For members


What Spain’s new leftist government has planned for the country

Spain's new coalition government between Prime Minister Pedro Sanchez's Socialist party and hard-left Podemos wants to raise taxes for the rich, roll back a reform of labour market laws, and raise salaries.

What Spain's new leftist government has planned for the country
Pedro Sanchez, is congratulated by Spanish far-left Unidas Podemos coalition leader, Pablo Iglesias after the successful vote. Photo: AFP

The two parties argue the measures are needed to fight economic inequality but company lobby group CEOE has warned that their economic programme is “close to populism” and will have a “very negative” impact on job creation in the country, the eurozone's fourth-largest economy.

The following are some key measures proposed by Spain's new government:

Labour market reforms

The coalition has vowed to roll back some changes introduced by Spain's previous conservative government in 2012 during the height of the country's economic crisis to make the labour market more flexible by making it easier and less expensive to fire workers.   

It wants to eliminate or severely restrict the reform's more controversial measures such as the authorisation to fire workers on sick leave or unilaterally change a job contract.

Former Prime Minister Mariano Rajoy credited his labour market reform for a sharp drop in Spain's sky-high unemployment rate but critics say it has caused salaries to fall and led to a rise in unstable, temporary work.

Minimum wage hike

Sanchez's previous government rose the monthly minimum wage by 22 percent to €1,050 ($1,175).

His new coalition government wants to increase it further by the natural end of the legislature in 2024 to 60 percent of Spain's average monthly salary which currently stands at €1,970.


Pensions will once again be linked to inflation, which has not been the case since 2014.

Higher taxes

The government wants to raise income taxes on those earning more than €130,000 per year, and set a minimum corporate tax rate of 15 percent, while banks and energy firms will have to pay 18 percent.   

The goal is to prevent companies from using tax deductions and loopholes from paying far less than the current official corporate tax rate of 25 percent.

Spain's largest union, CCOO, has said the government's overall programme is “positive” but criticised a “lack of ambition” regarding taxes, recalling that Spain's tax rates are lower than the European average.

Rental market

The coalition wants to give mayors of cities struggling with “abusive” rent hikes to temporarily impose rent ceilings.

Madrid and Barcelona have in recent years seen rents skyrocket, in part due to the rise in popularity of renting homes to tourists on home-sharing platforms such as Airbnb which has decreased the number of properties available for longer-term rental.   

The proposal has sparked an outcry from the real estate sector which argues it would discourage investment in properties built with the goal of being rented out, which would worsen the housing shortage.

Debt reduction

The coalition agreement between the two parties vows to “respect the mechanisms of budget discipline” without setting a specific target for the reduction of Spain's debt, which stands at nearly 100 percent of the country's
economic output.   

Last year the European Commission chided Spain for its slow pace of debt reduction.

Problems ahead

“While the formation of a government is certainly welcome news for the Spanish economy after months of political standstill, it does not change the overall picture of an increasingly fragmented and polarised political system,” warns Ángel Talavera, Eurozone economist at Oxford Economics.

“The implementation of reforms that require ample consensus remains unlikely, leaving a lot of unfinished business at a time when the economic outlook is deteriorating. And with the Catalan independence issue permeating all aspects of Spanish politics, the governing coalition’s dependence on the support of pro- independence parties makes it very unlikely that it will be able to last a full four-year term.”


Member comments

Log in here to leave a comment.
Become a Member to leave a comment.


German Greens’ chancellor candidate Baerbock targeted by fake news

With Germany's Green party leading the polls ahead of September's general elections, the ecologists' would-be successor to Angela Merkel has become increasingly targeted by internet trolls and fake news in recent weeks.

German Greens' chancellor candidate Baerbock targeted by fake news
The Greens chancellor candidate Annalena Baerbock on April 26th. Photo: DPA

From wild claims about CO2-emitting cats and dogs to George Soros photo collages, 40-year-old Annalena Baerbock has been the subject of a dizzying array of fake news, conspiracy theories and online attacks since she was announced as the Greens’ chancellor candidate in mid-April.

The latest polls have the Greens either ahead of or level with Merkel’s ruling conservatives, as the once fringe party further establishes itself as a leading electoral force in Europe’s biggest economy.

Baerbock herself also consistently polls higher than her conservative and centre-left rivals in the race to succeed Merkel, who will leave office after 16 years this autumn.

Yet her popularity has also brought about unwanted attention and a glut of fake news stories aimed at discrediting Baerbock as she bids to become Germany’s first Green chancellor.


False claims

Among the false stories circulating about Baerbock is the bizarre claim that she wants to ban household pets in order to reduce carbon dioxide emissions.

Another fake story firmly denied by the party claimed that she defied rules on mask-wearing and social-distancing by embracing colleagues upon her nomination earlier this month.

Baerbock has also been presented as a “model student” of Hungarian billionaire George Soros – a hate figure for the European far-right and anti-Semitic conspiracy theorists – in a mocked-up social media graphic shared among others by a far-right MP.

More serious online attacks include a purported photo of Baerbock which in fact shows a similar-looking naked model.

The Greens’ campaign manager Michael Kellner said that the attempts to discredit Baerbock had “taken on a new dimension”, that “women are targeted more heavily by online attacks than men, and that is also true of our candidate”.

Greens co-leader Annalena Baerbock earlier this month. Photo: DPA

Other false claims about the party include reports of a proposed ban on barbecues, as well as plans to disarm the police and enforce the teaching of the Quran in schools.

While such reports are patently absurd, they are potentially damaging to Baerbock and her party as they bid to spring a surprise victory in September.

“She has a very real chance, but the coming weeks are going to be very important because Baerbock’s public image is still taking shape,” Thorsten Faas, a political scientist at Berlin’s Free University told AFP.

In a bid to fight back against the flood of false information, the party has launched a new “online fire service” to report fake news stories.

READ ALSO: Greens become ‘most popular political party’ in Germany

Russian disinformation

Yet stemming the tide is no easy job, with many of those who peddle disinformation now using private messaging services such as WhatsApp and Telegram rather than public platforms such as Facebook.

The pandemic and ongoing restrictions on public life will also make it harder for the campaign to push through their own narratives at public events.

Miro Dittrich of Germany’s Amadeu-Antonio anti-racism foundation claims that lockdown has “played a role” in the spread of fake news.

“People are isolated from their social environment and are spending a lot more time online,” he said.

Another factor is Russia, which has made Germany a primary target of its efforts to spread disinformation in Europe.

According to the European anti-disinformation platform EUvsDisinfo, Germany has been the target of 700 Russian disinformation cases since 2015, compared to 300 aimed at France and 170 at Italy.

As an outspoken critic of the controversial Nord Stream 2 gas pipeline between Germany and Russia, Baerbock may well become a target of such attacks during the election campaign.

By Mathieu FOULKES