Rajoy and Rubalcaba agree terms of pact to urge Brussels into action

Prime Minister Mariano Rajoy and the leader of the main opposition Socialist Party, Alfredo Pérez Rubalcaba, on Wednesday agreed on the basic principles of a cross-party pact designed to strengthen the Spanish leader’s position ahead of the European Union summit in Brussels at the end of June.

The Popular Party (PP) and Socialists (PSOE) have long been planning such a move to present a united front when continental leaders meet to discuss a package of recommendations on stability, growth and jobs designed for 23 countries. “There are perspectives on the horizon to work together that the PSOE will not reject because Europe is changing and Spain needs to take advantage to ensure that it is included in those changes,” Rubalcaba said last month.

While the Socialist has been a fierce critic of austerity measures imposed by the Rajoy government, Spain is intent on pushing the European Commission (EC) into a policy shift to create stimulus packages for countries suffering the brunt of the euro-zone recession rather than proceeding with its current diktat of massive spending cuts.

Multi-billion-euro budget slashes in healthcare and education, coupled with tax hikes, have proved ineffective in balancing the state’s books, and hugely unpopular. Unemployment in Spain stands at 27.2 percent, with 6.2 million people out of a job and the economy at a virtual standstill. Economists and political leaders have long warned that austerity alone will not solve Europe’s woes and Rajoy and Rubalcaba’s preliminary accord is based on seeking initiatives to boost growth.

It is a two-party pact imposed by the men in black”

Chief among the proposals in the draft text, which will be presented and amended in a congressional meeting on Thursday, is to set in motion a European plan to tackle youth unemployment as quickly as possible. The number of young people without work in Spain stands at 57 percent, leading to an exodus of young professionals who feel they have little real chance of finding work at home.

The other points in the document call for a credit line to opened by the European Central Bank to small and midsized companies and measures for European investment to be funded by the EC. The plan also calls for banking unity within the union and improvements to the European common market.

The government wants to have the text approved as soon as possible and expects UPyD, the Catalan CiU coalition and the Basque Nationalists to back it. The United Left (IU) and the parliamentary mixed group, which includes the Catalan nationalists ERC, the Canaries Coalition, the ICV Catalan leftist greens, the Galician nationalists BNG and the Navarrese People’s Union, has so far refused its support over the way the pact has been negotiated. “It is a two-party pact imposed by the men in black,” observed Jose Luis Centella of IU.