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Spain’s political uncertainty is heating up this summer. Some crucial events are sending the country deeper into the tense political situation the country has been undergoing for quite some time now.
On the one hand, the concessions the current President, Socialist Pedro Sánchez, has done to Catalan party ERC to have them support the appointment of Socialist Salvador Illa as regional President, has ignited a lot of criticism not only amongst the opposition Popular Party but even within the Socialist party itself.
Catalan Socialists won the Regional elections on May 12, but they did not have enough of the votes to rule by themselves. Therefore, they have had to negotiate with third-most-voted party, independentist left-wing, ERC – the second most voted one was also independentist party Junts – to add up enough of the regional parliament support to appoint a Socialist president.
Those negotiations have been tough, and the Socialist Party has had to do considerable concessions. According to the agreement reached, the Catalan government will now be allowed to leave the national taxation regime and be the sole collector of all taxes paid in the region, among other measures. This has caused great political unrest as it leaves Catalunya in a more favorable position compared to that from the rest of the Spanish regions.
One of the main consequences these concessions have is that it triggers the lack of support by most of the other parties in Congress, hindering the future approval of the General State Budget.
In addition, last July 30th, for the first time in Spain’s history, a Prime Minister has been interrogated by a judge at the Palace of Moncloa, the president’s official residence. Pedro Sánchez was questioned as a witness in the ongoing investigation of his wife, Begoña Gómez, for influence peddling. Sánchez invoked the spouse’s right not to testify against his wife.
Even if this process finally comes to nothing and Gómez is acquitted, both the President’s image and that of this Government have already been stained by the judicial investigation. Bear in mind that it was precisely a motion of censure following a corruption case what allowed Sánchez to become President in 2018 and put an end to the previous government, of the Popular Party.
Amid all this, the economy shows positive growth prospects, unaffected by national political ups and downs or the geopolitical tensions. Spain remains an attractive destination for investments, as the IMF recently confirmed.
The international organization maintains Spain among the countries with the highest growth in 2024 and 2025, raising its GDP growth projection by half a point to 2.4% for this year and 2.1% in 2025. Spain is thus the second fastest-growing major industrialized economy, surpassed only by the USA this year and Canada next year.
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