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POLITICS

Spain campaign draws to close ahead of Sunday vote

Spain wrapped up its final day of campaigning Friday ahead of Sunday's snap election, with Prime Minister Pedro Sánchez telling voters his Socialists were closing the gap with their right-wing rivals.

Pedro Sanchez
Spanish prime minister and candidate of the Spanish Socialist Party (PSOE), Pedro Sánchez, waves at the end of the campaign closing rally in Getafe, outskirts of Madrid, on July 21st, 2023 ahead of the July 23rd general election. Photo by: JAVIER SORIANO / AFP

Final opinion polls, that were published on Monday, tipped the right-wing Popular Party (PP) to win the most seats but without securing a working parliamentary majority.

That could force the PP to form a coalition government with Vox, in what would be the first time a far-right party holds a share of power in Spain since the end of the dictatorship of General Francisco Franco in 1975.

But the PP’s campaign has stumbled in the final stretch with its leader Alberto Núñez Feijóo facing renewed questions about his ties with notorious drug trafficker Marcial Dorado back in the 1990s when he was a senior official in the regional government of Galicia.

And he was also caught out over incorrect claims during a TV debate that the PP has always approved pension hikes.

“I see the Popular Party as running out of steam while the Socialists are making a comeback,” Sanchez told public television on Friday morning.

“We’re going to win the elections and we’re going to win them resoundingly!,” he added at a final rally on Friday evening in Getafe, a southern Madrid suburb.

Earlier this week, Sánchez laid into Feijóo for “missing an opportunity to clarify the nature of his relationship” with Dorado, a tobacco smuggler who was later convicted of drug trafficking.

In 2013, the left-leaning El Pais newspaper published photos of the pair on Dorado’s boat and on holiday in Ibiza and the Canary Islands when Feijóo headed Galicia’s health service.

Sánchez has mocked Feijóo’s claim that Google did not exist at that time, meaning it was difficult to know what Dorado was up to.

‘Wind of change’

The prime minister has centred his re-election campaign on his economic record, highlighting Spain’s growth and inflation figures that have outperformed most of its EU peers.

While most recent opinion polls suggested the PP and Vox are on track to form a working majority in the 350-seat parliament, some showed the pair falling short.

That would give the Socialists a chance to form another government because they have more options to create alliances with the far-left Sumar coalition and other smaller parties.

But analysts said they could not rule out the possibility that neither side could secure a working majority, which would force a repeat election as happened in 2019.

In office since 2018, Sanchez called the early election after his Socialist party and its far-left coalition partners suffered a drubbing in May’s local and regional elections.

Feijóo told Friday’s El Mundo newspaper that he “sensed a wind of change” in the country.

‘Rubbish’

During his final campaign rally in Galicia, he appealed for massive support, saying he wanted to govern “alone”.

Feijóo has vowed to undo many of Sánchez’s laws, including one which allows anyone 16 and over to change their gender on their ID card on the basis of a simple statement.

He also lashed out at Sánchez over his remarks about Dorado.

“I did not expect the prime minister would use this rubbish to try to discredit his opponent,” he told COPE radio.

The PP and Vox have attacked Sánchez’s minority coalition for relying on the votes of Catalan and Basque separatist parties to pass legislation, denouncing it as a “betrayal” of Spain.

Sánchez, meanwhile, has blasted the PP for forming local and regional alliances with Vox, which opposes abortion, denies climate change and rejects the need for government efforts to tackle gender violence.

Since the May 28th elections, Vox is now in power in more than 140 municipalities – either alone or in conjunction with the PP – and also jointly governs with the PP in two other regions.

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POLITICS

The plan for Catalonia to handle its own finances separately from Spain

Catalan separatists are pushing for 'financiación singular' to gain greater fiscal autonomy from the Spanish state, but the proposals are tied up with politics at the national level.

The plan for Catalonia to handle its own finances separately from Spain

The recent regional elections in Catalonia in May were hailed by political pundits as the end of the procés and turning the page on the Catalan question. The evidence for this was that separatist parties lost their majority in the regional legislature for the first time in over a decade and that the Socialists (PSOE) won the most votes overall.

However, since then things have been far from simple. The PSOE candidate, Salvador Illa, is yet to secure an investiture vote and the political horse trading is ongoing with ramifications for Prime Minister Pedro Sánchez’s fragile majority at the national level.

The controversial amnesty law pushed by Sánchez’s government then got clogged up in the courts, despite being approved in the Congress, and Catalan separatist parties managed to cling onto the role of speaker in the regional parliament. Catalan lawmakers elected Josep Rull, a member of the hardline separatist Junts per Catalunya, which is led by exiled former Catalan President Carles Puigdemont.

READ ALSO: Separatists retain speaker in new Catalan parliament

The important context to understand here is that the Sánchez government is dependent on separatist parties, including Junts and the more moderate Esquerra Republicana de Catalunya (ERC). After inconclusive general election results last summer, Sánchez essentially made a deal with the Catalans in exchange for their votes to maintain his position in La Moncloa.

Catalan finances and national politics

Now separatist parties, particularly ERC, are leveraging this support in order to gain concessions from the national government. The main way they’re doing this is through a demand for financiación singular — ‘singular financing’. That is to say, how Catalonia raises and uses taxes, and whether or not it should be allowed greater fiscal autonomy closer to something like the Basque model.

ERC secretary general Marta Rovira has said in the Spanish press that greater fiscal autonomy “is the minimum that can be demanded,” and alluded to the conditionality of their support for Sánchez: “The Socialists must know that if Pedro Sánchez is not able to move on the singular financing… it will be very difficult for ERC to support him. Salvador Illa must bear this in mind.”

la financiación ‘singular’

But what is singular financing? Former president of the Generalitat, Pere Aragonès, described the plan as “full fiscal sovereignty” in the election campaign, and essentially what the ERC is proposing is a bespoke fiscal arrangement for Catalonia that allows the Generalitat to collect (and keep) more of its taxes.

This would be a step, albeit financial rather than constitutional, towards greater regional autonomy for Catalonia and likely viewed as a political victory for separatists.

For critics of Sánchez, it would be more evidence of his capitulation to Catalans.

Singular finance is an idea inspired by the so-called “Basque quota”. This is basically a fiscal arrangement that allows the Basque government control of most of its taxes but means it must also contribute a set ‘quota’ to the Spanish government.

READ ALSO: Spain’s contested Catalan amnesty bill comes into force

In Catalonia, the long-term aim would be something similar: for the Generalitat to collect all (or more than it currently does, at least) of the taxes paid in Catalonia and then transfer to the Spanish state an agreed portion of that.

In terms of cash, this would mean that the Generalitat would collect billions more in tax (some estimates put it as high as €52 billion overall) and more than double the €25.6 billion it received in 2021 under the current model.

Proponents of the singular finance model also suggest that giving the Generalitat greater fiscal autonomy would do something to redress the so-called ‘Catalan deficit’, the difference between what the Catalan economy contributes to the Spanish state coffers and what it receives in return investment. Generalitat estimates for 2021 put this figure at over €20 billion in 2021.

Therefore, the demand is not only political but economic. The ERC claims that changing the fiscal model would do something to resolve what it calls the “chronic underfunding” of the region.

Negotiations for a singular financing model, which will be tied up in the investiture negotiations for Illa, which are themselves tied up in the fragile arrangement at the national level, will likely continue for many weeks.

If no candidate has won an investiture vote in the regional parliament by August 25th, further elections will be called.

READ ALSO: Which Catalans want independence from Spain?

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