A Basque pact to save Spain’s economy

In the spring of 2009, the Basque Socialists (PSE), led by Patxi López, closed a groundbreaking governing pact in the northern region with the Popular Party (PP). It was the first time in the democratic period that the Basque Country was to be governed by non-nationalists and the deal was also remarkable in that it united Socialists with the PP, two parties that on a national level seemed locked in a tribal relationship of mutual antagonism.

At the time, many forecast a short life for the new Basque government. This was partly because of the political differences between the two parties in Madrid, but also because of the bitter reaction to the pact on the part of the PNV Basque nationalists, whom it removed from office. Outgoing regional premier Juan José Ibarretxe suggested that the new government was illegitimate, and that it would “subordinate Basque interests to those of Spain.”

How ironic, then that the biggest threat so far to López’s historic administration has come from his own Socialist Party –or rather, the PSOE national party in Madrid, to which the Basque Socialists are intrinsically linked– and a deal it has made with the PNV.

Prime Minister José Luis Rodríguez and the PNV have agreed to approve the 2011 national budget and then work together in the Spanish legislature until the following year’s general elections. The accord, which also includes the Canaries Coalition, gives Zapatero eight extra seats and the slenderest of majorities to ensure he will not face an early election triggered by congressional instability.

Spain’s complex regional political structure means that the PNV, in opposition in its own Basque region, is effectively in power at a national level. Though the Spanish Cabinet will not suddenly be filled with Basque nationalists, the party has wrung some substantial concessions out of Madrid. These include the transferral of 30 powers from the state to Basque local authorities, most immediately in areas such as employment regulation and inspection.

The result of this political spaghetti junction is that López’s historic position as a non-nationalist Basque leader, or lehendakari, is deeply undermined. He has been utterly sidelined throughout the PNV-Socialist negotiations, watching helplessly as his own region gains autonomous powers without having a hand in the process.

Antonio Basagoiti, the PP moderate who has governed the Basque Country alongside the Socialists, berated his governing partner for failing to stand up to the prime minister.

“Patxi López is a candidate to be Zapatero’s next victim,” Basagoiti said, in reference to a string of Socialist figures who have supposedly been burned by the Spanish leader. Indeed, López’s approval rating fell slightly in September, when the deal’s negotiation was an open secret, while PNV leader Iñigo Urkullu has seen his own rating rise.

If he is indeed angry about all this, the quietly-spoken and statesmanlike López has hidden it well. Zapatero’s pact with the PNV, he said, was “fundamental and indispensable […] as much for Spain as for the Basque Country.”

The nationalists, meanwhile, would seem to be driven more by a move that hands them votes in their region, rather than a concern at the state of the Spanish economy overall.

If Zapatero’s deal does, as advertised, allow him to push through the economic reforms he believes necessary to haul the country out of crisis –including a controversial pensions reform- it might be worth the pain. In the meantime, one of the most mature political partnerships in recent Spanish history has been left swaying in the wind.