View from Madrid: A golden opportunity clouded by domestic turbulence

View from Madrid: A golden opportunity clouded by domestic turbulence

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The vacuum created by Brexit could be the perfect opportunity for Spain to step up - if only it could form a government.

Throughout this summer of crisis for the EU, Spain has itself been stuck in a protracted domestic political deadlock, unable to form a government for almost a year following two inconclusive elections. The domestic context significantly limits room for maneuver at the EU summit, with the caretaking conservative government of PM Rajoy further weakened by massive corruption scandals.

Overall, Madrid is balancing two instincts: a principled pro-EU approach (with some political forces and officials perceiving a Union without the UK as an opportunity for deeper integration) and a foreign policy usually characterized by caution and the pursuit of core national interests. Madrid has for some time been pondering further integration proposals with close allies, while the mood on Brexit negotiations might be tilting towards a measured, pragmatic approach.

Pragmatic negotiations with the UK

The prospect of heightened instability after June’s referendum in the UK sent jitters across government offices in Madrid, especially in light of its ongoing but fragile economic recovery (the Spanish economy continues to register growth, while unemployment goes down).

In spite of some foreign policy differences (e.g. Gibraltar), Spain’s bilateral relations with the UK are strong, with a significant economic dimension. Complicity developed between some senior government officials somewhat compensates a lack of personal connection between their respective political leaders. The UK is among Spain’s top FDI destination, key for some of its biggest companies, and Spain is a major tourist destination for British citizens. At least a quarter of a million of Spanish work in the UK, while the number of British residents in Spain is even higher, making freedom of movement a very sensitive issue.

Government officials have taken issue with the conflicting messages on Brexit emanating from London and stress the need for clarity in the process ahead. Nonetheless, post-shock caution seems to be settling in, as officials now note the need to not prejudge the outcome of the negotiations ahead.

These factors - as well as a foreign policy with a penchant for caution, pursuit of core national interests and consensus-brokering - may push Spain away from a hardline position during Brexit negotiations. There are some caveats, however. The vast majority of political forces in Parliament loathed the concessions made to David Cameron’s government at February’s European Council, then grudgingly accepted for raisons of force majeure.  Politicians in Madrid will now be even less inclined to accept further significant concessions on key EU tenets such as freedom of movement.

…but deeper integration too

Spaniards stood out among Europeans in terms of their support for Remain. Yet many in Spain, a traditionally Europhile country, also see Brexit as an “opportunity in crisis” moment. Although Rajoy’s caretaking government had sympathy for some British initiatives on reform and supported London’s free trade stance, the UK has always been perceived in Madrid as a constant slacker or even a blocker of political and security integration (e.g. CSDP). Hence Spanish stakeholders, though worried about the EU, contend that the new period should be used as an opportunity to deepen political integration, not for halting it. The rise of Europhobic forces across the board, in this view, should not be a stumbling block, but a building block towards reforming and deepening the EU. Whether Spain’s official euro-rhetoric can actually go to such great lengths, dwarfing national interests, is another story, though, especially in a more fragmented political landscape.

Bratislava Summit

Madrid remains in principle inclined towards deeper integration (e.g. economic governance, CSDP, Energy Union, etc), though. The Bratislava Summit is seen as the beginning of a comprehensive process of reflection on issues such as migration or the single market, but not as a pivotal summit.

Yet Rajoy’s candidacy for a new Prime Minister job has been strongly rebuffed by the new Parliament, which, like the previous, short-lived one, has consistently shown its willingness to exercise its checks and balances over the executive – having forced an about-turn of the Government’s initial refugee policy earlier this year. Nonetheless, EU matters are an area that, though contested, still elicits cross-party support in Spain (Podemos perhaps being the outcast, generally toeing sovereigntist positions). Moreover, as negotiations on the EU-Turkey refugee deal showed, a hung but more demanding Parliament can also benefit Spain’s foreign policy legitimacy-  and clout in European negotiations.

Spain’s deadlock: squandering leadership opportunities in Europe?

The paradox of the present moment is significant. Brexit could help propel Spain – now that it has turned the corner of recession and market mistrust - back into the core of Europe. An ‘EU4’ of Spain alongside France, Italy and Germany is cherished in Madrid.

Spain has yet to produce the toxic anti-European political forces that are smothering EU founding members, leaving it well placed to make a major contribution to the project of saving and revamping Europe. So this could be a golden opportunity that could breath new life into Spain’s struggling foreign and security policy.

At the moment, however, Spain remains preoccupied with its domestic political crisis, Catalonia, etc. It faces the daunting spectre of a third election in less than a year and risks drifting towards atrophy instead of the much hoped for catharsis and the notion of Spanish regeneration, backed by civil society. Moreover, this domestic atrophy is spreading to multilateral institutions Spain plays an active part in, such as NATO, given a stringent Law of Government that ties down caretaking governments. The European project has generally been invigorating for Spanish democracy, but, unless it gets its own house in order, Madrid will be in no position to contribute to stemming the tide of fragmentation across the EU.

Read more on: View from the Capitals,European Power

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