Esquerra Republicana de Catalunya agreed to abstain in a confidence vote in parliament, giving Sanchez the numbers he needs to form a Socialist-led coalition, Pere Aragones, a senior party official, said Thursday. A final vote in the Spanish Parliament is expected Jan. 7.
Spain has been without a proper government since Sanchez dissolved parliament in March for the first of two elections last year.
With the parliament splintered between five major national parties and a host of smaller regional groups after a second ballot in November, Sanchez turned to Esquerra to help swing the numbers in his favour. A pact with the anti-austerity party Podemos got him closer to the line and upped the pressure on the Catalans.
The deal represents the latest attempt to get to grips with the political fragmentation that has dogged Spain since the conservative People’s Party lost its majority in 2015. Sanchez claimed his first term in 2018 by ousting the minority PP government of Mariano Rajoy following the Catalan crisis of 2017 but never managed to stitch together a stable majority.
The push by separatist groups, including Esquerra, to force Catalonia out of Spain opened a new schism between those calling for a crackdown and those wanting reconciliation. Despite striking a relatively hard line on Catalonia during the election campaign, Thursday’s deal leaves Sanchez committed to keeping Esquerra onside.
Spain’s benchmark IBEX 35 stock index fell as much as 0.8%. Spanish bonds rose as the yield on 10-year debt fell to 0.412% from 0.441% on Thursday.
As part of Thursday’s agreement, Sanchez agreed to hold talks with the Catalan regional government to address their differences.
The agreement “recognizes that this is fundamentally a political problem,” Aragones said. “It recognizes the legitimacy of all the Catalan institutions, that political channels must be opened and that the judicial and police channels must be avoided.”
Among his other priorities will be an economy that is starting to lose momentum, despite outperforming most European peers.
The prospect of a left-wing government facilitated by Catalan and Basque nationalists is a risky gambit by Sanchez — even though he says the political math left him with little option. In agreement with Podemos, he has pledged a program of tax increases for the highest earners and large companies, a higher minimum wage and tighter protection for workers, rolling back some of the labour reforms enacted in 2012 at the height of a financial crisis.
He’s likely to face more political turbulence all the same.
PP leader Pablo Casado has refused appeals to facilitate a Socialist-led government to avoid yet more elections because, in his view, Sanchez has chosen to ally with enemies of the Spanish constitution. Esquerra’s leaders have said a deal with Sanchez is the best way for now for the independence movement to advance its aims.
Sanchez says he needs the Catalans to forge the progressive government that Spanish voters endorsed in November. His Socialists held off a surge in votes for the conservative PP and the far-right Vox party to emerge best-placed to form an administration in partnership with Podemos.
As its name implies, Esquerra is committed to striving for a Catalan republic — its leader Oriol Junqueras was jailed for his part in the 2017 crisis — and the rocky path to deal with the Socialists points to the potential for more trouble ahead.
Esquerra suspended the talks last month after Europe’s top court said Junqueras should have been given legal immunity after he won a European Parliament seat in May. Spanish state lawyers have recommended that Junqueras should be allowed to carry out his role as a European lawmaker, helping to smooth the path to a final agreement.
Sanchez has said any deal would comply with the terms of the Spanish constitution, meaning there’s no room for negotiation on Esquerra’s key demand for an official referendum on independence.