All Eyes on Madrid

on 26.07.2023

On July 23rd, the Spaniards voted in snap general elections. The international community closely observed the voting, not only because the far-right party Vox had a real chance to form a governing coalition but also because Madrid holds the presidency of the Council of the European Union. Any revolutionary changes in the federal government could have seriously affected the country's ability to manage its EU presidency effectively.

In the end, the bad weather scenario did not materialise. The Vox party did much worse than predicted, and its presence in the Spanish Parliament has decreased from 15% in 2019 to 12%. As a result, the party is unable to meet the parliamentary threshold to present, for example, no-confidence motions.

It does not mean that forming a new government will be easy. The negotiations that have started this week will last at least a few more weeks, and some unmoveable pieces will have to drift. The first deadline is August 17th, when the first voting on the new government will take place in the lower House of the Spanish Parliament.

As the results of the elections were not conclusive, four scenarios are in play:

First, unlikely, is a grand coalition – where the Spanish Socialist Workers' Party (PSOE) led by Pedro Sánchez and the People's Party (PP) overcome fundamental differences and create a stable government. It's unlikely, as the country does not have a tradition of forming big coalitions.

Second, less unlikely, is that the People's Party (PP), which came first in the elections, forms a minority government or creates a coalition with Vox. This scenario is challenging to materialise as the PP and Vox would be a whopping 40 seats short of a majority. On the other hand, adding another one or two smaller right-wing parties is difficult due to their divergent priorities. This coalition deal is extremely difficult but not impossible.

Third, more likely, is that Socialists supported by the left-wing coalition Sumar and regional parties from Catalonia and the Basque region form a coalition. Pedro Sánchez remains in charge and comes out even stronger from its gamble to call snap elections. One difficulty is the demands from the separatist regional parties. For example, the Catalan secessionists want guarantees on the organisation of the referendum on Catalonia's independence from Spain. Even though PSOE has proved to be tolerant and Sánchez's strategy of cooling off the Catalan conflict worked, this demand is a red line for future negotiations on a joint coalition.

Finally, new elections are likely and looming. Spanish political forces, consumed by negotiations over the summer, do not form any consensus. Hence new elections in the middle of the EU presidency and the war on EU's Eastern doors, which nobody wants, are called.

What does it mean for Central Europe?

Similar scenarios of inconclusive elections may happen soon in Slovakia or Poland. The general elections are scheduled there in the fall, on September 30th and in October/November, respectively. Even though both countries will not have to manage an electoral campaign while simultaneously holding the EU presidency (the Polish Presidency is scheduled for 2025 and Slovakia for 2030), it doesn't mean the political forces will have it easier to form a sustainable government.

Quite the opposite, similar to Spain, the political scene is fragmented, and extremist parties are on the offensive both in Warsaw and Bratislava. What is even worse, Central European economies on the Danube and Vistula rivers, which are vital for voters, are in a worse state than in Madrid. For example, Spain's GDP grew by 5.5% last year, as opposed to 1.9% in Slovakia, with Poland experiencing similar growth to Spain, with an increase of 5.1%. Yet, the projections are much more positive for Spain than for Poland. Inflation is lower in Spain (2.9% in May 2023) than in Central Europe (12.3% in Slovakia and 12.5% in Poland in May 2023). This might add some shadows of grey in the already fragmented political environment.

The good news for Central Europe is that regardless of what kind of government is formed in Spain, the Spanish foreign policy priorities for Ukraine and Russia will remain intact. Madrid will sustain its military and humanitarian support for Ukraine and its policy towards Russia.

A relief for the Spanish EU presidency

Finally, the Spanish presidency of the Council of the European Union is not threatened. The fears that the snap elections campaigning, with a shift of focus of the Spanish administration and possible post-election difficulties, would disturb the EU presidency agenda and priorities, for the most part, were not materialised. The EU is less than one year from the new European Parliament elections, and the current European Commission is ending its term. With the upcoming EU presidency of Hungary in next year's pivotal moment, Europeans have been sensitive to the possibility of disruptions. Luckily, both candidates for the Prime Minister's office from PP and PSOE value and respect Madrid's obligation towards the EU and its member states. While Spain may need to rely more on effective coordination with the EU institutions and presidencies trio, its administration, given five past EU presidencies (1989, 1995, 2002, and 2010), has already experienced and has never failed.

* Funded by the European Union. Views and opinions expressed are however those of the author(s) only and do not necessarily reflect those of the European Union or EACEA. Neither the European Union nor the granting authority can be held responsible for them.



Associate Fellow, Centre for Global Europe



Associate Fellow, Centre for Global Europe