Catalonia Sinks Another Spanish Government

(Bloomberg Opinion) -- The foundations underpinning Spain’s governing coalition look set to crumble. The support of Catalan separatists has proved to be unreliable. But Prime Minister Pedro Sanchez may have shown enough generosity to voters to do well in an early election.

When socialist Sanchez ousted Mariano Rajoy, then leader of the conservative People’s Party, in June, he couldn’t have mustered the necessary majority without what the latter called a “Frankenstein coalition.” That shaky alliance included Catalan separatist parties eager to avenge Rajoy’s crackdown on their independence drive in 2017. To them, helping Sanchez, who at least declared himself open to negotiations, looked like a good idea at the time.

By December, however, the dialogue had hit a dead end. Sanchez remained adamant that he wouldn’t allow the Catalans to hold an independence referendum. To keep their support, the government moved in three separate directions: Sanchez has tried to revive negotiations involving an independent intermediary. The government has weakened the charges the former Catalan leaders who declared independence in 2017 are facing to sedition from rebellion. It has also offered to increase the money earmarked to the region to 18.5 percent of total regional spending this year from 13.1 percent in 2018, making Catalonia the biggest recipient of central government funding.

All of these enticements appear to have failed. The Catalans have made it clear they only want to talk if an independence referendum is on the agenda. It isn’t; last weekend, there were mass protests in Madrid against any negotiations at all. Quim Torra’s separatist government in Barcelona is seeking the release of the 12 leaders of the 2017 revolt now on trial in Madrid – not a trial on lesser charges. And the promise of more money hasn’t appeased Spain’s wealthiest region, which wants to keep a bigger share of the taxes it collects locally anyway.

When the Spanish parliament votes on Sanchez’s budget on Wednesday, it’s unlikely that the 17 Catalan separatist lawmakers will back it. If the measure fails, Sanchez may call an election to coincide with May’s European Parliament vote.

That, however, may well be what Sanchez wants. There’s a good chance his party would do better than in 2016, when it won 22 percent of the vote and came second after Rajoy’s People’s party. Now, the polls give the Socialists a 23 percent to 25 percent share of the vote, enough to make them Spain’s biggest political force. If Sanchez can improve on his numbers in the next three months, he could have a chance to form a more stable coalition.

Sanchez can reasonably hope for more support because he has been generous to voters. He pushed through a near 22 percent increase in the minimum wage, bringing it to 900 euros ($1,015) from the start of this year – a bold move that affects 1.2 million workers. The draft 2019 budget also includes pension increases.

The European Commission has warned Spain that it doesn’t believe the government will be able to make up for the extra spending with more revenue from financial transactions and digital taxes. But, for Sanchez, it’s important to be seen as a champion of more social spending after a decade of austerity.

As has often been the case in Spain’s increasingly fragmented politics in recent years, the architects of the current crisis are taking bold gambles. The prime minister is hoping his generosity will propel him to an election victory, even if the polls don’t give him a clear path to a stronger coalition. The Catalans risk toppling the relatively benign Sanchez cabinet and facing a much harsher right-wing government after the election.

That coalition would consist of the People’s Party and the center-right Citizens. It would be backed by the far-right Vox party – a grouping whose opposition to Catalan independence is, if possible, even more implacable than the other two. Such an arrangement already exists in Andalusia after the 2018 regional election, in which Vox did surprisingly well. Nationwide polls suggest that would be a more likely outcome of an early election than any possible Sanchez-led, leftist coalition.

In the long term, however, the Catalan separatists have nothing to gain whichever parties win in Madrid. Their ultimate goal of secession is incompatible with the agenda of the country’s main political parties as well as its constitution.

But their cause may still be well served by a more implacable stand-off with the central government than is possible under Sanchez. Tension and suffering help the secessionists get votes in Catalonia; rejecting one compromise after another isn’t as sustainable a strategy.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Leonid Bershidsky is Bloomberg Opinion's Europe columnist. He was the founding editor of the Russian business daily Vedomosti and founded the opinion website Slon.ru.

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