ASSESSMENTS

Why Spain's New Coalition Will Struggle to Govern

MIN READJan 8, 2020 | 09:30 GMT

Spain's Congress of Deputies building. Spain's new coalition government faces a fragmented political landscape, a slowing economy and unresolved secession disputes in Catalonia.

(b-hide the scene/Shutterstock)

Spain has just appointed its first coalition government since the return of democracy in the late 1970s, but the new government will struggle to pass structural reforms at a time of growing political fragmentation and slowing economic growth. Prime Minister Pedro Sanchez, who won a vote of investiture in parliament on Jan. 7 and will lead a coalition between his center-left Socialist Party and the left-wing Unidas Podemos, will have to deal with a worsening economic environment, a precarious labor market and secession pressure from Catalonia. Companies operating in Spain, for their part, will face higher taxes and the reversal of some of the market-friendly policies that were introduced during the peak of the economic crisis in the early 2010s....

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