Spain’s prime minister plays down crisis with coalition partner over upcoming budget

A minor crisis between Spain’s governing coalition partners over the 2020 budget plan appears to be over, at least according to Prime Minister Pedro Sánchez, the leader of the Socialist Party (PSOE).

On Tuesday, Sánchez said during a radio interview on the Cadena SER network that he has met with Deputy Prime Minister Pablo Iglesias, the leader of the leftist Unidas Podemos group, to iron out the tension between both political parties.

The junior partner in Spain’s minority government had threatened on Friday to vote against any budget agreement negotiated between Sánchez and the center-right Ciudadanos party, which holds 10 seats in the lower house of parliament, the Congress of Deputies.

The draft budget will be a government agreement, but later we will have to talk to other parties. We will not veto anyone

Prime Minister Sánchez

Instead, Iglesias wants Sánchez to reach a deal with his own partners first; he is also demanding for Unidas Podemos representatives to be present at any future talks with Ciudadanos. On Tuesday, Sánchez said that “there has been no Unidas Podemos veto against Ciudadanos.”

“We are going to make a budget that incorporates the governing agreement with Unidas Podemos,” said the prime minister. “The draft budget will be a government agreement, but later we will have to talk to other parties. We will not veto anyone.”

Spain has been functioning since 2018 under the budget passed by the previous administration of Mariano Rajoy of the Popular Party (PP). Sánchez has been struggling to secure parliamentary support for a new budget plan ever since he first came to power on the back of a successful vote of no-confidence against Rajoy held in mid-2018.

Failure to secure support for his first budget plan led to early elections in April 2019, which proved to be inconclusive. These were followed by a repeat vote in November, which also failed to deliver a clear winner. Sánchez now heads a minority government that is forced to reach case-by-case deals in a fractured parliament in order to get legislation passed. On Monday, the PM assured a gathering of business leaders that the governing coalition’s stability is assured for the remainder of the political term.

I am quite satisfied with the loyalty and the functioning of this coalition government.

PM Sánchez

The PSOE and Unidas Podemos are expected to restart bilateral talks on the budget on Tuesday. The issue has been an ongoing source of friction because Unidas Podemos wants to repeal the PP’s labor reform of 2012, which sought to introduce flexibility in the job market through cheaper layoffs, while the PSOE is only willing to tweak its most controversial aspects.

“I am quite satisfied with the loyalty and the functioning of this coalition government. Mutual understanding is optimal in these times of pandemic. Stability is guaranteed,” insisted Sánchez on Tuesday.

But the Socialist leader underscored the urgency of approving a new budget. “We are still laboring under a 2018 budget made by a conservative government at a time when there was no pandemic. Those accounts do not include the tools to deal with social emergencies or to spend the funds from Europe,” said Sánchez, alluding to the recent coronavirus recovery fund agreed to in Brussels, which will allocate €140 billion to Spain. “That old budget cannot absorb those enormous economic resources from the European funds. That’s why a new one must be urgently approved.”

Sánchez also appealed to the main opposition PP for support. “The PP says it cannot support us because they are the alternative to us. But precisely because they are the alternative they have to put aside partisan battles in order to battle the pandemic.”

Concerns about Madrid

The prime minister also pointed to the way that some regions have been handling the ongoing coronavirus crisis – in particular Madrid, which is run by the PP with the support of Ciudadanos – as to the main reason for the rising infection levels in Spain. “The reasons are clear: mobility, nightlife,” he said. “Citizens have relaxed. But in administrative terms, the levels of contact tracing in some regions have to improve. We are placing contact tracers at the disposal of Madrid, as well as economic resources and joint-management efforts,” he said.

Sánchez defended Fernando Simón, the director of the Health Ministry’s Coordination Center for Health Alerts (CCAES), after the government’s chief epidemiologist highlighted Madrid’s coronavirus statistics at a press conference on Monday night, prompting criticism from the regional premier, Isabel Díaz Ayuso. “If Simón conveyed that message, it’s because we are concerned about the state of public health and the epidemic in Madrid,” the prime minister said. But he insisted that “the progress [of the coronavirus epidemic] is worrying, but bears no relationship to the situation in March.”

Sánchez also made remarks about the monarchy, agreeing that there could be more transparency in the royal household’s accounts but insisting that Spain needs “constitutional stability” right now and that this is not the right time to debate the institution despite the shockwaves created by the secret departure of former king Juan Carlos to the United Arab Emirates amid a financial scandal.

English version by Susana Urra.