Spain's Low Defence Spending Could Become an Extra Risk for PM Sánchez
A Trump victory in the US would be a curveball for the Spanish government, which underspends on defence and has populist allies who are distrustful of NATO
"NATO OTAN Insignia" by Jetijones is licensed under CC BY 3.0.
Shockingly, Donald Trump has been the clear favourite in this year’s US elections right up to President Joe Biden’s recent decision to step aside. Trump’s lead was surprising to many observers given his psychological and legal issues, combined with his clear lack of understanding of how the West was won.
Trump - a right-wing populist - has said that European members of the North Atlantic Treaty Organization (NATO) should “pay up,” as if it were a protection racket; and has encouraged Russian dictator Vladimir Putin to invade NATO members that struggle to hit the alliance’s target of spending 2% of gross domestic product (GDP) on defence.
Meanwhile, Trump’s pick for vice-president, JD Vance, has said (not incorrectly despite coming from a deeply questionable isolationist stance) that the industrial base for defence in Europe shows “shocking weakness.” More controversially, he added:
The question each European nation needs to ask itself is this: are you prepared to defend yourself? And the question the US must ask is: if our European allies can’t even defend themselves, are they allies, or clients?
If Trump/Vance find a way into the White House, there will be serious repercussions throughout Europe. NATO is likely to survive, at least in form, but Europe will have to do much more heavy lifting. Spain, where I live, is likely to be particularly impacted, given that the government only spent 1.2% of GDP on defence in 2023. The country could easily find itself in a situation where it has to practically double its spending almost overnight to cope with a strategic pivot in Washington DC.
Despite the looming risks, the issue of defence spending is rarely discussed in Spain. At best, it is a back-burner issue for Socialist Prime Minister (PM) Pedro Sánchez, despite a reasonable chance that could it dominate headlines in November.
The Spanish left has tended to be sceptical about NATO for historical reasons. After the end of World War II, many Spaniards were quietly optimistic that the country’s dictator, Francisco Franco, would follow Adolf Hitler and Benito Mussolini into an early grave. However, it was not to be.
The US signed the Pact of Madrid with Spain in 1953, giving the Iberian country military and economic aid. The US gained the right to build and maintain air and naval bases on Spanish territory. Many opponents of Franco never forgave the US (or by extension NATO) for giving the right-wing dictator a lifeline, which kept him in power until his death in 1975 at the age of 82 (the same age that Trump would be at the end of his second term in 2028 if he wins the coming election).
After Spain’s transition to democracy, which culminated in the Constitution of 1978, there was much debate about whether or not the country should itself join the US-led defence alliance. It eventually signed up in May 1982 despite strong opposition from the centre-left Socialist Party, which won the subsequent general election in October of the same year. When Spain entered the European Union (EU) in 1986, the Socialist PM Felipe González (who had been facing intense diplomatic pressure from his allies and peers in Europe) pivoted and announced that he would support Spain’s continued membership with certain conditions.
The issue was put to a referendum in March 1986, with the Communist Party of Spain (PCE) leading the opposition. Continued membership of NATO passed, with nearly 57% voting in favour, compared to 43% voting against. The electorate of four out of 17 autonomous communities - the Basque Country, the Canary Island, Catalonia and Navarra - came out against the proposal.
Two of theses regions - the Basque Country and Catalonia - have regional languages that were discouraged by Franco; and narratives about how native speakers of these languages had been unfairly treated compared to other Spaniards during the dictatorship were gaining a head of steam at the time. The Basque language is also spoken in rural areas of Navarra. This blog has already noted the irony that these narratives were particularly popular with Catalan families that had supported Franco during the Spanish Civil War in the 1930s and done very well economically between the 1940s and the 1970s.
Fast forward to 2018. The Socialists had been in opposition for nearly seven years. Conservative PM Mariano Rajoy had stormed to victory in 2011 with a landslide victory, helped by widespread disgust at Socialist mishandling of the deep recession that followed the 2007/8 credit crunch. Rajoy had also formed a minority government after a less impressive victory in the election of 2015.
Rajoy’s centre-right Popular Party (PP) was engulfed in a number of shocking corruption scandals, which somewhat over-shadowed his government’s mostly successful attempts to get the Spanish economy going again. The overlapping scandals largely dated back to the PP’s first time in office (1996-2004), when many senior figures had quietly accepted kickbacks during an economic boom. The growth of the economy had largely been powered by cheap debt thanks to lower interest rates as the country dropped the peseta and adopted the euro.
Luis Bárcenas, a PP fixer who had become the party’s chief administrator in 1993 and its treasurer in 2008, was convicted to 33 years in jail for corruption in May 2018, while his wife was sentenced to 15 years. Sánchez, who was leader of the opposition Socialist Party, began to plot his next move soon after the conviction.
Instead of cutting a reformist deal with a liberal party who had been supporting Rajoy’s government, Sánchez rolled up his sleeves and built a loose alliance that united the centre-left with left-wing populists and regional nationalists. His subsequent no-confidence vote in Rajoy brought together a communist-led party called Together We Can (UP), as well as Catalan and Basque nationalists. Although little noticed at the time, hostility to NATO was a common theme among many of the new PM’s allies.
Since gaining power in 2018, Sánchez has managed to hold together his shaky consortium, know as a “Frankenstein alliance” in Spain, despite many ups and downs. Perhaps strangely, many of the pact’s nationalist members are on the right of the horseshoe - a point that deserves much more discussion in Spain, if not on this blog.
In November 2023, I went out on a limb and said it was now safe to describe Sánchez as a left-wing populist instead of a member of the mainstream centre-left. This view has yet to gain much traction outside Spain, but I do think it has aged well, given subsequent events, which we will discuss in the rest of this essay.
In March 2024, I went out on a limb again and said “a no-confidence vote or a snap election is more likely than not within the next 12 months or so” given how weak Sánchez’s alliance looked at the time. It is time to update readers on how that prediction is doing, before returning to defence spending at the end.
Three milestones, two risk factors, plus a new one
My essay in March identified three important milestones for Sánchez’s government plus two major risk factors. The first milestone involved regional elections in the Basque Country, which were held in April. The Basque Nationalist Party (PNV) scraped into first place, with 34.8%, with radical Basque separatist Bildu snapping at its heels (32.1%). The Socialists, which have made deals with both parties over recent years, limped into third place (14.1%) and subsequently backed a PNV government.
In my previous essay, I said that this scenario might be problematic for the Socialists. In the end, though Bildu meekly accepted it. A 2021 video from Arnaldo Otegi, the convicted terrorist who leads the radical separatist party, was much discussed after the elections. In it, he said that the party’s priority was to get 200 convicted terrorists from Basque Homeland and Liberty (ETA) out of jail; and if that meant doing deals with the Socialists, then so be it. Bildu remains firmly in the Socialist camp for now, as does the mainstream PNV, which has governed in the region since 1979, with just a short break between 2009 and 2012. The PNV had previously found common ground with the PP.
The second milestone involved the Catalan elections in May. The Socialist candidate, Salvador Illa, stormed into first place in a fragmented regional parliament with 28.0%, while Sánchez’s two nationalist allies in the region did badly. Together (Junts) got 21.6%, while the ruling Republican Left of Catalonia (ERC) floundered into third place with 13.7%. Let me quote my previous essay on this scenario, which I had flagged as a likely one:
Perhaps strangely, there are significant risks for the national Socialists party if its Catalan branch wins the regional elections while Sánchez hangs on in Madrid without calling a general election or facing a no-confidence vote. Would ERC and Junts continue to support Sánchez in Madrid if the Socialists control the contents of the pork barrel in Barcelona? I have serious doubts on this score.
Junts and ERC at first reacted to the Socialist win with extremely bad grace. However, ERC, which identifies as left wing (somewhat bizarrely), has recently found common ground with the Socialists about creating a “singular” financing system for the wealthy autonomous community. This reduces the risk of repeat elections, both in Catalonia and nationally, by a considerable margin. My essay from August 2023 which discussed the way that Sánchez’s concessions are coaxing Catalonia away from populist nationalism looks good in retrospect.
Junts, which is populist nationalist all the way down, remains a wild card. The Socialist-designed amnesty for the party’s leader Carles Puigdemont has fallen a little flat. Judges in Spain have refused to accept the validity of the law for some of the crimes the separatist leader allegedly committed while refusing to obey Spanish law. The party can bring down Sánchez in a heartbeat if there is ever a no-confidence vote.
The third major milestone for Sánchez involved the European elections in June. Voter anger at Sánchez’s amnesty and dealmaking with populists, along with a series of corruption scandals we will discuss shortly, meant the Socialists did badly. The PP came first with 34.2%, while the Socialists received 30.2%. Rather significantly, hard-right party Vox received just 9.6%. Much of Sánchez’s strategy has been based on trying to lump Vox and the PP together, so a lack of traction for populist right-wing narratives with the electorate tends to undermine this approach.
The previous essay from March also identified two serious risk factors, either of which could generate a no-confidence vote in Sánchez. The first is the so-called “Koldo case” - a judicial investigation into a series of kickback and procurement scandals involving senior Socialists and their fixers. Although the scandal continues to simmer away in the press, it has yet to reach a point where it could realistically bring the government down. Sánchez’s brother has also been caught up in his own scandal. Although the PM isn’t directly implicated, this is a terrible look for the Socialist leader.
Meanwhile, the second risk factor has turned into such a soap opera that it has even begun to attract the interest of the international press. Sánchez’s wife, Begoña Gómez, ran a masters degree at a university in Madrid; and took a number of questionable decisions, such as meeting with the owners of companies that were being bailed out by the government. She also appears under-qualified for the role. In hustling for business in her private life while also attending public events in her role as the PM’s wife, she has behaved very differently from the other partners of Spanish leaders since democracy was re-established in 1978.
I think it is absolutely fair to say that Gómez showed questionable judgement (to put it politely) and failed to maintain high personal standards. Refusing to testify in her own defence undermines Sánchez’s argument that the case against her is just a bunch of right-wing lies. He also maintained his right to silence earlier in the week when called to testify by the investigating judge. Whether or not Gómez was actually corrupt remains to be judged in court. Even so, I think that the issue could well bring down Sánchez’s government at some point, although the timing and circumstances are hard to predict.
Many of the scandals in the “Koldo case” and the Gómez affair have been broken by online newspapers, of which there are many in Spain. Sánchez’s reaction has been that of a textbook populist, accusing these websites of being a “mud-slinging machine” with links to the right (or far right), even though a surprisingly large percentage of these stories have turned out to be well-sourced and credible.
One of the more unexpected turns came in April, when Gómez was named as a formal target of a judicial enquiry, although that fact didn’t emerge until much later. Sánchez wrote a public letter to Spain’s citizens on social media and took five days to reflect on whether to continue as PM. He later wrote a second letter in June when news broke about the seriousness of the investigation into his wife.
Sánchez later proposed a populist law to regulate the media, which is working its way through the parliamentary system; and the government has also lodged a formal complaint against the judge in the case. Needless to say, most responsible politicians would have resigned when faced with a scandal quite this close to home rather than blaming those pesky news reporters (and that pesky judge).
Another risk factor has emerged recently. José Luis Rodríguez Zapatero took Spain’s Socialist Party on its first steps to populism in the modern age during his time as PM between 2004 and 2011, when his team badly mismanaged a terrible recession. Since then, Zapatero has become a strong defender of the populist and authoritarian regime in Venezuela. He was in Caracas recently as the unpopular regime made an unlikely claim to have won the recent election in murky circumstances; and, unlike other international observers, has yet to comment on the allegations of a steal.
Perhaps strangely, ongoing street protests against Venezuelan President Nicolás Maduro could carry risks for the Spanish Socialists if they gain traction, given that a number of scandals have a Venezuelan angle. The most famous example came in January 2020, when Delcy Rodríguez - Maduro’s Vice President at the time - met with a Socialist minister on board her plane in Madrid’s airport. She was banned from entering the EU at the time for undermining democracy at home.
The opposition will try to use Zapatero’s terrible judgement calls as an apologist for Maduro as a point of leverage in its battle with Sánchez’s government in the weeks and months ahead. In the meantime. the online press will continue to have fun publishing articles about the former PM’s expensive houses (he has more than one).
Feijóo’s hand
Although the PP leader, Alberto Núñez Feijóo, has yet to show any tactical nous whatsoever, he has been dealt a rather good hand. He finally agreed a deal with Sánchez to renovate the governing body of the judiciary in late June. A deal was long overdue. Although the PP is often blamed for the impasse, it is worth mentioning that its negotiating position (letting judges pick their own peers) is more in line with modern European thinking than the Socialist one, which is based on horse trading by elected officials.
Feijóo was also dealt an ace in July by a terrible strategic call by Vox. We need a little background first. A number of unaccompanied foreign minors (MENAs in Spanish) find a way to the Canary Islands and Andalucia every year, as well as Spain’s autonomous cities of Ceuta and Melilla on mainland Africa. There were a little more than 15,000 at the end of 2023, representing 0.03% of Spain’s population of 47.8m people. Male teenagers from Morocco make up the vast majority. Many of them come from troubled backgrounds. Few come with documentation.
Spain has a protocol for dealing with the MENAs. When the teenagers don’t have passports, which is usually the case, the country uses medical checks to get a rough idea of their age. They are then spread throughout the country, where they are adopted by one of the country’s 17 autonomous communities, which try and provide a route into education and employment. The circumstances are never ideal and the residencies can leave much to be desired. Although the vast majority of the MENAs just want a quiet life, a small number of delinquents receive much attention on the right. In reality, seven out of ten delinquents are Spanish natives.
The leaders of Vox, many of whom have backgrounds in neo-fascism, have a serious problem with the MENAs. The party shocked many (including me) with frankly racist posters that demonised children in 2021. Essayist HL Mencken once joked that “there is an answer that is clear, simple, and wrong” for every complex problem. Vox’s leaders and apologists often say that Spain should just send the MENAs back to their families, as if they were naughty troublemakers from solid middle-class backgrounds and impeccable paperwork. Good luck with that! The party often uses a classic trope of misinformation to contrast the total budgetary spending on MENAs (including food, lodging and education until they are 18) with pensions. One of these things is not like the other! The numbers are rarely correct anyway.
In July, the PP and the Socialists agreed a deal to spread 400 MENAs through Spain’s 17 autonomous communities. Catalonia, which is run by a caretaker government led by the allegedly left-wing ERC, refused to take any, but the other autonomous communities accepted the deal. However, Vox’s leaders threw their toys out of the pram; and announced that the party would withdraw its support from five regional governments where the PP lacks a majority in protest. In practical terms, Vox is building its own cordon sanitaire around all the major parties. This is a frankly weird decision for a party that got less than 10% of vote in European elections.
Vox’s wackiness saves the PP from its own worst strategic mistake. In February 2022, the party cut a deal with Vox to govern in Castile and Leon. This was followed by four more deals in Aragon, Extremadura, Murcia and Valencia following regional elections in May 2023. Vox was clearly not ready for prime time, as the MENA affair shows. Vox’s oddball cordon sanitaire against the PP makes the point magnificently.
The PP will be able to continue to govern in these regions without Vox, although it will be harder to pass budgets and there will always be a risk of a no-confidence vote. Ordinary voters, however, will get a certain message loud and clear: if you dislike Sánchez’s dealmaking and the bad smells coming from la Moncloa, then a vote for Vox is likely to be a wasted one. Feijóo remains ahead in the polls, more due to the circumstances discussed in this essay than any strategy of his choosing. Vox’s own supporters are worried that the party might follow in the footsteps of the liberal party that had supported Rajoy, which eventually disappeared from the national scene.
None of this is good for Sánchez, given his strategy of trying to scare centrists, moderates and floating voters with the unlikely idea that the PP and Vox are basically the same. It is worth keeping an eye on the polls to see if Feijóo ever finds himself with a strong enough lead to govern without Vox. If he gets to that point, his hand will become even stronger.
Next steps
What will happen next? It is difficult to know for sure. I am significantly less bullish on my bet that Sánchez is unlikely to survive in power until March 2025, particularly given the Socialist agreement with ERC in Catalonia. I might be wrong, but - even if I am - I would still bet against Sánchez getting all the way through to August 2027, which is the latest date for the next general election. A lot can go wrong for Sánchez over the next three years, particularly given his lack of a real majority.
The scandal involving the PM’s wife would have already taken down many a lesser politician. Rumours are swirling in Spain that Sánchez could be formally named as a subject of the investigation, which means he would have to seek the backing of his party’s ethics committee. If that happened, I would expect him to continue to counter-attack, but we would be in unprecedented territory. Meanwhile, the “Koldo case” is far from over; and Zapatero is a wild card.
The PM’s alliance is holding for now, but Junts is far from a reliable partner. Its interests rarely align with those of the Socialists. Even so, the party will find it hard to say no to a special tax deal for Catalonia in a budget for 2025 in the months ahead.
I remain unconvinced that the PNV would be a solid partner if the various scandals get worse - its defection from Rajoy’s PP in 2018 made Sánchez’s ascent to power possible. The Basque party is in it for the long term and it is easy to imagine circumstances when it might want to pivot again, particularly if Vox’s support continues to ebb. Vox is extremely unpopular in the Basque Country, where it just got 2% of the vote in the recent elections. PNV support for the PP becomes more likely as the PP grows in the polls and Vox shrinks.
If Sánchez is still in power after the summer holidays, which seems more likely than not at the moment, he will be able to have some fun negotiating a budget with his various partners. Looking after the pork barrel is where the PM feels most comfortable. It has to be said that cutting a cozy deal for Catalonia is a hard policy to sell to his other allies.
Sánchez needs the support of nationalists from the Basque Country, Galicia and the Canary Islands, who can all be prickly about special deals for other regions. Meanwhile, Valencian nationalists within Addition (Sumar), a hard left-led alliance that also includes the Communist Party and used to include UP, have publicly argued against a new financing regime for Catalonia. Sumar is a core member of Sánchez’s alliance, so this is problematic.
The Socialist presidents of two autonomous communities, Castilla-La Mancha and Aragón, have also argued against the plan in public, while at least one Socialist deputy has hinted that she might not support it in parliament. Former Socialist PM González has said that the agreement is unconstitutional and “impossible” to execute. Having said that, backbench rebellions are are rare as hen’s teeth in Spain. Elections here are based on lists of candidates - a system that rewards loyalists.
All in all, a wide agreement on Catalan financing will be hard to execute, even for a dealmaker as talented as Sánchez. It is worth stressing how little wiggle room he has after coming second in last year’s elections in July 2023. He became PM in November with just 179 votes out of 350, including Junts. In other words, he can only afford to lose one, two or three votes from his alliance on such a crucial issue. Any more and the risk of the government falling would immediately skyrocket.
As noted at the beginning of this essay, if Sanchez finds he has to suddenly double Spain’s defence budget in November, he would have a serious problem, given the anti-NATO biases of many his chosen partners. Finding tens of billions of euros for weaponry and ammunition would be challenging in the best of circumstances, let alone when you need the support of populists who struggle to understand deterrence.
Finally, the ideas in this essay suggest a new line of attack for Feijóo. He should propose spending 2% of GDP on defence as a matter of urgency if the PP gains power. This is the right thing to do, given Russian aggression in Europe, but it could also help the centre-right party politically in Spain.
Feijóo should regularly talk about the need to increase the industrial capacity for defence in the Basque Country and Catalonia to give the PNV and Junts something to think about. He should also discuss building arms and ammunition factories in Andalucia, which is one of the poorest autonomous communities of Spain and one where the PP has been in power since 2019.
In general, Feijóo should try and provoke an over-the-top hysterical reaction from both the hard left and the hard right to the idea of increased of defence spending. The hard left will be easy, for reasons discussed in this essay.
The hard right is a little bit more subtle, but in July Vox joined a new European party led by Hungarian strongman Viktor Orbán. He is an apologist for Russian dictator Vladimir Putin, who blames NATO for supposedly giving him no option other than starting a war in Ukraine. Vox has half-heartedly supported Ukraine so far, but its deal with Orbán puts the party in a frankly contradictory position. The PP should exploit this ruthlessly and provoke strategic mistakes to its right.
As part of this strategy, Feijóo should pitch the idea of building Spain’s armed forces by recruiting people from Latin American and Morocco; while giving the new recruits and their families a path to Spanish citizenship. If Vox over-reacts, as seems likely given the party’s hysteria over young men from Morocco, he should then stand back and enjoy the fireworks. Ordinary voters would get the message about which right-wing party would be able to take hard decisions in government loud and clear.
The comments are closed, as always when I discuss populists, who can be very annoying on the internet. If you subscribe, though, you can hit reply to the email. I might not get to it immediately, but I will reply to your message when I get a chance. See you next week!
Previously on Sharpen Your Axe
Narratives about Franco and Catalonia
Sánchez’s failure to cut a deal with the liberals in 2018
Nationalism is a right-wing ideology
My essay from November 2023 describing Sánchez as a populist
How long can Sánchez survive? (March 2024)
Sánchez’s strategy in Catalonia (August 2023)
Further Reading
What Is Populism? by Jan-Werner Müller
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