Pedro Sánchez struggles to form a new government in Spain

HARDLY ANYONE predicted a draw in Spain’s elections, and yet the Socialists of Pedro Sánchez, the prime minister, and the opposition centre-right People’s Party (PP) ended up taking about a third of the vote each on July 23rd. But even with their preferred coalition partners, Vox for the PP and Sumar for the Socialists, both are short of a majority. So small parties, nearly all of which lost seats, now hold the key to governing Spain again, and the hunt is on for allies.

No significant party beside the PP will vote to create a government that includes, or depends on the support of, the hard-right Vox party, leaving the PP without any obvious routes to reaching a majority. That leaves Mr Sánchez and Sumar, his radical-left partner party, trying to bring five regional parties to support him as prime minister for another term. Four of these are separatist. Spain, in other words, cannot be governed without the support of those who want to break it up.

The Basque parties are the more straightforward ones to deal with. EH Bildu, a left-wing party that is the heir to the political wing of ETA, a disbanded separatist terrorist group, has already offered its support to Mr Sánchez, saying it would do so to keep the far right out of power. The Basque Nationalist Party, though committed rhetorically to independence, are a pragmatic bunch that have done well, running the region for most of the post-Franco era and winning favourable treatment for its residents. Both these parties helped Mr Sánchez after the previous election, when he also formed a minority government.

The two Catalan separatist parties are more problematic. They held an unconstitutional independence referendum in 2017. Madrid temporarily revoked Catalonia’s autonomy, and jailed some of its leaders. Others went into exile. Mr Sánchez has since pardoned nine of those leaders, and reformed the penal code to remove the crime of sedition. But the separatists think that progress on their demands has now stalled, and are trying to take advantage of their new bargaining power to restore it.

Esquerra Republicana, which currently runs the region, is the more pragmatic of the two parties. It supported Mr Sánchez’s appointment last time. Before taking a summer break, Pere Aragonès, the regional president who hails from the party, held a press conference in which he hinted at what more he might want in exchange for Esquerra’s continuing support for the prime minister.

In it, he repeatedly referred to regional finance. Catalonia owes around €71bn ($78bn) to the central government. And on the same day María Jesús Montero, the national finance minister, hinted at a reform of territorial financing. Some kind of write-off of that debt is in theory possible. The problem is that as soon as the idea was floated, other regions began clamouring for the same. A cancellation of all regional debts would cost the central government the equivalent of about a seventh of GDP, says Ángel de la Fuente of FEDEA, a think-tank. And the Catalans anyway want a bespoke deal, not a share in a national one.

In an effort to generate goodwill, Yolanda Díaz, the leader of Sumar, has floated another proposal: to allow the use of regional languages alongside Spanish in the Congress of Deputies, the lower house of parliament. They are already allowed in the Senate. Letting them into the more powerful Congress would be a recognition of Spain’s diversity. It would also annoy Spaniards of a nationalist bent. But that might be a small price to pay if it worked.

The separatists’ fundamental goals, though, remain out of reach. They are an amnesty for everyone involved in the referendum (many are still awaiting trial), and a new referendum. Both aims are shared by Esquerra and Junts, the other Catalan separatist party. But Junts is the more intractable. It is still led by Carles Puigdemont, who called the referendum in 2017 and now lives in exile in Belgium, where he serves as a member of the European Parliament.

Junts did not support Mr Sánchez when he formed his previous government. And before the elections, Mr Puigdemont said flatly that “Sánchez will not be prime minister with the votes of Junts.” Now he seems to be weighing his options (and enjoying sending cryptic and barbed tweets). Kremlinologists of the party are analysing Junts’s other leaders, who range from purist to pragmatist, wondering who has his ear, and hence whether a deal may be possible. Another referendum is not on the cards (Spain’s constitutional court would again forbid it). So the question is whether some combination of money, language, amnesty and inducements yet unnamed might get a coalition formed.

A government cobbled together in this way would be extremely unstable. Every piece of legislation would require more such horse-trading. In the last legislature, Mr Sánchez was portrayed by opponents as maniacally willing to do anything to cling to power, a charge that was exaggerated. But if he bends even further to make an alliance with so many parties that do not believe in the nation he hopes to lead, that case will be a lot easier to make. ■