Global Economic
Trend Analysis

Recent Posts

Saturday, January 09, 2016 3:41 PM

Pro-Independence Spanish Parties Strike Deal to Form Government, New Catalan Election Called Off; Rajoy in Hot Seat

Mish Moved to MishTalk.Com Click to Visit.

Deal Announced

The Spanish political situation today is a lot different than a week ago. New elections were at hand in Catalonia if pro-independence parties could not resolve their differences.

Today, the bickering parties set aside those differences in a striking deal to form a new government, guaranteed to raise a strong reaction from Madrid.

To understand what led up to today's announcement, let's backtrack to fill in a few pieces.

On January 3, the Financial Times reported Leadership divisions deal a blow to Catalan hopes for independence.

The two main independence parties — the mainstream Junts pel Si movement and the anti-capitalist CUP — won a majority of seats in the Catalan parliament in a landmark regional election last September. Since then, however, the CUP has made it clear that it will not support Artur Mas, the current regional president and the de facto leader of Junts pel Si, for another term in office.

Mr Mas, a relatively late convert to Catalan independence, is seen by many CUP leaders and activists as too centrist and business-friendly. The Catalan president has also been damaged by a string of corruption scandals that hit his party over the past year.

The rejection of Mr Mas leaves the broader Catalan independence campaign in a difficult position — and with a clear sense of an opportunity wasted.

For the Spanish government, meanwhile, Sunday’s decision will come as a relief. Madrid is fiercely opposed to Catalan independence, arguing that Spanish regions have no right of self-determination and that any step towards separation from Spain violates the constitution.

With the Catalan independence camp in disarray, Spain’s mainstream parties can focus on resolving their own political dilemma: last month’s general election produced a highly fragmented parliament, with no party close to holding a governing majority.
No Relief for Madrid

The sigh of relief in Madrid was short-lived. At the last minute, a deal has been announced that will make matters worse for Madrid than if CUP had gone along with Artur Mas as president.

The new president will likely take an even firmer stance on independence, not only from Spain, but the EU.

Expect a  major reaction from Prime Minister Mariano Rajoy soon. 

Pro-Independence Spanish Parties Strike Deal to Form Government

Please consider Pro-Independence Spanish Parties Strike Deal to Form Government.
The two pro-independence parties in the Spanish region of Catalonia have struck a last-minute deal to form a new government, after regional president Artur Mas agreed to step aside and let another politician lead the planned push towards secession.

Confirming his decision in a press conference on Saturday evening, Mr Mas said: “The most important principle is the country and its people. They stand above any party and above any person.” Mr Mas and other independence leaders had until midnight on Sunday to either form a new regional government or resign themselves to an early election.

The decision is likely to have important repercussions both for the region and for Spain at large. The new Catalan government plans to steer the region towards a historic break with Spain over the next 18 months, by effectively setting up a state within the state — from a Catalan central bank to a separate tax authority.

Any such move is certain to invite a furious reaction from Madrid. In the short term, the Catalan accord is also likely to raise the pressure on Spanish political leaders from the centre-right to the centre-left to set aside their differences and form a strong unionist government. Party leaders in Madrid have been at loggerheads since Spain’s inconclusive general election last month, which left even the strongest party — the ruling Popular party of Prime Minister Mariano Rajoy — far from a governing majority.

Mr Rajoy has repeatedly urged the centre-left Socialists to support him as part of a national unity government designed to fend off the Catalan challenge. That appeal is now certain to gain in urgency.

Saturday’s deal marks a striking reversal for Mr Mas and his Junts pel Si movement, which had insisted until the last moment that it would not sacrifice the veteran leader. But with talks deadlocked, and a repeat election moving ever closer, Mr Mas finally agreed to make way for a party colleague, Carles Puigdemont, the mayor of Girona. The former journalist and editor is expected to be voted in as president of Catalonia in a special session of the regional parliament on Sunday.

The decision to swap out presidents followed months of talks between Junts pel Si, the more mainstream of the independence parties, and the Popular Unity Candidacy (CUP), a far-left secessionist group. Last September, the two parties won a majority of seats in the Catalan parliament, but then fell out over the issue of who should lead the next regional government.

Mr Mas’s Junts pel Si party is by far the bigger of the two, holding 62 of the 135 seats in the Catalan parliament. But the CUP, a fiercely anti-capitalist party that rejects Catalan membership of both the EU and Nato, refused to back him.
National Election Implications

The December 20, Spanish national election left Spain in political shambles.

I wrote about the results in Spanish Election: Two-party Dominance Ends; Rojoy's PP Party Fails to Win Majority; Vote Buying Spanish Style; Fragile Coalition Possibilities.

Here were the results (revised slightly from my original post)

  • People's Party PP (Conservatives): 123 seats, 28% of vote
  • PSOE (Socialists): 90 seats, 22% of Vote
  • Podemos (Eurosceptic, Anti-Austerity Socialists): 69 seats, 20.5% of vote
  • Ciudadanos (Anti-corruption, nationalistic party): 40 seats, 14% of vote
  • Others:  28 Seats

Many expected PP and Ciudadanos would have enough seats form a majority. Ciudadanos had been polling above 20% with Podemos sinking.

Like PP, Ciudadanos is very much against the separatists in Catalonia, and very pro-euro.

But 123 + 40 does not reach the 176 needed for an outright majority.

Most of those "other" seats are for various separatist parties. So don't count on those votes.

The socialists and conservatives could form a government, but how stable would that be?

PSOE, Podemos, and Ciudadanos could in theory form a coalition but huge philosophical differences abound. Podemos is eurosceptic while Ciudadanos is very pro-Europe. In addition, Podemos is open to separatist elections and Ciudadanos would never go along.

Ciudadanos, an anti-corruption party can hardly strike a deal with the corrupt and ruling PP without losing face. And even if it did, the votes are not there. Podemos is in the same boat.

Prime minister Mariano Rajoy will likely appeal to all the other parties as a way to counteract the Catalan independence movement, but socialists and conservative don't mix well and the resultant government would be very weak.

Look for intense pressure from many quarters for a PP/PSOE alliance just to keep the separatists at bay.

New National Election Likely

The Catalonia regional election will stand. But new national elections still seem likely, with unknown consequences.

Mike "Mish" Shedlock

Last 10 Posts

Copyright 2009 Mike Shedlock. All Rights Reserved.
View My Stats