Rajoy’s labyrinth

When looking back on the first five months of Spanish Prime Minister Mariano Rajoy’s government, it’s hard to recall many striking images of the man. That’s probably because he is so studiously media-shy, giving as few press conferences as he possibly can, and leaving most major policy announcements to his number two, Soraya Sáenz de Santamaría.

But while Rajoy has been typically low-key during his opening spell in office, events have not and a couple of moments from those rollercoaster first months do stick in the mind, telling us apparently contradictory things about the man.

One is his comment to his Finnish counterpart, Jyrki Katainen, back in January, that the labour reform he was preparing was so radical it would “cost me a general strike”. Unaware that a TV camera was trained on him, the observation became public. The strike inevitably transpired.

The other came one morning in April, as Spain was being pummelled yet again by the bond markets and doubts about the ability of the country’s economy to weather the storm were increasingly rife. On leaving the Senate building, Rajoy walked straight into a pack of journalists, who thrust microphones into his face and bombarded him with questions. The prime minister froze, then turned around and walked back inside, refusing to answer a single question or even issue a message of calm, before leaving the building via another exit.

These two incidents may be just that – incidents – but they reflect both the scale of the challenge facing the conservative politician and how he is trying to handle it. Rajoy’s off-mic Brussels aside is utterly in step with his message to Spaniards: we must do whatever it takes to get out of the crisis, no matter how unpopular those measures are. But that apparently steely resolve has been undermined by a failure to communicate adequately – a failure that was perfectly encapsulated when the prime minister escaped from the waiting reporters in the Senate and legged it out of the back door.

No one would describe Rajoy as inactive since taking power. Almost every Friday, after the weekly Cabinet meeting, a new reform is unveiled: to cut the deficit, make the labour market more flexible, clean up the banking sector, or rearrange the supervision of state broadcaster RTVE. So far, the Rajoy administration has issued 20 laws via decree, an express form of legislating reserved for extraordinary circumstances. Even the opposition Socialists are not accusing the prime minister of sloth, with party leader Alfredo Pérez Rubalcaba saying recently: “Never has a government done so many things badly so fast and so differently from what it had promised. They do things they said they wouldn’t and they don’t explain the things that they are doing.”

And while Rubalcaba is hardly the most impartial of observers, there is undoubtedly an element of truth in his comment about the government’s failure to explain.

Communication has been one of this government’s glaring weaknesses, almost from the start, and not just Rajoy’s coyness when confronted by a camera. The lack of coordination between Economy Minister Luis de Guindos and Finance Minister Cristóbal Montoro has led to dangerously confusing moments, such as contradictions regarding the size of the deficit. The government’s handling of King Juan Carlos’s “Elephantgate” scandal was of less consequence but equally clumsy and typical of a failure to communicate effectively.

But there’s another, less specific, but perhaps more damaging element to this government’s faulty PR. It’s the impression the prime minister gives that he doesn’t like the reforms he’s implementing, but that he has no choice but to implement them – therefore confirming the suspicion in many Spaniards’ minds that Brussels (or Berlin) is really governing. Rajoy seems only too willing to tell us that he’s guided not by vision or inspiration, but by obligation. “Nobody likes taking the decisions we have taken,” he has said, again and again.

But now what?

Rajoy spent much of his seven-year period as leader of the opposition insisting that a government led by his Partido Popular (PP) would be equipped to stabilise the Spanish economy and generate international confidence in it. The spendthrift ways and incompetence of José Luis Rodríguez Zapatero’s Socialists, he suggested, had encouraged the markets to pummel the country.

But Spanish bonds have continued to soar in recent weeks, even beyond the levels they reached under Zapatero. And Rajoy’s attempts to quell the panic through a seemingly never-ending barrage of reforms have failed. Not only has this thrown the spotlight on Spain as a candidate for an EU bailout, it has also sown in the mind of Spaniards the notion that, after 20 weeks in office, the new government is running out of ideas.

According to a new poll, 62 percent of Spaniards now believe their country will need some form of bailout. That is perhaps worse for Rajoy than his own rating (61 percent disapprove of his performance so far), because it shows nearly two-thirds of people don’t believe his insistence that the Spanish economy can get through this crisis alone.

But having dug so fervently into the Merkel-sponsored tunnel of austerity, it’s hard for Rajoy to do anything other than keep digging. He feels beholden to at least try and meet the 5.3 percent of GDP deficit target the European Commission has set for 2012, even though that looks increasingly unrealistic with the release of each new piece of macroeconomic data.

Perplexed? So is he…

The failure to calm the market mayhem despite so much reform has left Rajoy bewildered, according to many media reports, which tell of him asking aides what more he can do, having worked so hard to implement the Brussels-backed program.

And yet, not everyone believes that program has gone far enough. “Everything seems to indicate that this government lacks the political courage to take the crucial steps necessary,” wrote US-based academics Michele Boldrin and Juan Francisco Rubio Ramírez in El País on May 21. For Rajoy, who is watching his government’s popularity slide while regular street demonstrations are staged against his economic policy, that must make for tough reading. Boldrin and Rubio Ramírez call for deeper banking and tax reforms (areas where this government has already legislated) as well as a major pensions reform and liberalisation of the railways, airports, postal service and other areas.

For Zapatero, slavishly following the austere diktats of Brussels was a last resort, having spent lavishly during the tail-end of the Spanish boom and then denying the reality of the bust. But although Rajoy has broken a litany of campaign promises since taking power, his current policy is more or less what we expected. The fact that it’s not working seems to surprise him as much as anyone.

Perhaps Rajoy’s trickiest conundrum is a direct result of his persistently gloomy forecasts for the Spanish economy. Having told Spaniards again and again how bad things were when in opposition, he has continued this trend on taking power, in a bid to justify unpopular measures, and to avoid comparisons with his eternally optimistic predecessor Zapatero. As a result, Spain’s prime minister is unable to peddle that currency that is so prized by most politicians and their electorates: faith in a better future. As Spain stares into the abyss, Rajoy is offering anything but hope.