Ángel Collado
The commitment to increase defence spending, with figures and dates, that Pedro Sánchez had to accept at the NATO summit has opened another crack in the social-communist coalition government and will force the head of the Executive to rely on the Popular Party to move forward with investments in military equipment.
The classic social democratic, European and Atlantist position adopted by the socialist leader for the meeting held last week in Madrid clashes with the interests of his partners and allies that keep him in power, the entire extreme left and pro-independence groups.
The PP recognises the urgency of this budgetary effort, but at the same time conditions its possible support for economic reforms based on cutting ‘inefficient public spending‘, which clashes with Sanchez’s project that gives stability to the cabinet.
The exit of the chief of the Executive in the face of the apparent contradiction of looking good with Joe Biden, NATO and the European social democrats and governing with populists and separatists is once again in the so-called “variable geometry” that has given him so much play since he took over the government in 2018 hand in hand with these same partners. From its meagre parliamentary representation, 120 seats in a Congress of 350 members, it agrees its most radical and ideological projects with the extremists on the left and leans on the right when a matter of state makes it essential.
On the question of increasing military spending, the head of the Executive is beginning to try the same procedure of counting on the Popular Party, without bothering with prior consultations. The parties of the communist sector of the cabinet refuse to support any effort in Defence that is reflected in the General State Budget. As a preliminary step, the government’s plan is to bring forward, but by decree, investments in military equipment to the tune of 1 billion euros.
Sánchez knows that his partners are reluctant and will even fight his initiative, but he takes it for granted that the opposition will not dare to stop the decree in Congress. Last June, the president of the PP, Alberto Núñez Feijóo, submitted a series of proposals on state issues to the president of the government, including the idea of setting up a special fund of 3 billion euros for defence. The idea included the warning that the investment should be made from “inefficient public spending”. It required the Independent Authority for Fiscal Responsibility to identify targets for such savings.
The social-communist government is the most expensive ever known to Spanish democracy. It has more ministries than ever (up to 22), with portfolios that were only secretaries of state, and even directorates general, in previous cabinets. It is also breaking all-time records in hiring advisers and investment in advertising. For the PP, this is the best indication of a way of governing based on multiplying public spending without taking into account the accumulated deficit. It is the economic brand of Sanchismo, according to the opposition.
So far, with another economic crisis looming due to the war in Ukraine, Sánchez promises to raise every budget item or subsidy demand without looking at where to cut or explaining where the funds will come from. The most paradigmatic case that has arisen with the rise in inflation is that of pensions. Updating them, as the government assumes it will do, with a CPI of 7 per cent at the end of the year, would cost some 17 billion euros.
In the case of defence spending, the budgetary effort is much greater in percentage terms. Spain only spends 1 per cent of its Gross Domestic Product on defence, and after dragging his feet for four years, the head of the Spanish government has had to commit to doubling this percentage by 2029. He has not explained how he will do so.
In the stability plan submitted to Brussels, in order to balance the books and give credibility to his budgets, he limited defence spending to 1.2 per cent of GDP by 2025. And doubling investment in armaments in six years would cost around 12 billion euros.
To help Sánchez fulfil his commitment, which is still Spain’s commitment at the NATO summit held in Wales in 2014, the PP is calling for a state pact on the matter, which it considers essential beyond the 1 billion euros that the government now aspires to put on the table.
It is an agreement that would give medium-term stability to defence budgets, but which requires general economic reforms (austerity and cuts in the political and bureaucratic apparatus of the state) that Sánchez and his partners reject outright. It remains to be seen whether Feijóo will lend free support to the president of the government to save his announcement to invest more in defence or whether he will stand his ground to avoid aggravating the problem of a runaway public deficit.
