Spanish PM survives budget test but corruption scandals linger

Spanish prime minister Mariano Rajoy has survived his first major test as leader of a minority government by narrowly overcoming an opposition challenge to his administration's 2017 budget. However, corruption scandals affecting the governing party threatened to overshadow the economic debate, with calls for Mr Rajoy to face a no-confidence vote in the coming weeks.

Opposition parties presented a series of amendments to the budget that could have rendered the Bill virtually void and dealt a major blow to Mr Rajoy's conservative Popular Party. In a highly fragmented Congress, Thursday's budget vote was the tightest of Spain's modern era, with supporters and opponents of the amendments tying on 175 votes each.

With that result confirmed in two subsequent re-runs, the amendments were rejected and the budget’s approval is now expected, although the government will need to secure one more vote.

“The message we are giving to Spaniards is that this government is able to reach agreements,” said finance minister Cristóbal Montoro.

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Having governed with a large majority in his first term, Mr Rajoy has been leading a minority administration since October, with only 137 seats in the 350-seat Congress. He survived Thursday’s vote thanks to the support of liberal party Ciudadanos and the Basque Nationalist Party.

The Basque Nationalist Party’s backing was secured following the government’s agreement to grant the Basque Country a €1.4 billion tax rebate, as well as a commitment to a high-speed rail link in the region.

The Socialists and the leftists of Podemos opposed the budget in Thursday’s vote, along with other left-wing parties, pro-independence Basques and Catalan nationalists.

Ciudadanos leader Albert Rivera said that the budget's safe passage was proof that "you can be in opposition and yet allow the country to function".

Economic growth

Mr Rajoy, meanwhile, highlighted the objectives of “economic growth and job creation” in a budget bill that anticipates economic growth of 2.7 per cent this year.

But the arrest last month of several people linked to the Popular Party for allegedly embezzling money from a public water company in Madrid has distracted attention from the economy. Among those being held is Ignacio González, a former regional premier of Madrid, and both justice minister Rafael Catalá and anti-corruption tsar Manuel Moix have been forced to deny that they attempted to protect him.

This is the latest in a series of scandals that have tainted the governing party.

“We shouldn’t be talking about the budget as if nothing else has happened,” said Joan Baldoví, of the leftist Compromís party, during the debate.

“Here they have tried to violate the rule of law and to manipulate the attorneys in corruption cases that affect the Popular Party.”

Mr Baldoví voiced his support for a no-confidence motion against the prime minister that Podemos proposed last week.

The initiative, which Podemos wants to present later this month, currently appears unlikely to prosper, with none of the other main opposition parties backing it. However, with the Socialist Party due to choose a new leader on May 21st, that could feasibly change.