What just happened to Spain’s prime minister, and what’s the fallout?

Prime Minister Mariano Rajoy leaves parliament after shaking hands with socialist leader Pedro Sanchez following a motion of no confidence vote at the Spanish parliament in Madrid on Friday. (Pierre Phillipe Marcou/Pool Photo via AP)

On Friday morning, Spain’s lower house, the Congress of Deputies, ousted Prime Minister Mariano Rajoy in a no-confidence motion. On Saturday morning, Pedro Sanchez, from the Spanish Socialist Party (PSOE), was sworn in as Spain’s new prime minister.

Rajoy had been prime minister for seven years, and was leading a single-party minority government of the Popular Party (PP) with parliamentary support from the center-right party Citizens (Ciudadanos) plus the Basque Nationalist Party (EAJ-PNV) and other smaller regionalist forces.

So what just happened, and what’s the fallout? 

1) Why did this just happen?

This was not the “Chronicle of a Death Foretold,” to borrow a Gabriel García Márquez title and plotline, but it was the first time in modern Spanish history that a prime minister was voted out using the no-confidence rule. Only a few days earlier, the cabinet had passed the annual budget in the Congress of Deputies, and the Rajoy government seemed poised to survive until the next mandated parliamentary elections in 2020. 

The decisive trigger was a ruling by the Audiencia Nacional, a high-level anti-corruption court, that declared that the PP had for years financed itself through illegal donations. A network of “friendly contractors” would receive generous public contracts and funnel part of that money to the party and its top officials. Although not part of this ruling, internal accounting documents suggest that Rajoy himself received illegal payments over a long period of time. 

The ruling took pundits by surprise, and opened a window of opportunity for the PSOE to present the no-confidence motion. The parties supporting the Rajoy cabinet suddenly found it too costly to remain in the coalition.

Most notably, the Basque Nationalist Party, which only days earlier wholeheartedly supported the annual budget, decided that it could no longer back the Rajoy government. Crucially, the two main Catalan nationalist parties (PdCat and ERC) decided to support the no-confidence motion. Despite their lack of sympathy for the Socialist Party or Pedro Sánchez, they could not afford to be seen as the parties that kept the Popular Party in office. 

2) How long will the new cabinet last?

According to the Spanish Constitution, no-confidence votes are “constructive” — the motion must propose a new prime minister, and to be successful, a majority of MPs must also support the alternative prime minister. This sets a higher bar: It is not enough to have a parliamentary majority that opposes the incumbent cabinet.

This institutional feature is intended to make sure that no-confidence votes only occur when a viable alternative government exists. Indeed, 180 out of 350 MPs supported Sanchez’s bid to take over as prime minister. This was higher than the 170 who backed Rajoy’s 2016 government.

Despite this apparent strong support, the Sanchez cabinet will probably last only a few months and snap elections will have to be called. Sanchez’s parliamentary support is more a rejection of the PP and its corruption record than an endorsement of the PSOE and its policies. Indeed, Sanchez has not reached any explicit policy agreement with any of the parties that supported the motion.

In addition, despite the fact that the PSOE holds fewer than one-fourth of the parliamentary seats, Sanchez intends to form a single-party cabinet. The coalition that supported the no-confidence motion is very diverse — it includes the left-leaning Podemos, the Christian-democratic Basque Nationalist Party and pro-independence Catalan forces. Hence, the range of policies that this coalition could agree on is rather limited.

3) Should we expect a change vis-a-vis the crisis in Catalonia? 

Spain’s new prime minister has limited maneuvering room vis-a-vis the Catalan crisis, and lacks the political capital to pursue an ambitious solution. Public opinion in Spain as a whole is fairly reluctant to make concessions to Catalan nationalists.

Most importantly, Sanchez does not have enough parliamentary support to initiate a constitutional reform that would accommodate some of the demands of the pro-independence movement, much less to propose a binding independence referendum. In addition, the government does not have direct control over the judicial authorities that are prosecuting several pro-independence politicians. 

The change of government could, however, lead to lower levels of confrontation between the Spanish authorities and the Catalan pro-independence movement. This could involve the resumption of normal institutional relationships between the Spanish government and the Catalan regional cabinet that has also just formed. And it’s possible that a change in attorney general may produce a more lenient approach in the prosecution of Catalan authorities who declared independence last October.

The Socialist Party has an interest in deescalating a conflict that benefits two of its main competing parties: PP and Ciudadanos — the parties perceived to be the ones most committed to defending Spanish territorial unity. However, if Sanchez can achieve such deescalation, it may reinforce his position in the parliamentary elections that will likely happen within the next year. 

4) Political instability in Italy and Spain — any relationship between the two? 

No. Despite the fact that new governments in Italy and Spain are forming simultaneously, these events differ substantially. The new Italian government is the result of elections in March that significantly reshaped the Italian Parliament, while the new Socialist-led cabinet in Spain has emerged from a parliament elected two years ago.

Most importantly, Italian political events have much stronger repercussions for the European Union than what happens in Spain. The two main Italian election winners, the Five Star Movement and the Lega, campaigned on platforms that are critical of the euro and European immigration policies.

In contrast, the Spanish Socialist Party is a classic Western European social-democratic party that favors eurozone membership — and its rules. Spain’s economy has grown 14 percent over the past five years, compared to just 6 percent growth in Italy, and Spain’s political parties remain pro-E.U. Last week’s sovereign bond market tensions, in fact, seem driven more by uncertainty about the orientation of the new Italian cabinet, rather than Spain’s no-confidence motion.

Pablo Fernandez-Vazquez is a postdoctoral fellow at the Carlos III – Juan March Institute. In August, he joins the University of Pittsburgh as assistant professor.

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