New government, same problems

The appointment of a new Government in Spain has been received with some relief within the normalization process that is required after more than six months of provisional government. However, the same problems and concerns remain as before the beginning of the recent difficult and divisive electoral cycle.

The first of these problems is, precisely, that of division. Spain emerges from the general elections of July 23 and the subsequent long process to form a new Government more divided and with a more polarized society. The distance between the two main parties, the Popular Party (PP), on the right, and the Spanish Socialist Workers Party (PSOE), on the left, has increased considerably. At this time, it is almost impossible to think of measures agreed upon between these two parties to improve the economy and promote the country’s progress.

This division and unrest in society is due, in part, to the way in which the President of the Government, Pedro Sánchez, has negotiated his continuity in office. Sánchez has managed to revalidate his position thanks to the support obtained by the Catalan independentists in exchange for an amnesty for the crimes committed with the celebration of the illegal referendum on October 1, 2017. One of the beneficiaries of this amnesty will be Carles Puigdemont himself, who is a fugitive from Spanish justice.

This amnesty has been criticized by all organizations of judges, lawyers, notaries, as well as by the majority of senior employees of the Public Administration. Hundreds of thousands of people have demonstrated in the streets against this measure, which has also aroused criticism and distrust among members of the European Parliament.

The concessions to the independentists and other government partners, such as the coalition of far-left Sumar, have also caused concern in some sectors of businessmen due to the risks to legal security required for investment in the country. Some leaders of prominent companies have spoken publicly in this regard and have warned of the need to create conditions of stability and guarantees as soon as possible to facilitate the development of economic activity.

It is difficult to anticipate when and how that political stability can be restored. Some even predict a short life for the Government that has just been born, although the PP does not have enough seats in Parliament to attempt a motion of censure, not even with the support of the far-right party Vox.

In any case, it is better to prepare for a prolongation of the political instability that has dominated Spain in recent months. Any business initiative in this country must take into account that political scenario as much or more than strictly economic conditions.


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