The Party of Government

The PSOE fought April’s election on a platform of left-wing cooperation, with Sánchez even going so far as to embrace a coalition with Iglesias in the final days of the campaign. Yet the party made an immediate post-electoral pivot away from Unidas Podemos. The day after the poll, deputy prime minister Carmen Calvo announced that the Socialists would seek to govern alone, as a minority. The following three months of institutional deadlock — which saw coalition talks begin just days before the investiture vote — have to be seen in terms of the PSOE’s determination to impose such an arrangement.

Believing he had time on his side and that the PSOE had the least to lose from fresh elections in the fall, Sánchez’s initial tactic was to sit back and slowly force his party’s rivals — above all, the liberal to right-wing Ciudadanos — to abstain in the vote on the formation of a PSOE government. A minority administration facilitated by the abstention of Ciudadanos and Podemos, or else that of Ciudadanos and the conservative Partido Popular (PP), would open up a scenario in which Sánchez could govern via “variable alliances.” The PSOE would have had the freedom to turn to the Left and reach specific agreements with Podemos on certain social and environmental policies, while also having the option to reach out to the Right on questions of state or more fundamental economic issues.

None of this was anything new — indeed, it was reminiscent of Sánchez’s attempt to force through a centrist administration in 2016, when Spain was in the midst of an unprecedented nine-month period without a government. For all the talk of Sánchez being the possible “savior of social democracy” after his electoral victory, his political instincts are that of a social liberal. He was willing to turn to the Left when necessary, to cut off Podemos’s advance, but ultimately he is unwilling to confront the economic powers that be.

By the end of June, however, it became clear that Sánchez’s route to the center was blocked, within an increasingly polarized political field. Ciudadanos had been subject to a concerted campaign of negative editorials, front-bench resignations, and warnings from its key European ally, Emmanuel Macron, over the party’s possible expulsion from the liberal group in the European parliament. This media firestorm was especially focused on Ciudadanos’s controversial alliance with the extreme right Vox in the Madrid and Andalusian regional governments. But its true purpose was clear — to force a centrist turn in which leader Albert Rivera would close ranks behind Sánchez, as he had done in 2016.

Yet if when it first gained national prominence in 2015 Ciudadanos had been little more than a crutch for the established two-party system, the Catalan crisis in 2017 transformed its role. From this point onward, it became a serious challenger to the conservative PP’s hegemony on the Right. In particular, its general election result this April — coming just one point behind the PP’s 16.8 percent — seemed to cement its success in making a hard turn to the Right. Despite continued pressure from its corporate allies, by early July, Rivera was refusing to even meet Sánchez — making it clear he was not willing to sacrifice his party’s electoral strategy in the name of establishment continuity.

Refusing to Blink

With the route to the PSOE’s right flank blocked, Sánchez was left with only two options as the vote on his premiership neared: either reach an agreement with Podemos before September, or else call new elections in the fall. As he rejected a series of offers that fell short of a full coalition deal, Iglesias projected a sense of calm — believing that Sánchez would eventually have to move. New elections would likely hit Podemos hard, with further losses predicted. Yet by July, this prospect also looked increasingly risky for the PSOE.

This view was backed up by data from Spain’s official polling center, CIS. It points to the potential, in such an election, for mass abstention among voters disillusioned after months of deadlock — likely most affecting the left-wing vote. Even if the PSOE could eat into Podemos’s base, as polls suggested, such an election also risked handing a majority to the three right-wing parties. Such a prospect increased further with reports that the PP and Ciudadanos were considering running on a joint ticket in less populated districts (to maximize their seats) as well as for Spain’s upper house, the Senate. Since any election would take place in the wake of the verdict for the Catalan sedition trial, Iglesias and the Podemos leadership were confident the risks for Sánchez would be too great. He would not gamble his premiership by going to the country.

Yet Iglesias’s insistence on entering government and his willingness to stare down Sánchez over the threat of elections was far from universally accepted within the Unidas Podemos camp. Izquierda Unida leader Alberto Garzón was opposed to making a full coalition a red line in negotiations, believing it was not worth the risk of further electoral losses. For Garzón, the “Portuguese model” (akin to the Socialist-Communist-Left Bloc pact across the border) represented a potential alternative — reaching a programmatic agreement with the PSOE before mounting a strong defense of its contents from parliament.

For the Anticapitalista wing of Podemos, as well as for a number of former Iglesias allies like Manolo Monereo and Ramon Espinar, insisting on a coalition made little sense given the existing power balance between the parties. It could only end in frustration at failed promises and undermine Podemos’s profile as a radical, anti-establishment force. As Monereo put it: “it seems difficult to imagine that we can reach a substantive agreement for a program of government. If the Socialists were unwilling to accept a coalition when we and they were equally balanced, why would they accept it now that they have regained the advantage?”

For Iglesias, however, a coalition was essential for a number of reasons. First, Podemos was burned on a number of occasions during its year of cooperation with Sánchez’s interim government formed in June 2018. When jointly agreed proposals for rent controls or public spending increases met with pushback from elites, Sánchez’s default position was to retreat. According to Iglesias, only Podemos’s presence in cabinet could ensure a PSOE government would actually force through the raft of social policies on the table. These promised measures ranged from the repeal of neoliberal labor reforms to further increases in the minimum wage, rent controls and an anti-eviction law, new taxes on the banking and tech sector, and regulations on energy giants.

Second, once Podemos was in cabinet, the PSOE would have no choice but to seek agreements with it in all legislative areas. This would block off the prospect of “variable alliances” and Sánchez attempting to play the Right and the Left off against each other. Particularly from his own position outside cabinet, Iglesias bet that he could force further concessions from the Socialists and position Podemos as the critical conscience within the government, such as would be capable of moving it leftward.

Third, there were also party-political interests at play. In April, Podemos waged an inspired election campaign, based on the promise of a left-wing coalition; Iglesias was also the clear winner in the leaders’ debates, which helped save the party from a possible wipeout at the polls. In difficult conditions, with the agenda dominated by Catalonia and fear of the extreme right, Podemos’s forty-two seat tally represented a strong result — double the number of MPs the old Izquierda Unida (IU) had received at its height in 1996.

Going forward, however, Podemos was likely to face increased competition from Inigo Errejón’s new formation, provisionally named Más País. Errejón — Iglesias’s former deputy leader and one of the founding members of Podemos — had run against his former party in the Madrid regional elections in May — picking up 14.5 percent to Podemos’s 5.6 percent. Iglesias was also betting that a coalition agreement would maintain Podemos’s centrality on the Spanish left and give it a platform from which to see off Errejón’s challenge.

Negotiating in Bad Faith

Iglesias’ surprise move — accepting Sánchez’s veto on his presence in cabinet — finally forced the PSOE to the negotiating table (some eighty days after the elections). Podemos had already accepted a series of other vetoes laid down by the PSOE in the previous weeks. It renounced any prospect of entering the “ministries of state” (defense, interior, justice, and foreign affairs) as well as acknowledging it would have to accept Sánchez’s lead on the Catalan question. The question of self-determination for the region, which is a central plank of the party’s program, was off the table from the beginning.

Instead, Podemos sought to target portfolios with a strong social dimension and that had clear spending powers. Accepting that the PSOE was also not going to relinquish the powerful economy and development ministries, it identified the Labour Ministry and the Ministry of Environment and Ecological Transition as its priorities. It similarly targeted a narrow portfolio in the Treasury area and the position of Deputy Prime Minister for Podemos’s second in command, Irene Montero.

With the exception of the deputy premiership, ultimately the PSOE ceded ground on none of these areas. On the Labour Ministry, the response from PSOE’s chief negotiator Carmen Calvo was “you cannot have [it], you unnerve the CEOE [association of business leaders]” — something unacceptable for the PSOE (this, despite its name meaning “Socialist Workers’ Party”). Instead the PSOE made a series of offers, never on paper, mixing and matching various secondary positions, such as the Ministries of Tourism, Housing, Youth, Culture, Science and Universities, Agriculture, etc.

Sánchez was willing to accept Podemos entering cabinet in these types of roles, but he was not going to go much further. With a number of leading figures in the PSOE pushing hard for a deal, such as the Economy Minister María Jesús Montero, his final offer saw him concede the Ministry of Equality, which would have allowed Podemos to front the government’s feminist agenda. But combined with the toothless ministries of Housing and Health, this was an insulting price to pay for its forty-two MPs’ backing.

As Sánchez broke off negotiations the evening before his investiture vote, the interim premier felt reinforced in his position. In terms of optics, he could now position himself as having gone further than any Socialist leader before him, having offered the Left a formal coalition. Most importantly, the negotiations had also made public the divisions within Unidas Podemos — with IU pushing for Podemos to accept a version of Sánchez’s final offer. This might have happened had the premier made further minor concessions and allowed Podemos to save face. But he now seemed to believe he had more to gain by waiting until September and seeking a last-minute vote on his premiership then.

This calculation seemed confirmed the day after the vote, when the IU released a statement asking for Podemos to accept a programmatic deal without a coalition, rather than risk fresh elections. According to journalist Pedro Vallín, Garzón now believes IU members would refuse to back a renewed pact with Podemos if there are elections. With members of his electoral alliance in open revolt, Iglesias’s position now looks compromised, and it will be very difficult to hold out for an improved offer as the September deadline approaches. Indeed, PSOE is now ruling out any further coalition talks.

The events of the last week have not only shown Sánchez’s ruthlessness as a political leader but his unwillingness to extend even a minimum amount of respect to his interlocutors in coalition talks. Probably the most unsavory chapter came the night before the vote, when the PSOE leadership leaked a doctored version of Podemos’s initial negotiating document with its own invented title (“Podemos’s Demands to PSOE”), smearing its rival as uncompromising.

Yet it is Iglesias who has come out of the negotiations having lost the most. As Unidas Podemos attempts to regroup after the talks’ collapse, questions will have to be asked about his high-stakes strategy.