MADRID – Spain’s lower house of parliament voted down on Wednesday the minority government’s budget proposal, dealing a significant blow to embattled Prime Minister Pedro Sanchez, who was now likely to call early general elections.
An improbable coalition between lawmakers of the right-wing Popular Party, the center-right Ciudadanos (“Citizens”) and two Catalan separatist outfits narrowly defeated the budget plan put forth by the ruling Socialist Party, which was backed by the left-wing Unidos Podemos (“United We Can”) and the Basque Nationalist Party (PNV) and had been hailed as the most progressive and socially ambitious spending bill since Spain’s transition to democracy 40 years ago.
“The far right is gaining ground in this country,” said Finance Minister Maria Jesus Montero after the vote. “This rejection of our budget is a confirmation that the right is attempting to put a brake on social progress.”
“It’s bad news for Spaniards,” she added while acknowledging that it was difficult for the minority executive to rule without broader legislative support. “The PM needs to call elections so that there can be a solid government capable of not buckling under the pressure exerted by the reactionaries, allowing Spain to progress and not return to the past.”
Montero said that the Socialist Party was ready to win the elections at any moment, adding that the government would use its remaining time in power to tackle pending issues not included in the budget bill.
Following the parliamentary defeat, Sanchez left the premises without providing any comment to the press, although it was widely expected that he would soon announce a date for the next general elections.
“There will be news briefly,” said Infrastructure Minister Jose Luis Abalos, in reference to the upcoming electoral schedule. Sources within the deputy prime minister’s office, however, have cautioned that any official announcement would likely be made after the cabinet convened for its weekly meeting on Friday.
Meanwhile, the leader of the PP, Pablo Casado, said that holding new elections was “absolutely undelayable.”
“Today was a watershed moment that marks the end of Sanchez’s term heading the government,” Casado said. “The PP is ready to return to the executive and reclaim legality and concord.”
On the other opposite side of the hemicycle, Irene Montero – the main spokesperson for UP – said that the most social budget in history had been knocked down.
“Millions of people were going to see their conditions improve,” she said. “My political movement is prepared for a feminist, fraternal and democratic Spain to win the elections so we can have a solid government of progress that won’t wobble when facing the reactionaries.”
The leader of Ciudadanos, Albert Rivera, urged Sanchez to call elections immediately after calling him “part of Spain’s problem” and saying he could not continue to lead the country.
“Today, Sanchez lost and Spain won. Enough already! There’s no time to prolong the agony, it’s time to decide at the ballot box what the future Spanish government will be,” he added.
Sanchez rose to power thanks to the votes of two pro-Catalan independence parties: the Catalan European Democratic Party (PDeCat) and the Republican Left of Catalonia (ERC), whose lawmakers backed him in the successful no-confidence vote against former PM Mariano Rajoy (PP) last year but have now voted against his budget plan amid the ongoing territorial crisis surrounding the prosperous northeastern region.
Spain’s economy would be largely unaffected by a snap election even if the present government was ousted, German investment bank Berenberg said.
The centrist Ciudadanos party could veer to the right and form an alliance with the PP but it would still require the backing of the far right-wing Vox party to unseat Sanchez’s minority government, Berenberg said.
Although it was not clear what terms Vox would demand, such a coalition would likely scrap plans to hike Spain’s minimum wage, something that would be “mildly positive” for the economy, the Hamburg-based bank said.