Spain Revolts on Socialist Government

Spain Revolts on Socialist Government

Spain’s Parliament has rejected a 2019 budget proposal, marking a major blow to Prime Minister Pedro Sanchez and raising the prospect of a potential snap general election.

A host of minority regional parties, including the Catalans, refused to support the crucial piece of legislation and voted against the proposal put forward by the socialist-led cabinet of Sanchez. The prime minister had earlier put his political future at stake, promising that if the 2019 budget is not adopted, he would call a snap election in mid-April.

Sanchez’s Socialists, who hold 84 of the 350 seats in the parliament, heavily relied on the support of Basque and Catalan parties during the budget vote, as they did when seizing power from the conservative People’s Party in a confidence vote last year.

But Catalan nationalists were unhappy with the government being reluctant to discuss the issue of independence for their wealthy region, voting against the budget bill.

Overall, 191 lawmakers voted against the budget and 158 voted in favor, with one MP abstaining.

The snap election date is yet to be set, although government officials say mid-April is the most likely option, according to Reuters.

Election aside, concerted effort to find a political solution to the Catalan crisis has been deepened by the start of the trial of 12 Catalan pro-independence leaders in Madrid. The charges against them vary from misuse of public funds to sedition and rebellion, and may result in up to 25 months in jail. The indictment is based on the 1975 Spanish constitution, which was adopted following the death of dictator Francisco Franco, and forbids any part of the country from seceding.

Catalonia, Spain’s autonomous region with a long history of pro-independence sentiment, attempted to declare independence back in October 2017. Over 40 percent of Catalans turned out for the referendum and voted in a landslide in favor of independence, which Madrid refused to recognize and attempted to quash the bid through police action.

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S. Jack Heffernan Ph.D. Funds Manager at HEFFX holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reach a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services.