Rajoy to focus on economy in State of the Nation debate

Prime Minister Mariano Rajoy stands accused by some in his party of failing to practice politics. Here is a veteran politician, they say, a man with more than three decades under his belt at the top of his political party, and who when he finally gets into power, turns into a technocrat.

Those close to the Popular Party (PP) leader say that he believes his chances of re-election next year will stand or fall on the state of the Spanish economy. Which is why, during this week's State of the Nation debate in Congress, which begins on Tuesday, Rajoy will try to keep the focus on improvements to the economy, and avoid the opposition's attacks on his party's policies on issues such as abortion, not to mention corruption allegations involving the former PP treasurer Luis Bárcenas.

"This legislature has been about the economy from the get-go, a roller-coaster ride, with the threat of a bailout, huge tax hikes, labor market reform and the borrowing rates crisis. But it is being dominated by Catalonia, abortion, the end of ETA, and now what is going on in Ceuta [after 15 immigrants died while trying to evade the Civil Guard]. Rajoy only wants to talk about the economy, because that is where he feels most comfortable, and where he believes he can talk about results, although he will not be able to avoid the issues completely," says a source close to the prime minister.

Rajoy's year has gotten off to a much worse start than he hoped for, largely due to the infighting within the party over abortion rights, and other questions. He would much prefer to stay focused on this week's congressional debate, which is a kind of showcase both for him and the opposition, and which comes during the run-up to the European elections in May, and that may offer smaller parties an opportunity, given the electorate's disappointment with the two main groups.

This legislature has been about the economy from the get-go, a roller-coaster ride"

Much is at stake for the Socialist Party as well. Winning the European elections, as some polls suggest that it can, would give it a significant confidence boost, and perhaps prompt party leader Alfredo Pérez Rubalcaba to stay on until next year's general elections. Losing the elections could spark a crisis in the party, and undermine the long-term hopes for leadership of his number two, Elena Valenciano, who heads the Socialist Party's list of European candidates.

In what might be his last State of the Nation debate, then, Rubalcaba will also focus on the economy, but highlighting the impact of the government's health and education cuts, and the rise in poverty.

Rajoy will likely blame the Socialist Party for the mess that he inherited when he took office in January 2012, and Rubalcaba will doubtless remind him that more than a million people have joined the ranks of the unemployed since then. To which Rajoy will point out that unemployment rose by 3.5 million under the Socialists.

The prime minister will want to talk about the data suggesting that the Spanish economy is on the road to recovery, and will release new employment figures to back this up. The conservative will likely promise to reduce taxes in the coming months, but will not be able to provide any details because Brussels has yet to give its approval; the European Commission is concerned that Rajoy will lower taxes before next year's elections in a bid to sweeten the electorate.

Rubalcaba will be keen to discuss key issues such as the PP's plans to end the right to abortion on demand. "The Socialists have turned this into a major issue, particularly by putting Valenciano atop the list of candidates in the European elections," admits one PP member of Congress.

Rajoy's stonewalling abilities are formidable, however. Last year, Rubalcaba made corruption the main subject of his party's contribution to the debate. Just weeks before, EL PAÍS had broken a story about a vast slush fund in the PP that former treasurer Bárcenas had overseen for more than two decades. Rajoy refused to even mention Bárcenas by name, instead making promises about anticorruption measures that, only now, an entire year later, are about to be brought before Congress.

Rubalcaba seems less interested in corruption this year, and instead will focus on what he sees as the three-fold crisis: social, political, and territorial. On the question of Catalan independence demands, Rubalcaba will call on Rajoy to resolve the issue, telling the prime minister that the only solution is constitutional reform.