Article / 11 August 2016 at 3:03 GMT

Are the grubby politics of Spain set to be cleaned up?

Managing Partner / Spotlight Group
United Kingdom
  • Two successive Spanish general elections have failed to deliver a clear result
  • Since December 20, 2015, government has been by "supply and confidence"
  • Talks are occurring that may establish a working government
  • The centrist Ciudadanos party indicated it is ready to back acting PM Mariano Rajoy 
  • Ciudadanos has put a reform package that embraces anti-corruption on the table
  • Will politics in Spain finally cut out corruption?

By Stephen Pope

The Kingdom of Spain has become rather well versed in general electioneering of late. National plebiscites have been held twice in the last nine months, on December 20, 2015 and June 26, 2016. On both occasions no single party was able to win an overall majority. 
Spanish Election
Spanish Election
 PP (People’s Party); PSOE (Socialist Party); C (Ciudadanos); ERC (Left of Catalonia); 
DL (Democracy and Freedom); Unidos Podemos (Podemos + United Left + Equo and other small left).  350 seats, 176 required for a working majority

Source: both charts, Cortes Generales of the Kingdom of Spain.

Indeed, until now, the governance of Spain has been by a process known as “supply and confidence”. That means that the other parties with representation in the Cortes Generales will supply their votes to the largest party when they have confidence in the policy being proposed serves the national interest.

 Who's in charge? Despite two successive Spanish general elections
a clear result is yet to be delivered. Photo: iStock

Spain's acting Prime Minister Mariano Rajoy (of the PP) held talks on Wednesday, August 10 with the leader of the small, business-friendly Ciudadanos party, Albert Rivera. He indicated that he was prepared to negotiate with the acting Prime Minister on supporting Rajoy's bid to form a government with a working majority.

That is interesting as the two parties have 169 seats between them; 176 is required for a majority in the Cortes. So Rajoy's conservative PP, in power since 2011, would still have to seek outside support or horse trade to secure abstentions to win any vote. So in effect, “supply and confidence” still rule the day in Spain.

Rivera had previously said his party would abstain in votes within the Parliament as against support or oppose the largest party. However, on Tuesday, August 9 he indicated that this could change if the acting Prime Minister were to agree to a six-point reform package.

This would embrace electoral law reform and measures to tackle anti-corruption and a lack of transparency. Spain is the 36th least corrupt nation out of 175 countries, according to the 2015 Corruption Perceptions Index reported by Transparency International.

News releases from the meeting suggested that Rajoy said he would put a list of the six conditions set out by Rivera to a vote in his party’s executive committee. Rajoy said the following after the meeting: “...The important thing is for Spain to have a government as early as possible.”

Rajoy was not willing to comment directly on the list of conditions but he referred to the smaller party’s move as a: “...good decision for Spain...”

Brown envelopes in Iberia

There is a widespread desire to see both national and local politics cleaned up and maybe the worst stain of recent years is on the record of the PP.

Up to 40 people, including three former party treasurers, businessmen and local officials currently await trial over an alleged kickback scheme operating right at the heart of the conservative PP.
The bribes-for-contracts scheme involving the embezzlement of €449 million of taxpayers’ money allegedly extended to six regional PP governments and operated from 1999 to 2009, when investigations into the case began.

At the centre of the alleged corruption network is Francisco Correa, a businessman who, it is claimed, paid a series of bribes including cash, new cars and hotel stays. He also allegedly paid for the birthday parties of politicians’ children; in return, he was allegedly granted contracts paid for by the Spanish taxpayer all of which he was allowed to pad with profit-making potential.

A spinoff from this case centres on an allegation that the former PP treasurer ran a secret slush fund for 18 years through which envelopes of cash were handed over to elected officials. The case threatened to implicate Prime Minister Mariano Rajoy himself, after leaked ledgers belonging to Luis Barcenas were alleged to show irregular payments to top party members including Rajoy.
Barcenas is suspected of having concealed close to €50 million in secret Swiss bank accounts.

With the case listed above in mind, Ciudadanos also wants Rajoy to accept a parliamentary committee of investigation into his party’s 2013 slush fund scandal. This is an issue that has caused considerable personal embarrassment on the PP leader. One has to wonder if Rajoy is too tainted to serve as Prime Minister?

Do not think that this is just an example of the unacceptable face of capitalism mingling in right-of-centre politics. Political parties from the other side of the spectrum are also tarred by the corruption brush.

The so-called ERE case is a massive probe into the misuse of some €150 million in public funds by Andalusian Socialist government officials including former regional president José Antonio Griñán, their business associates and even the major trade unions.

Subsidies meant to help companies pay employees’ redundancy packages or early retirement were paid out fraudulently and public officials spent a fortune of public money on cocaine and escort girls.

So it is no surprise that the list of demands calls on the PP to remove all officials from all parties who have been formally accused of corruption, and to stop handing out state pardons to politicians convicted of corruption. It seeks an overhaul of the electoral voting system with a view to ending the built-in discrimination against smaller parties and an end to legal privileges for politicians and office-holders.

Time for a new broom ... there is a widespread desire in Spain to see both
national and local politics cleaned up. Photo: iStock

Green light

A third election in Spain would do nothing to resolve a deadlock that has left the country without a new government for nine months. State pollster Centro de Investigaciones Sociologicas said the number of people who do not even bother to vote is on the rise.

The PP would maintain its leading position in another election, winning 32.5% of the vote, the survey showed. That would be a decline from the 33% garnered in the June 26 election and would still leave it far from a parliamentary majority.

Therefore, although some demands will be hard to swallow for the PP leadership, most analysts argue the Ciudadanos list will be ultimately acceptable as a base for launching cross-party negotiations.

If the PP committee approves the list of conditions, that is widely expected, the two parties would begin the appointment of negotiation teams and agree a date for a parliamentary vote on Rajoy’s candidacy to become Prime Minister and generate a period of political stability for Spain.

– Edited by Gayle Bryant

Stephen Pope is managing partner at Spotlight Ideas. Follow Stephen or post your comment below to engage with Saxo Bank's social trading platform.


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