Budget Deal Puts Spain’s Centrists on the Spot

Any deal with Mariano Rajoy would be unpopular in Catalonia, but voting against him could be unpopular nationwide.

Jordi Cañas and Albert Rivera of the Spanish Ciudadanos party talk in Madrid, August 6, 2013
Jordi Cañas and Albert Rivera of the Spanish Ciudadanos party talk in Madrid, August 6, 2013 (Ciudadanos/Jordi Esteban)

Spain’s liberal Ciudadanos have no good options when it comes to this year’s budget.

If they vote for Prime Minister Mariano Rajoy’s spending plan, it could cost them support in their home region of Catalonia, where the conservative leader is deeply unpopular.

But if they vote against it, it could make it harder for them to grow nationally.

Without the Ciudadanos‘ support, Rajoy would fall short of a majority and could be forced to call snap elections for a second time.

Center-right voters, desperate for stability, could then leave the Ciudadanos in droves.

They lost 1 percent support and eight seats to Rajoy between the 2015 and 2016 elections.

Central

The Ciudadanos are economically liberal, socially progressive and pro-EU, placing them in the center of Spanish politics. Rajoy’s People’s Party is to their right on social issues; the Socialists and Podemos are to their left on economic policy.

But there is another division that runs through Spanish politics: the question of Spanish nationalism. Specifically, how to manage relations between the dominant heart of Spain, Castile, and independent-minded regions like Catalonia.

The People’s Party is proudly unionist. It rejects Catalan self-determination and, as a result, is the smallest party in Barcelona.

The Ciudadanos, who want to remain part of Spain, are the second largest party in the regional legislature, after the separatists.

Palatable

Catalan nationalism is broader than separatism, however. Plenty of Ciudadanos voters don’t care for Rajoy either. He has for years refused to even hear the region’s demands, let alone meet them.

A €4.2 billion investment in Catalan infrastructure, at a time when other regions face cutbacks, is unlikely to change minds.

Nor will the €4.1-billion rise in social spending the Ciudadanos have negotiated.

The party has made a show of conditioning its support on these measures and emphasizing that it would still like to see bolder reforms and more deregulation. But so long as Rajoy remains intransigent on the sovereignty issue, there is little the Ciudadanos can do to make a deal with his party more palatable to their base. They’re damned if they do and damned if they don’t.

EU target

The concessions to the Ciudadanos do mean Spain will barely meet its EU deficit target this year (assuming the budget is passed), even though 2.5 percent growth has buoyed tax collection.

Among other things, the budget proposes to make 250,000 temp jobs in education and health care permanent and give all public-sector employees a 1 percent pay rise.