Catalan Crisis Drags Rajoy Down as Party Whispers of Change

(Bloomberg) -- The Catalan crisis is proving to be a millstone around the neck of the Spanish prime minister.

Mariano Rajoy saw his People’s Party routed in elections in the rebel region last month and it has plumbed historic lows in opinion polls as the premier’s hesitant efforts to keep the push for independence in check disappoint voters across the rest of Spain.

With the separatists due to retain control of the new Catalan parliament when it sits for the first time on Wednesday, people close to the PP leadership have started discussing whether the prime minister’s time in office may be drawing to a close.

One person said Rajoy himself may consider stepping aside if he sees little chance of reelection, asking not to be named because the issue is sensitive. Another said the party would need an alternative candidate at least a year before the election to build up their profile.

That means the 62-year-old prime minister may have another 12 months to turn things around with no general election due until June 2020. The municipal, regional and European elections all due next year could become a critical test.

“Rajoy is very likely aware of the push for renewal everywhere,” said Narciso Michavila, chairman of pollster GAD3, which has done external advisory work for the PP. “He’s probably open to the idea that he won’t be the candidate at the next election.”

A PP press officer said she could neither confirm nor deny that some officials are questioning Rajoy’s position. A press officer at the prime minister’s office said Rajoy is focused on seeing out his term and creating jobs while polls offer only a snapshot of the situation.

Rajoy’s Mistakes

Rajoy this week called a meeting of the PP’s national committee in a bid to fight back. He acknowledged mistakes in his handling of Catalonia’s bid to break away from Spain and urged his supporters to turn the agenda back to the economic success story. He pledged salary increases for civil servants and police if he can muster support for a 2018 budget and proposed a boost to some pensions.

“As a party we made mistakes, we recognize them and we will have to learn from them,” Rajoy told an audience of party officials in Madrid. “The government’s response to this situation has been good for Spain even if it wasn’t good for the People’s Party.”

On Catalonia, Rajoy handed the initiative to his centrist rivals, Ciudadanos, by hesitating for months before he finally blocked the push for independence. As the prime minister maneuvered for political cover, Ciudadanos’s leader Albert Rivera was demanding the government take action, appealing to millions of voters inside and outside Catalonia who were outraged by the separatists.

Since December, four national polls have shown support for Ciudadanos rocketing, less than three years after the party won its first seats in the national parliament. The last two surveys showed Ciudadanos leading the PP for the first time.

The prime minister faces another test to his authority this month, after separatist groups agreed Tuesday they’ll install ousted president Carles Puigdemont for a second term as Catalan leader, even as he remains in self-imposed exile in Brussels. Rajoy has said he’ll use the courts to block any attempt by Puigdemont to take office remotely, arguing that it’s a breach of the parliamentary rules.

In general elections in 2015 and 2016, Rajoy managed to shore up his vote by telling pragmatists that he was best placed to deliver economic growth. But the emergence of Ciudadanos as the most effective pro-Spain party in Catalonia will weaken that argument going forward, according to Kiko Llaneras, the founder of Madrid-based political-risk adviser Quantio.

“There is still time for Rajoy to rebuild his case,” Llaneras said. “Now the difference is that it’s harder for the PP to attract those pragmatic voters.”

To contact the reporter on this story: Esteban Duarte in Madrid at eduarterubia@bloomberg.net.

To contact the editors responsible for this story: Alan Crawford at acrawford6@bloomberg.net, Ben Sills

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