’s offices in Valencia. The charismatic leader of Citizens, Albert Rivera, has warned that conditions will be tough on corruption if the PP wants another shot at power. The Transparency International annual Corruption Perceptions Index for 2015 has also rated Spain as the worst performer in Europe and the country is now down to 36th in the world. This will only compound Mr Rajoy’s woes and as time passes, the shrewd Galician operator that is Mariano Rajoy, who likes to play the long game must be starting to realise that the tables are ever so slightly starting to turn (to his opponents’ advantage) as he begins his long goodbye to the Prime Minister’s smart La Moncloa official residence.


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