Key Challenges

Newly active voice in
EU migration debate
After having implemented structural reforms during the past five years, and having achieved a path of solid economic growth, the Spanish government indicated that it wanted to make its voice heard at the EU level. Here, it was taking advantage of the pro-European stance of Spanish public opinion, along with the leadership gap left by Brexit and the euroskeptic governments in Italy and Poland. Prime Minister Sánchez participated proactively in the migration debate, and supported French President Macron’s plan to strengthen the euro zone.
Government’s weak position limits options
Although the new socialist government seems to have very limited maneuvering room for policy reforms due to its parliamentary weakness, its initial measures and declared priorities all highlighted the main challenges at the domestic level.
Annual tax revenues
to be increased
On the fiscal front, the gap between new policy measures and tax receipts will oblige Spain to collect more revenues. The new government confirmed that it would increase annual tax collections from 38% to 42% of GDP; however, the tax system also needs to increase its efficiency and reduce the incidence of tax evasion.
Greater focus on innovation, education
In order to improve the economy’s competitiveness, the government must place greater emphasis on innovation and education. Although the unemployment and youth-unemployment rates have declined somewhat, the government must develop and implement job-creation policies.
Risk of rising
social tensions
Maintaining social cohesion has itself become a critical challenge. There is a near-term risk that spending cuts in education, inclusion and family policies may increase social tensions. The government has recognized the need to act in the social field, but budgetary constraints limit the scope afforded to active policymaking. The most visible challenge to the welfare system is the aging of the population, along with the pressure this is already exerting on the sustainability of the health care system and the viability of the pension system. Most social policies fall under the responsibilities of the autonomous regions. In this sense, the funding system for regional competences needs to be reformed so that the subnational governments have sufficient resources to address their responsibilities.
Energy transition
is critical
Spain’s geographical location strongly exposes it to global challenges such as desertification and climate change. The recently created Ministry for the Ecological Transition aims to lead an energy transition towards more ecologically sound means of production.
Forming alliances necessary, but difficult
Regarding political stability, the single-party minority government will require allies for most legislative initiatives. This means the PSOE must strike compromises with other parties in the parliament on most issues. In today’s polarized political climate, this will be a significant challenge. Moreover the situation in Catalonia endangers political stability. Although there have been signs of a better understanding, political positions remain very distant.

Party Polarization

Traditional patterns
replaced by
Traditionally, Spain’s national party system has been dominated by the simple competition between the social-democratic Spanish Socialist Workers Party (PSOE) and the conservative People’s Party (PP). The bipolar left-right competition led to a majoritarian and confrontational style of democracy, but as major parties tended to win an absolute parliamentary majority after each national election, polarization was no more than a minor obstacle with regard to policymaking. However, a number of factors including economic crisis, several corruption scandals and the prevailing lack of popular trust in the two mainstream traditional parties have produced a newly fragmented and even more polarized party system. At the same time, the conflict in Catalonia has exacerbated polarization within Catalonia and in the entire country to a very great extent.
Deeper divide between
left and right
Since 2014, the leftist Podemos party and the liberal Ciudadanos have entered the national arena, the moderate nationalist Catalan forces have collapsed, and an emergent far-right party, Vox, gained popularity during the course of 2018. There are currently five political parties polling 10 percent or more in Spain, while the strong divide between left and right has made it quite difficult to form governments and obtain parliamentary majorities.
Cross-party agreement difficult
The wider choice of political alternatives is a healthy change, but has come at the cost of a loss of reformist momentum. Moreover, it has proved to be a significant obstacle to cross-party agreement in policymaking. According to recent studies, the increasing political polarization not only affects political conflict and the electoral arena, but may constitute a fundamental element in the erosion of social cohesion. (Score: 5)
Sergio Martini and Mariano Torcal (2016). “Trust across political conflicts: evidence from a survey experiment in divided societies“. Party Politics, pp. 1-14. DOI: 10.1177 / 1354068816685933

Junio 2018, La Vanguardia, “La polarización política deteriora las relaciones familiars”,
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