Pedro Sánchez faces his first debate on the State of the Nation as president

This Tuesday began one of the rituals of democracy in Spain since 1983. The debate on the State of the Nation seeks to examine the performance of the Government and proposes a discussion of proposals for the country by the ruling party and the opposition.

The relevance and the issues to be discussed must be defined by the Executive through a text that is submitted for review by the members of the Lower House of Parliament. In this edition, number 26 of the debate, the most important thing for the President of the Spanish Government, Pedro Sánchez, was inflation, which he described as the main cause of the current economic crisis.

Due to the crisis, the pocket of the Spaniards has been affected by the high levels of inflation, which in June exceeded 10%; something that had not happened for 37 years. So Sánchez opened the debate with a speech that he sought to connect with citizens.

“I am fully aware of the daily difficulties of most people (…) I understand the anguish, frustration and also the anger of many.” expressed the president in front of the parliamentarians.

Key announcements by Pedro Sánchez

To face inflation, the chief executive announced two new taxes: the first will be applied to the extraordinary profits of energy companies during 2022 and 2023 to collect 2,000 million euros per year; the second, will also be in force for two years with the goal of raising 1,500 million euros a year and will apply to the rise in interest rates of large financial institutions.

In this way the Government intends to obtain a total of 7,000 million euros to finance social aid.

But as expected, the measures were not well received by Spanish banks: ‘Caixabank’ closed the day with losses of 8.6% and ‘Sabadell’ fell 7.4%. In addition, Sánchez’s statements also produced the massive sale in some banking actions.

This punishment of financial institutions was justified by the president stating that the banks “are benefiting from the rise in interest rates”.

Faced with this statement, José Luis Martínez, spokesman for the Spanish Banking Association (AEB), replied that “the possible rise in interest rates by the European Central Bank (ECB) does not necessarily ensure an improvement in the profitability of banks, nor is it translates into windfall profits, but rather responds to rising inflation and can lead to lower economic activity.

The other package of measures announced by Pedro Sánchez is aimed at citizens, especially young people. These aids consist of the free ‘multi-trip bonus’ on commuter trains from September to December, as well as the subsidy for students over 16 who are already on scholarships, with 100 euros per month so that they can complete their studies.

The reproaches of the main opposition party

In 2015 Pedro Sánchez attended the debate on the State of the Nation, but at that time as leader of the opposition to the Government of President Mariano Rajoy. Today, seven years later, the main opposition party to the Socialist Executive is the conservative Popular Party (PP). Its leader is Alberto Núñez Feijóo, who could not intervene in response to the president’s speech because he is not a deputy, but a senator.

Although there was no face-to-face, the presence in the Lower House of a Feijóo who was increasingly stronger after assuming the leadership of the Popular Party was important. Feijóo and the PP are hoping to do well in next year’s general election.

As usual, after the president’s speech, the spokespersons of the different parliamentary groups, from highest to lowest representation, have space for initial 30-minute interventions, plus the reply.

The PP spokeswoman in charge of confronting Pedro Sánchez was the deputy Cuca Gamarra, who maintained that the current government will leave Spain much worse off than it was before and made strong statements: “the Frankenstein government does not give more of itself, it is a failed project and exhausted.”

The deputy began her speech with a minute of silence in tribute to the assassination of a PP Councilor at the hands of the defunct terrorist group ETA in 1997. This was clearly a taunt against Sánchez for his alliance with the Basque nationalist left, Bildu.

Gamarra also based her speech on what she describes as “the greatest crisis in neighborhood policy”, reminding Sánchez of the surprising change of course in Spanish policy regarding Western Sahara. She also alluded to the internal fights in the Executive branch and warned that a divided coalition government causes “weakness as a country.”

Fractured officialism

Added to the economic crisis is the internal political mess that the government coalition has been experiencing for some time.

One of the reasons for the confrontation between United We Can -the left formation- and the Spanish Socialist Workers’ Party (PSOE) is the increase in military spending that Pedro Sánchez committed to with NATO at the end of June as a consequence of the war in Ukraine.

The increase represents around 2% of GDP, and in the midst of an inflationary environment, the criticism does not stop. However, Sánchez defends himself and argues that “those who doubt the need to intervene in the conflict in Ukraine forget that not participating in the war effort would not free us from the economic effects of the war, on the contrary, it would isolate us from the rest of the countries. “.

Meanwhile, apart from the war in Ukraine and its economic consequences, it is expected that the health and economic measures approved to alleviate the effects of Covid-19 will also be addressed in the next two days of the debate, the other great situation to which he had to do against Sánchez during the legislature.

These measures include the minimum vital income, specifically, the increase in the minimum interprofessional salary (SMI), as well as an eventual labor reform.

Other issues in the pipeline are the recovery policies after the eruption of the volcano on the island of La Palma, and the presidency of the Council of the European Union in the second half of 2023.

With EFE, Reuters and local media