A resounding defeat for PM Sánchez

While the polls suggested absolute majorities for the centre-right People’s Party (PP) in the Madrid and La Rioja regions, no one expected a victory of the scale and implications as the one ultimately obtained by Alberto Núñez-Feijóo’s party in the regional and local elections last Sunday. The ruling socialists (PSOE) will only retain three regional governments: Castilla La Mancha, Navarra, and Asturias. The PP managed to win landslide absolute majorities in Madrid and La Rioja and will take over the regional administrations of other key regions, including Valencia, Extremadura, Baleares, Aragón, and Cantabria. The PP also swept in the city of Madrid and will govern in all major cities save for Barcelona. It was, as many analysts have described it, a political tsunami.

While in the total number of votes, the PSOE has ‘only’ lost 400,000, it was the spectacular recovery of the PP that has led to a complete reshuffling of territorial power in Spain. It must be noted, however, that the formation of many local and regional governments will depend on either a coalition with or outside support from far-right Vox, by all means, an uncomfortable ally for Feijóo – who is offering the Spanish electorate ‘moderation’ and has attacked the Socialists for their own alliances with far-left Podemos and nationalist parties. 

A snap election

Prime Minister Sánchez surprised by calling a snap general election for 23 July. The official line – the need to clarify the will of Spaniards given a defeat for which Sánchez took “first-hand responsibility”. Yet many see in Sánchez’s move a way to deactivate opponents within the party by ‘forcing’ them to campaign for him. Moreover, given the electoral tendencies crystallized last Sunday, six months in government would likely lead to further political erosion and growing fatigue in a government whose credibility is badly damaged.

The PSOE campaign is expected to agitate fear of the extreme right, while the PP will call for a concentration of moderate votes around PP in line with the strategy followed in last year’s regional election in Andalucía. This eventually led to an unprecedented absolute majority of the PP in a region historically loyal to the Socialists.

Few doubt that the PP – barring any extreme surprise – will end up coming on top, but Feijóo will work towards surpassing the psychological barrier of 140 seats in Parliament to deliver a majority as incontestable as possible, thus allowing for the formation of a government without Vox. 

The Presidency of the Council of the EU – now what?

Amid political turmoil in Madrid, many now wonder how this will all affect the Spanish EU Presidency – the last full Presidency before the European elections in 2024, and therefore a critical window to close a myriad of legislative files. It will not be the first time that the member state holding the rotating presidency of the Council holds a general election. It could be one of the few times in recent years, however, that the Prime Minister inaugurating the Presidency on 1 July is not the same as the person handing the baton to Belgium on 31 December.

It should be noted that, even if the PP takes over from Sánchez on 23 July, the priorities of the Spanish Presidency are long-defined. The exhaustive preparatory work of the Presidency is known to take months and the day-to-day running of the Council largely relies upon civil servants given the technical weight of the discussions. Notwithstanding, one must not dismiss the potential risk of Spain – should a change in government be confirmed – shifting the political direction of discussions mid-way and thus affecting a variety of important legislative files.

One example is the Platform Worker Directive (PWD), whereby the EU is seeking to reclassify ‘gig’ workers as employees, expanding their social protection and entitlements. Within the Council, Spain is currently one of the countries pushing most strongly for a hard-line PWD, in line with the country’s own “rider law” which in 2021 led to the mass reclassification of workers in the platform economy. A PP government would foreseeably be less adamant to move towards mass reclassification at EU level, especially since the party has taken the Spanish rider law to the Constitutional Court. Moreover, considering the EPP’s strategy in the European Parliament to slow down sustainability files, Green Deal legislation could potentially be deprioritized or postponed to the Belgian Presidency in the first half of 2024. Other files named in the Spanish Presidency work programme, including Artificial Intelligence, Cyber Resilience, the Gigabit Infrastructure Act, and cooperation with Latin America would surely remain as priorities in the event of a government change.

Feijóo would not risk introducing himself to his EU counterparts as an element of disruption and disorder. A centre-right Spanish government can be expected to continue the work of Sánchez’s administration, and the risk of seeing a marked shift in Spanish priorities during the Presidency is very low.

While the PP certainly looks strong to win on 23 July, one must be cautious not to rush to conclusions. Many questions remain, including the issue of what role Vox would play – or be allowed to play – in a future Feijóo government. We are in for a heated electoral campaign and, as is widely known, 50 days in politics is a long, long time.

Pepe López-Rúa Taboada is a consultant based in Brussels. At Flint, he works in a range of sectors with a focus on energy, competition, sustainability, and transport. This blog post was written with input from Partner and MD Europe Gregor Kreuzhuber and Senior Advisor Carlos López Blanco. To find out more about how Flint can help you navigate the risks and opportunities of these developments, get in touch.