Who has the real power in Spain?

Besides other peculiarities, Spain’s crony capitalism features a constant interference between business and politics, between parliamentary politics and the sort of corporations that are heavily dependant on government contracts and, therefore, on decisions taken by the political parties. They are the sort of private concerns whose profits are pocketed by shareholders, whilst any losses are covered with taxpayer’s funds.

As both power structures are intimately entwined, it is often hard to tell them apart, since most large corporations in Spain are not subjected only to market forces, but also to the political regulations of that market. The political parties, in turn, thrive on handouts from regulated companies in a wicked form of Catch-22 most clearly exemplified by revolving door politics. All reliable studies have shown that the core business of at least twenty-three companies listed on Spain’s IBEX-35 index hangs strongly on the public sector and its decisions.

This process began with the idiosyncratic way in which Spain’s top state-owned companies —set up during the Franco regime— were privatised. By the end of the 1990s, they had all fallen under the influence of Spain’s two main political parties, the PP and the PSOE. For years these firms agreed to play a subsidiary role with regard to the Spanish government, but once the bipartisan system began to show some cracks, the IBEX corporations felt strong enough to attempt a direct assault on the political system, too. This prompted them to create an array of Frankenstein-like political parties which in principle were meant to end the system’s major legitimacy crisis, but in practice they muddled up the situation even further. The best example of that is the recent Ciudadanos shambles, which will only get worse in the coming days.

When Catalonia’s independence bid first raised its head in 2010-12, closely followed by the 15-M Indignados movement (2011), the Spanish political system suddenly lost its footing because —for the first time ever— the post-Franco system as a whole was being put into question. The stability —actually, the tight social control— provided by the two dynastic parties, with the odd support from CiU and the PNB when needed, was being called into question. This occurred just as the Spanish monarchy —the regime’s central nervous system— was going through its worst crisis in the aftermath of the Nóos scandal, which peaked after 2012.

Around the same time, the two main media groups in Spain, Atresmedia and Mediaset, were growing stronger. In 2018 they accounted for 83 per cent of the tv business in Spain and their joint share of the private tv advertising market stood at 95 per cent. That makes Atresmedia and Mediaset two behemoths in terms of their communication power. Evidence of that is the fact that repeated complaints from regulatory agencies have never been heeded by the successive Spanish administrations. If anything, the latter have increased their dependency on the duopoly by granting the networks’ every request to secure their support at critical times.

Yet just as Atresmedia and Mediaset turned into mighty media giants, they also became instruments that shape the views of the public and of Spain’s political leadership. And they have learnt to take part in operations to alter them, both from politics and business.

A case in point is Antena 3’s purchase, in the summer of 2012, of La Sexta, a tv network with a progressive reputation. Antena 3 —a conservative broadcaster— had thus created the conditions for the right’s media group to catapult Podemos leader Pablo Iglesias into fame. It should be emphasised —as it is highly suspicious— that at the time Spain’s Competition Committee [a government watchdog] strongly opposed the acquisition, but then-PM Mariano Rajoy and VP Soraya Sáenz went to great lengths to ensure that the purchase would go through.

Pablo Iglesias first became known in 2013, when he was a guest on Intereconomía’s political chat shows —this has now been forgotten— and from this [far-right Spanish tv station] he moved on to La Sexta, which made him famous. That’s when Pablo Iglesias’ face became a permanent fixture on the network, especially on its La Sexta Noche evening show. Iglesias was promoted to such an extent that his current complaints about media bias might seem cynical, even if they are justified. The endless rows with the fascist journalists that he was pitted against established him as the Spanish left’s unquestionable media leader; so much so that Atresmedia’s competitor, Mediaset, counterattacked by hiring Iglesias to join their discussion panels on Las Mañanas de Cuatro [their daytime tv show]. After this, Iglesias’ presence on Spanish tv became pervasive and, with great skill, he started to take advantage of that politically.

In fact, the announcement that he intended to run in the European elections was made by Iglesias himself on a Cuatro political chat show. He stated that he intended “to kick out the PP and the PSOE” and went on to slam the socialist party with unprecedented harshness, clearly aiming to erode their support base. Indeed, in 2014 Pablo Iglesias stood as the European candidate of Podemos, a freshly-minted party that went on to win five seats taking nearly everyone by surprise.

In the wake of the European vote, Podemos was polling at 15 per cent in the Spanish elections according to the CIS, Spain’s government pollster. When another CIS poll predicted that Podemos would grab 23 per cent of the vote, beating the PSOE but with a chance of forming a coalition government with the socialists, Spain’s IBEX corporations went into panic mode. Obviously, Podemos and the IBEX-35 are two different kettle of fish. But without the media support from big business and, specifically, without the tv duopoly that hangs on it —directly or otherwise— Pablo Iglesias would have never got so far so quickly, threatening the political stability which is ultimately what crony capitalism is truly concerned about.

Therefore, the fear of the monster they had themselves created triggered their counterattack: they pulled the plug on Iglesias’ permanent presence on tv whilst they fashioned a new monster. There are plenty of reasons to believe that big business had hoped Podemos would wear down the PSOE thus allowing the PP —bogged down by corruption scandals— to govern more placidly. This suited Podemos. But much to their horror, the masterminds of the move eventually realised that Podemos’ policies and their vague ideas about “new vs old politics” got traction with the general public and this could jeopardise the entire regime, if they prevailed. This was further compounded by Catalonia’s independence bid and the crumbling of Spain’s monarchy, which forced King Juan Carlos to keep a low profile after abdicating the throne in June 2014.

Josep Oliu, the chief executive of the bank named after the city of Sabadell, voiced this concern at a public address on 24 June, 2014: “We need a right-wing version of Podemos. What we have now is scary”.

Let us recap the data so far, as it is important:

—In 2013 Pablo Iglesias begins to appear on tv.

—In 2014 Podemos run in the European elections (Iglesias made the announcement on tv) and they win five seats, which surprises everyone.

—Right then, only days after Juan Carlos stepped down, Josep Oliu calls for a right-wing Podemos.

—In January 2015 Podemos are polling ahead of the PSOE (CIS) and have a chance to come to power the very same year when the PP government is due call an election.

—The polls are delayed for as long as possible, until December, while the IBEX-35 strives to find a new-politics alternative party that will thwart Podemos’ rise, as they have gone too far and are now threatening to actually win the elections rather than just erode the PSOE.

At that point, given that it might have been too late to create a party that could truly compete with Podemos within what’s been called “new politics”, Ciudadanos’ name came up as a potential, off-the-cuff solution, partly because they were largely an unknown quantity in Spain. The party already had a leader and a structure in Catalonia, they had been trying to expand beyond its borders since 2014 and they could come across as a fresh party outside Catalonia. In summer of 2015, six months before the Spanish polls, Ciudadanos leader Albert Rivera announced that he would not run again in a Catalan ballot. Ciudadanos became the party that the tv duopoly sought to promote, and they were joined by the rest of the Spanish mass media powers, sometimes in a manner so pathetic that it was laughable, as was the case of [Madrid-based daily] El País.

Initially the move proves successful and following the December 2015 elections the PSOE and Ciudadanos sign a government agreement which is blessed by the IBEX-35 on every possible news outlet. In February 2016, the agreement becomes a reality, thus averting the risk of a potential Bolivarian-style government by the PSOE and Podemos. Ciudadanos will keep the socialist party in check. However, Podemos opposes the move, which triggers a snap election.

The Mariano Rajoy’s PP does better in the June 2016 vote, unlike his opponents Pedro Sánchez and Albert Rivera. Nevertheless, Ciudadanos still manages to garner enough of the new voters to prevent Podemos’ leader Pablo Iglesias from becoming the next Spanish prime minister. Rajoy is seen as a reasonable solution and he receives Ciudadanos’ support for a continuity government, although he loses any credit owing to graft cases and his poor handling of the Catalan crisis. All that prompts a vote of no-confidence in 2018, the first one ever in Spain. Catalonia’s pro-independence parties make a strategic error by lending Pedro Sánchez their parliamentary support for free, which means the socialist leader becomes Spain’s new prime minister, a position which he will quickly use to consolidate his power and achieve a truly superb result in the polls held in April this year. Given their number of seats in parliament, a coalition government between the PSOE and Ciudadanos was a possibility. This had already been attempted three years earlier and this time it might guarantee four relatively calm years for the IBEX-35 and the European Commission, which was becoming increasingly restless over the situation in Spain. That day I wrote that “in the next few weeks the PSOE and Ciudadanos will come under tremendous pressure to reach an agreement. It is the government that the IBEX-35 and the European Commission had dreamt of”. But I added that “the trouble is that such a U-turn is very hard to justify, as Sánchez himself saw yesterday when the PSOE’s rank-and-file were shouting against a hypothetical pact with Ciudadanos”.

Still, after the three-election cycle, everyone assumed that Ciudadanos would agree to a government pact. But they couldn’t be more wrong. Perhaps his backers didn’t know him well enough, but Albert Rivera —who sits on the most extreme far right by nature— believes he can come to an agreement with the PP and Vox and he chooses not to make a deal with the PSOE. In Spain the powers-that-be become so annoyed with the lad they had appointed to be in charge that they trigger the recent string of resignations within Ciudadanos, amid much pressure, internal rifts and shady moves. If Rivera opposes a pact with the PSOE, Rivera will die (metaphorically speaking, of course). For six years now, the IBEX-35 have been striving to find a formula that will bring political stability to Spain so that it will be business as usual for them, with their lucrative contracts that depend so much on having a stable government budget. Now that this is within their reach, a fragile, rogue leader whom they could easily dispose of by leaking a single video certainly isn’t going to get in their way.

Careful, though. These people have already shown that they are incapable of reconciling their wishes and the PowerPoint presentations of their spin doctors with real politics. And that has got them thinking (they aren’t stupid). At the end of the day, in the last few years they have basically propped up two monsters, one after the other. Iglesias and Rivera are unstable, whimsical characters who have erected and ruined their own projects largely because of their huge ego. Instability today is greater than ever. So now that Spain’s new political ventures have been called into question and discredited —and with the PP out of the game due to corruption scandals and its association with far-right party Vox— big business can clearly see that, once again, the PSOE is and will remain Spain’s main political pillar. Like in the 1980s. After so many failures, they must be thinking that you’re better off with the devil you know. Precisely in this context it is literally inconceivable for Catalonia’s secessionist parties —or at least for one of them— to even contemplate propping up Sánchez and allowing him to govern. You see, Pedro Sánchez is the regime’s very last trump card.