Catalan Scars Exposed as Sanchez Summons Cabinet to Barcelona

(Bloomberg) -- Catalonia again takes center stage in Spanish politics on Friday as Prime Minister Pedro Sanchez’s decision to hold a cabinet meeting in Barcelona on Friday exposes the scars left by last year’s failed drive for independence.

The government will meet in a mansion dating from the 14th century in the Catalan capital amid tight security. As many as 1,300 police from Spain’s two national forces have been drafted in to help protect ministers from demonstrators, according to state broadcaster RTVE, as they take decisions including increases to the minimum wage and civil servant salaries.

“Any potential images of clashes between the protesters and police would further complicate the already difficult outlook for the government of Prime Minister Pedro Sanchez,” said Antonio Barroso, a political risk analyst at Teneo Intelligence in London.

The Catalan question is set to dominate Spanish politics next year as Sanchez prepares for a likely snap election. The premier leads a fragile minority government that is struggling to pass legislation and has bet his political future on attempts to rebuild bridges with the Catalans. His two main rivals are taking a much harder line, seeking to capitalize on the anger still simmering in the rest of the country.

Six months after Catalan separatist parties helped Sanchez take power in a no-confidence vote, they have steadfastly refused to become reliable partners willing to back his broader government program.

Coddling Rebels

At the same time, Ciudadanos and the People’s Party, his rivals to the political right, accuse him of coddling rebels who tried to break up Spain. Sanchez’s policy of dialogue with the separatists was also a factor in the emergence of Vox, a party with a more radical conservative agenda that won a clutch of seats in regional elections in Andalusia earlier this month.

Nonetheless, Sanchez can point to some progress in his policy of dialogue with Catalonia.

The separatist parties ERC and PDeCat on Thursday unexpectedly backed his deficit goals in a vote in the Spanish parliament. That came as a boost for the government even if the PP-controlled Senate looks certain to throw out the budget strategy as soon as next week.

In another positive development from Sanchez’s point of view, four separatist leaders facing trial for their part in last year’s independence push abandoned their hunger strike on Thursday. Sanchez and Catalan President Joaquim Torra also held a meeting in Barcelona on Thursday evening at which both sides acknowledged their but agreed to keep communication channels open.

Raise Tensions

Even so, Sanchez can’t count on the thaw in relations lasting into the new year as Spain braces for a trial of nine Catalan separatist leaders set to start next month. That will raise tensions that almost reached breaking point last year when the former Catalan President Carles Puigdemont made a failed attempt to illegally declare independence from Spain.

The legal drama threatens to unfold as Sanchez takes his 2019 budget to parliament next month in a gambit that requires the support of nationalist parties from Catalonia and the Basque Country. The stakes are high for Sanchez who admits he won’t be able to see out his term through 2020 if he can’t get his budget passed.

One area where Sanchez may find room to maneuver is by exploiting differences between the two main pro-independence groups, formed by followers of Puigdemont and his former deputy Oriol Junqueras, who is in jail awaiting trial. Torra, the current Catalan President, is a staunch Puigdemont loyalist, handpicked by the fugitive ex-president to replace him.

The differences between the two groups stem from the willingness of Junqueras’s ERC to talk to Madrid while Puigdemont’s PDeCat has taken a more radical stance. Junqueras supporters have also wearied of Puigdemont’s stance, given that their leader is in prison while he chooses to remain free, outside Spain.

Both leaders are still actively coordinating their parties. Given he has no access to the internet and limited use of phone, Junqueras communicates with his followers through both face-to-face meetings in prison and an steady stream of handwritten letters, couriered in and out jail by his closest collaborators.

For Puigdemont, holed up in an apartment in Belgium, communication is easier, relying mainly on Twitter and instant messaging systems such as Whatsapp and Signal. He has also given a series of conferences and interviews.

Any protests in Barcelona could hurt Sanchez by detonating any fragile detente with the separatists. Violent clashes “would further raise the cost for moderate secessionists of supporting the budget in Madrid,” said Barroso.

©2018 Bloomberg L.P.