04 December 2015

What would a PP-C’s government look like?

Spanish PM Rajoy would be re-elected in December’s 20 General Election, but he’s not likely to make it back to government alone. A coalition with the most plausible king-maker - the C’s - seems possible. We review the common ground in their policies on economics and towards the EU.

By Paula Martín Camargo, Editor

The electoral campaign just kicked off and the only convincing outcome for observers is that Spain will not have a clear government on 21st December. According to many political experts and Foundation Robert Schuman, the two weeks left before voting day will be more decisive than usual: this might be due to the high volatility of the electorate (around 40% have not  decided their vote yet) and to the political drift of Catalonia.

Latest polls

Governing PP would win the largest share of the vote with 28.6% but will not achieve an absolute majority. Therefore they would need to form a coalition to be able to rule for the next four years, according to the latest opinion poll released this week by the state-funded Centre for Sociological Research (CIS). The outcome of the survey confirms emerging C’s as the key to the re-election (with 19% of the votes). Its leader Albert Rivera would be  the most popular politicianin Spain (with a rather poor 4.98 points out of 10 in the popularity polls – none of the leading politicians would pass them and Rajoy is last in the list, with 55% of the population declaring they wouldn’t vote for the PP in any case). The socialist PSOE would be second (20.8%) and the leftist Podemos, although recovering from its collapse in the autumn would remain in fourth position (9.1%).

Source: CIS (Graphic by El País newspaper)

But the volatility of public opinion generates tight results - as shown in the voter intention poll published by Metroscopiafor El País newspaper. A virtual three-way tie would make it possible for the PP’s Rajoy and the PSOE’s Sánchez to form the government with the aid of C’s votes. The conservative PP would have a tiny lead, with 22.7% - but less than 1 percentage point separated all three parties. This minimal distance between PP, C’s and PSOE illustrates the small possibility of any of them prevailing in the very close final sprint.

Source: Metroscopia for El País

A PP-C’s coalition government: what would it look like?

The fast-growing C’s leader - Albert Rivera - has been selected by POLITICO as one of the 28 peopleacross the 28 EU member states that “are shaping, shaking and stirring Europe”: “In all of this meltdown, one party stands out, representing an Insurrection of the Center — an oxymoron, all things considered. Spain’s Ciudadanos — Citizens — is selling itself as the embodiment of measured, centrist rationality.”

POLITICO hints at the possibility of Rivera not engaging with any of the traditional political parties that might give him access to the government, or doing it only in the event of agreeing that PP’s Rajoy or PSOE’s Sánchez would step down and let him be Prime Minister.

We now consider a possible coalition between PP and C’s and outline their policies in economics and towards the European Union. Whilst there are clear divisions on economic policy, EU policy seems sufficiently aligned that they could both support the goal of greater integration set out in the Five Presidents’ Report.

Economy

Rajoy intends to maintain the same economic policy options in his programme as the outgoing government and will try to reap the benefit from the economic recovery. But C’s banks on a total makeoverof the Spanish economic model.

• Albert Rivera aims for the introduction of a harmonised work contract in order to bring an end to a "two-tiered" labour market that divides contracts between highly protected workers and temporary employees who have even “less protection than in the USA”, says Luis Garicano, senior lecturer at the London School of Economics and the author of C’s economic programme.
• But this would be a red line for the PP, which sees its labour reform as the ‘jewel in the crown’. So the conservatives want to keep the latest rules they have applied to the job market and back entrepreneurship, employment of the young (via a European Juvenile Warranty, negative contributions of employers to the State to boost hiring) and stimulate training of the long-term unemployed.
• C’s would like to reform entrepreneurship, helping free-lancers by linking taxes to income. Another measure proposed by Rivera is a ‘training cheque’ for the unemployed: labour and management unions provide training for the unemployed, and C’s wants each person to be able to seek education where they want – the State will pay a cheque after the training has been completed.
• PP and C’s agree on an individual fund equivalent to 1% of the employee’s salary in case of firing o retirement – the so-called ‘Austrian bag’.
• C’s propose several measures to help the disadvantaged and the middle class: a salary complement for low incomes through a negative contribution to the social security, plus a 3% cut on the Income Tax of the middle class for stimulating consumption. The PP has stated that it will lower taxes in general and the Income Tax as well.
• A revision of the Justice system is the most important ‘economic’ reform for Rivera: C’s claim to be a party against corruption, and thus want to ‘clean up’ Spanish institutions. Rivera has claimed this won’t be possible without effectively separating Justice from Politics. His aim is to depoliticise the Spanish Administration in general, an objective PP has always refused to carry forward.

Europe

Both parties back further integration within the EU, but PP talks about a “stronger Spain in Europe” while C’s support the effective uniformity of all European member states in a truly citizen’s union.

• Albert Rivera asks for“Europe and more Europe” in his electoral programme, proposing a special procedure for transferring sovereignty from Spain to the EU with the respect to the fundamental principles established in the Spanish Constitution as the only limit.
• Rajoy supportsdeepening the Banking and Fiscal Union and the CMU as a means for financial stability and transparency. The PP also endorses the drive for a Political Union as well as a common European policy in Migration and Asylum and the TTIP agreement.