|   Insights & Views


  |   Insights & Views


The four challenges faced by Spain's new government

The President of the Spanish Government, Pedro Sánchez, makes a statement at La Moncloa to detail the composition and priorities of the new Executive. Pool Moncloa/José Manuel Álvarez. La Moncloa, Madrid, CC BY

Pedro Sánchez’ investiture marks the beginning of the third consecutive parliamentary term led by the Spanish Socialist Workers’ Party (PSOE). After a fraught period of negotiations, Sánchez now leads a broad coalition government along with seven other parties.

The new government faces enormous challenges, not least the fallout from the controversial Amnesty Law pardoning hundreds of Catalan separatists which has been dominating headlines. This will continue to shape public discourse over the coming months and determine the continuity of the government.

Turning weakness into strength

The PSOE has formed a coalition government by making agreements with a raft of other parties: the left-wing party Sumar, Catalan separatist parties ERC and Junts, the Basque Nationalist Party (PNV) and their left-wing rivals EH Bildu, and Coalición Canaria in the Canary Islands.

This diversity may, paradoxically, be the biggest source of strength for the new government. The coalition encompasses a number of regional parties, while both opposition parties – the right-wing People’s Party (PP) and the far-right Vox – take a hard stance against regional devolution. None of the coalition partners will want to side with them in parliament to oppose the initial budget proposals which will form the backbone of Spain’s political landscape over the coming years.

Against this tense backdrop, Pedro Sánchez’s government faces structural challenges in four key areas: territorial organisation, coexistence, foreign policy, and the digital transformation.

Territorial organisation

Catalonia is at the forefront of territorial debate, and its relation to Spain affects the nation’s coexistence and the rule of law. The constitutionality of the future amnesty law is still being questioned, as well as its potentially opportunistic passing to gain votes for Sánchez’ investiture. However, the issue goes beyond the Catalan push for independence, and covers the broader topics of national identity and the distribution of economic resources.

One example of this is taxes, as Catalonia has, in the past, attempted to wrest control of its finances away from the central government. Were the region to have its own treasury it would weaken the national tax, pensions and benefits systems, and this would undoubtedly further fuel anti-Catalan sentiment. The Basque Nationalist Party (PNV) may likewise try to leverage their support at the start of next year to demand an improvement of the region’s treatment, possibly in an attempt to squeeze out EH Bildu who seem set to conquer the Basque government.

Regional disputes are reaching other regions such as Galicia, Valencia and Andalucia, but here the question is one of financing as opposed to separatist politics. Giving favourable treatment to Catalonia will also reinforce the narratives being pushed by populists such as the PP President of the Madrid region Isabel Díaz Ayuso.

The amnesty law may well be accepted by a political majority for the sake of coexistence. However, unequal or unfair handling of different territories will open the way to political instability and fuel inequality and resentment. The progressive coalition will have to be very careful to maintain a coherent party line in this respect.


The ongoing culture war will form a crucial part of Spain’s political landscape. First on social media, then in the press and on the streets, polarisation has taken root in Spanish society, as demonstrated by the widespread protests in Madrid against the proposed amnesty law. These protests took place across the country, and drew crowds of 170,000 in Madrid. They were organised by both the PP and Vox, with the leaders of both parties addressing crowds at the demonstrations.

The opposition whipping up street protests such as these – several of which descended into riots and clashes with the police – feeds into polarisation that makes life very difficult for the PSOE and its partners.

The new government faces the daunting task of establishing coexistence based on respect for difference and the rule of law, and they will have to ensure that even handed justice is provided where necessary. This is made all the more difficult by recent events, which have included a a far-right politician being shot in Madrid and violent protests against the amnesty law outside the PSOE’s offices.

Fighting corruption and the modernising the public administration will also be on the agenda, but creating national harmony and gaining the public’s trust while passing legislation will be a delicate balancing act.

Foreign policy

Spain’s international affairs have already been in the spotlight just a few days into the government’s term. While in Israel, Sánchez made a direct plea to Israeli Prime Minister Benjamin Netanyahu for a permanent ceasefire in Gaza. He also said the number of Palestinians killed was “truly unbearable”, and stated Spain’s openness to recognising a Palestinian state.

Within the European Union, the government has now most likely missed its opportunity to use the rotating presidency to push directly for measures such as an agreement with Mercosur, the South American trade bloc. But there remains an opportunity for Spain, with its influence in Ibero-America, North Africa and the Mediterranean, to play a much needed role in breaking the dominant role played by France and Germany in European politics.

Spain’s foreign policy will be successful as long as its coalition partners behave predictably and it is able to consolidate its historical role as a reliable partner and ally. It has the potential to act as a friendly, intermediary power to more powerful nations.

The digital transformation

The digital transformation touches on many areas, and seems to have become something of a priority for the government, with an allocated budget of €20 billion and counting.

The overall aim of the transformation is to provide infrastructure and funding that will help businesses and public services to digitalise over the coming years. It presents a challenge not only for legal regulation, but also for industry, job creation, taxation, judiciary cooperation and external relations. The transition will affect the very way that Spain understands the state, the provision of public services and the emerging economic transformation.

An uncertain future for Spain

These challenges encompass many of the difficulties that lie in Spain’s near future. Support from the coalition government is delicate and conditional. It brings with it diversity of opinion and interests, and may well ensure that many long term needs are met across the country.

However, the opposite is also possible. Without a suitable solution to territorial issues that satisfies a social, rather than merely numerical, majority instability could send us back to the polls. If this happens, the results will, once again, be extremely unpredictable.

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