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Spain’s PM seeks to shore up economic credentials with cabinet picks

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Via Financial Times

Pedro Sánchez, Spain’s prime minister, will on Sunday formally unveil a cabinet designed to emphasise his new administration’s mainstream social democratic credentials despite his alliance with the radical left.

The new ministerial line-up keeps key economics posts in the hands of Mr Sánchez’s Socialists — and away from Podemos, their leftwing coalition partners.

“Sánchez is signalling to the outside world and to Brussels in particular that he sees this as a broadly social democratic government with a technical character,” said Miguel Otero at the Elcano Royal Institute, a Madrid think-tank. 

“He’s highlighted the importance for him of the economic agenda, his ambitions for Spain to play a bigger role internationally, and that it’s the Socialists, not Podemos, that have the key posts.”

The prime minister has strengthened the roles of his two most senior economics policymakers: Nadia Calviño, economics minister, who becomes a deputy prime minister, and María Jesús Montero, budget minister, who will also serve as government spokesperson.

The two ministers face difficult negotiations at home and abroad at a time when the economy has cooled. The government has to reconcile its spending promises with demands by Brussels to rein in the country’s structural deficit and faces a challenge in passing a budget, given the coalition’s lack of majority in parliament.

Mr Sánchez has given the post of foreign minister to Arancha González, a former World Trade Organization and European Commission official who has most recently headed the International Trade Centre, a UN-WTO development agency.

José Luis Escrivá, head of Spain’s Independent Authority for Fiscal Responsibility, a state public finances watchdog, becomes social security minister.

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The composition of the new government will be formally communicated to King Felipe VI on Sunday, with the ministers taking office on Monday.

Parliament narrowly gave its approval last week to the coalition government’s formation amid controversy. Rightwing politicians denounced the prospect of Communist ministers and the central role played by Catalan and Basque secessionists, whose abstentions were necessary for Mr Sánchez to win the vote.

Spain is the largest EU country where the left holds power, at a time when social democracy is on retreat across much of the continent.

Pablo Iglesias, Podemos leader — whom at one point Mr Sánchez had sought to exclude from government — will now become a deputy prime minister. But, in a move that appears designed to offset Mr Iglesias’s ascent, Mr Sánchez has named three Socialist deputy prime ministers, all women.

While women represented a majority of Mr Sánchez’s first cabinet, named in 2018, his new government will be made up of 12 male and 11 female ministers.

One of Podemos’s most significant appointments is Yolanda Díaz, a labour lawyer and Communist party member who is taking up the employment portfolio. The new government seeks the partial reversal of 2012 labour reforms, which many economists say boosted Spain’s competitiveness but which critics allege have damaged workers rights.

Another Podemos nominee is Manuel Castells, an internationally renowned sociologist who becomes university minister. Overall, Podemos will have five of 23 cabinet seats.

Last week’s parliamentary vote on the installation of the government was contentious not just due to the role of Podemos but also because of the abstention of the Republican Left of Catalonia (ERC), a separatist party. Its leader Oriol Junqueras is serving 13 years in prison for his role in an illegal 2017 referendum and declaration of independence.

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In a move last month widely seen as trying to encourage the ERC’s abstention in the vote on the new government, Spain’s solicitor-general’s office proposed temporarily releasing Mr Junqueras so he could be sworn in as a member of the European Parliament. The European Court of Justice had previously found that Mr Junqueras had held parliamentary immunity as an MEP. 

But the Spanish Supreme Court ruled last week that Mr Junqueras should not be released, maintaining that he lost his status as an MEP when he was sentenced to jail. 

On Friday, the European Parliament concurred that Mr Junqueras was no longer an MEP, but said that two other Catalan politicians, Carles Puigdemont, a former head of the regional administration, and his ally Toni Comín were entitled to sit in the chamber. Both men fled Spain rather than face trial.

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