Election 2008: Spanish PM Unveils Female-Dominated Cabinet, Focuses on Economy

José Luis Rodriguez Zapatero was sworn in as Spanish prime minister for a second term on Saturday (12 April) following the 9 March general election, at which his Spanish Socialist Workers Party (PSOE) won re-election (see Spain: 10 March 2008: Election 2008: Socialists Secure Re-Election in Spain After Fierce Campaign). Following his inauguration, Zapatero unveiled his new, female-dominated cabinet, which is tasked with turning around Spain's fortunes both at home and abroad. Zapatero’s second term got off to a shaky start after he had to be presented to parliament twice before winning approval via a simple majority. The vote on Friday (11 April)—during which he received the backing of all 169 PSOE deputies, while 158 legislators voted against his appointment and 23 MPs from the smaller Catalan and Basque nationalist parties abstained—came two days after he failed to win an absolute majority in a first-round ballot. Although the PSOE had stated that it expected there to be two votes, this demonstrates the fundamental problem Zapatero will encounter in the coming legislature, as he is once again leading a minority government—the PSOE is seven seats short of an absolute majority in the 350-seat lower house of parliament. His new cabinet has a broad smattering of familiar faces, most notably Economy Minister Pedro Solbes and Foreign Minister Miguel Ángel Moratinos, demonstrating Zapatero's desire to maintain continuity at a time of relative turbulence in Spain, both politically and economically.

The New Cabinet: A Series of Familiar Faces

For the first time ever, more women than men hold cabinet positions in the new government, demonstrating Zapatero’s strong commitment to encouraging gender equality in the still largely paternalistic country. This commitment is also exemplified by the creation of an Equality portfolio, headed by Bibiana Aido. Spain’s new government line-up combines continuity in key posts with some surprising new additions, such as PSOE rising star Carme Chacón as the country’s first female defence minister.

The Economy: An Uphill Struggle

The announcement, made during pre-election campaigning, that Zapatero had managed to convince respected Economy and Finance Minister Pedro Solbes to delay his retirement plans and stay in charge of the ministry, which is key in Spain’s attempts to improve the increasingly sluggish economy, in part contributed to the PSOE’s successful re-election. Solbes, known domestically and internationally for his strong economic credentials (he is a former European Union economic commissioner), managed to bring in budget surpluses for several years running during the government’s first term—a rarity in Europe. However, the reality of the current situation means that he will now need to loosen the purse strings in order to boost the economy. The global credit crunch and rising interest rates have hit Spain’s largest sector—construction—particularly hard, prompting the Bank of Spain to predict GDP growth of 2.4% this year, a significant decrease on expansion of 3.8% last year, while the International Monetary Fund (IMF) has predicted growth of only 1.8% for 2008. Furthermore, the negative economic outlook is not confined to growth, with inflation of 4.5% and an unemployment increase of 800,000 expected over the next two years.

In his first parliamentary address, Zapatero promised short-term relief in the form of increased funding for public works schemes with the aim of helping unemployed construction workers find new jobs, and an increase in the minimum wage. He also announced his intention to fulfil his election pledge of a 400-euro (US$632) income tax rebate for all workers and pensioners starting in July, and promised that value-added tax (VAT) rebates for businesses would be paid more quickly. Solbes yesterday announced an economic stimulus package worth 10 billion euro a year designed to soften the blow of the looming housing crisis: 6 billion euro will be spent on the aforementioned 400-euro tax rebate, and the rest will be spent on helping small and medium-sized enterprises (SMEs) and providing guarantees for banks extending loans to those purchasing subsidised housing. Solbes will be helped in his mammoth task by Science and Innovation Minister Cristina Garmendia, whose portfolio is responsible for helping to diversify Spain’s economy away from construction and towards high-tech industries.

Terrorism and Regional Autonomy

Another important ministry during Zapatero’s new mandate is the Interior Ministry, overseen again by Alfredo Pérez Rubalcaba. He faces the challenge of dealing with a resurgent ETA and raising support from the opposition, centre-right Popular Party (PP) for the recently suggested cross-party strategy to combat the Basque separatist group, as well as on other issues such as Spain’s policy on Europe and judicial reform. Zapatero’s first four years in parliament were marked by regular confrontations with the PP over the PSOE’s failed attempt to negotiate peace with the terrorist group.

Furthermore, Zapatero’s decision not to enter into a coalition agreement with the small but significant Catalan and Basque parties can be interpreted as a nod to the previous divisions with the opposition, which accused the prime minister of endangering Spanish unity by granting concessions to the regions in response to their demands for increased autonomy. During the upcoming legislature it is widely expected that the Basques will stage, or at least attempt to stage, a regional referendum on self-government bordering on independence—a move heavily opposed by the PP, as well as the PSOE, which is attempting to prevent the move by offering further concessions in the form of greater autonomy. The issue of regional autonomy has been exacerbated in recent months by the severe water shortage in the coastal city of Barcelona—the capital of the Catalan government. Catalonia's regional government wants to divert water from the Segre River to Barcelona as a temporary solution to the shortage until a desalination plant near the city is brought on line next year. The central government has, however, vetoed that option since it is severely opposed by other regions through which the Segre River flows. The difficult task of mediating between national and regional interests and deciding whether water should be centrally managed will now fall to Environmental Minister Elena Espinosa.

Family Values and International Relations

Finally, the PSOE’s pledge to pass laws in its second term ending discrimination on the grounds of sexual orientation, ethnic origin, or religious beliefs, as well as new measures to combat domestic violence, will be overseen by youthful Equality Minister Bibiana Aido. Foreign Minister Miguel Ángel Moratinos also faces a difficult start to the new mandate since he has been tasked with repairing Spain’s relations with the United States after four years of less-than-friendly dealings inspired by Zapatero’s decision to withdraw Spanish troops from Iraq in 2004. The two countries have more recently clashed over Spain’s insistence on maintaining its policy of constructive engagement with Cuba, whereas the United States has sought to isolate the island through economic sanctions and travel restrictions. Moratinos will also need to focus on preparing Spain for the presidency of the European Union (EU) in the first half of 2010.

Outlook and Implications

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