RANE
An Inconclusive Election Leaves Spain's Government in Limbo
Jul 24, 2023 | 16:34 GMT
The leader of Spain's center-right People's Party, Alberto Nunez Feijoo (center), and other top party officials answer questions during a post-election press conference in Madrid on July 24, 2023.
(JAVIER SORIANO/AFP via Getty Images)
Spain's inconclusive general election means it could be months before a government is appointed and another general election is possible, prolonging political uncertainty and policymaking paralysis. Spain's July 23 general election resulted in a fragmented parliament, where the center-right People's Party (PP) will control 133 of the 350 seats in the Congress of Deputies, followed by acting Prime Minister Pedro Sanchez's center-left Socialist Party (PSOE) with 122 seats, the far-right Vox party with 33 seats and the far-left Sumar coalition with 31 seats. Smaller regional parties (mostly from Catalonia and the Basque Country) will control the remaining 28 seats. These results mean that a potential right-wing coalition between the PP and Vox is 10 seats short of the 176 seats needed to appoint a government, while a potential left-wing coalition between the PSOE and Sumar is 23 seats short of a majority. After the election, both the PP and the PSOE said they will seek to lead Spain's next government.
It could be months before the next Spanish government is appointed. The new Spanish Congress of Deputies will start sessions on Aug. 17. A few days later (most likely on the week of Aug. 21), King Felipe VI will start consultations with the leaders of all the political parties to see if there is a majority to appoint a new prime minister. There is no concrete timeline for these consultations, meaning they could last for weeks.
If a coalition of parties believes it can appoint a prime minister, it will call for an investiture vote in the Congress of Deputies. In a first vote, an absolute majority (176 votes or more) is needed to win. But in a second vote, a simple majority (more votes in favor than against) is enough, which means that abstentions become crucial. If the vote is successful, a new prime minister will be appointed (which could happen around September or October). If the vote is not successful, all the parties in the Congress of Deputies will have two months to hold another vote of investiture.
If there is not another vote of investiture, or if there is one but it fails to appoint a new prime minister, Spain will hold an early general election within 47 days. This means that an early general election around December is possible.
While a right-wing coalition will struggle to find partners, a center-left coalition will have to make controversial concessions to Catalan parties to appoint a prime minister. The PP and Vox only need 10 additional seats to appoint PP leader Alberto Nunez Feijoo as prime minister. But they will struggle to find that support because Catalan and Basque regional parties are unlikely to contribute to the appointment of a right-wing government that would have tense relations with Catalan and Basque nationalists. This means that the PSOE and Sumar stand a better chance of winning the extra support they need to re-appoint Sanchez as prime minister, especially in a second vote of investiture when parties can simply abstain and help Sanchez win. In fact, this is how Sanchez became prime minister in January 2020, when the Basque Nationalist Party (PNV) voted in favor of his investiture while the Republican Left of Catalonia (ERC) abstained, allowing Sanchez to win the vote by a simple majority. The main party to convince will be Together for Catalonia (JxC), a pro-independence party founded by the Catalan region's former president Carles Puidgdemont. After Catalonia's illegal declaration of independence in 2017, Puidgdemont fled Spain to avoid being arrested, and he currently resides in Belgium. Unlike ERC, JxC voted against Sanchez's investiture in 2019 and has taken a much more hawkish approach to relations with the Spanish central government.
The PSOE has indicated that it will seek to convince JxC to abstain during a vote of investiture so that Sanchez can be re-appointed. This means that JxC will play a central role in the coming weeks, and Sanchez's political future will depend on the demands that it makes in exchange for its abstention. JxC's main demands will likely include a legally binding independence referendum in Catalonia and amnesty for the regional leaders who participated in the 2017 illegal declaration of independence (Sanchez has already pardoned the leaders who, unlike Puigdemont, stayed in Spain and were convicted). Both demands will be hard for the PSOE and Sumar to accept, as both parties are formally against Catalan independence (though sectors of both parties also defend the idea of granting additional autonomy to Catalonia, which could open the door to a compromise). Moreover, a legally binding referendum would probably require amending the Spanish constitution, which requires a three-fifths majority that is virtually impossible due to opposition from the PP and Vox. While a non-binding referendum would be legally easier to approve, it would still be controversial outside of Catalonia. Other Catalan demands, such as greater investment in infrastructure, should be easier for the PSOE and Sumar to accept.
Accepting an independence referendum in Catalonia (regardless of whether it is binding or consultative) or granting amnesty to the Catalan leaders who unilaterally declared independence would almost certainly result in large protests in several parts of Spain — especially (but not exclusively) among PP and Vox voters. Such decisions could also strengthen support for the PP and Vox in future municipal, regional and general elections.
Representatives from the Basque Country's largest parties, PNV and EH Bildu, have both suggested that they would support Sanchez in an investiture vote, in order to keep Vox from entering the next Spanish government.
Spain's political stalemate could last for months and potentially result in another general election, which means that policy paralysis and political uncertainty will continue. The negotiations to appoint a new government will consume significant time and energy for Sanchez's caretaker administration, which will likely severely slow or even paralyze policymaking, especially as the Congress of Deputies that will take over in August will not have a clear majority. As a result, no meaningful changes in policy should be expected in the next few months, as uncertainty about the future composition of the Spanish government lingers. Moreover, failure to secure support from Basque and Catalan parties would result in another general election by the end of the year, further delaying the legislative process. Such a scenario cannot be ruled out, especially if the PSOE and JxC cannot reach a compromise on the thorny issue of a Catalan independence referendum. Unless there is a significant change in Spain's political landscape within the next six months, there's a chance that another general election could again fail to yield a clear majority, meaning that political uncertainty and instability may last well into 2024.
The fact that Spain's caretaker governments cannot pass legislation unless an emergency is declared means that the risk of Madrid imposing new or higher taxes on households or businesses will remain low until a new government is appointed. However, if Spain doesn't have a government in place by the end of the year, the budget for 2023 will be replicated in 2024, which also means that Madrid will not have the opportunity to change or modify spending plans.
Spain's ongoing political turbulence coincides with the country's rotating presidency of the European Union, which takes place from July to December. As the bloc's president, Spain is supposed to act as an honest broker between EU member states to unblock negotiations over policy reforms, as well as promote its own agenda in Brussels (which ranges from the energy transition to deeper economic ties with Latin America). With the Spanish government so focused on domestic issues, Madrid's bandwidth to simultaneously deal with EU issues will be limited, which will diminish its role as president and probably reduce its influence over EU policies.
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