Rajoy resigns: ‘It’s best for Spain’

Spain’s former Prime Minister, Mariano Rajoy, resigned from the leadership of the Partido Popular yesterday, as the country’s new Socialist government signalled key cabinet members including the foreign, economy and budget ministers.

And in another development that could further complicate the PSOE’s hopes of an orderly minority government, the PP said it was considering torpedoing its own 2018 budget proposal in the upper house of parliament.

The Socialists replaced the centre-right PP as Spain's government last Friday after parliament passed a no-confidence motion against Mr Rajoy over a slew of corruption cases.

Yesterday Mr Rajoy said he would step down from his party's leadership, with a successor expected to be elected before the summer.

The PP government's budget proposal is likely to be the new minority administration's first substantial legislative challenge in the lower house of parliament, the Congress, where it holds just 84 of the 350 seats.

The long-delayed proposal was passed by parliament less than a fortnight ago and only with the help of five MPs from the Basque Nationalist Party (PNV by its Spanish acronym).

But the PNV infuriated the PP by siding with the Socialists in the no-confidence vote to oust Mr Rajoy's government.

The draft budget is now in the PP-controlled upper house, the Senate, and some party members have suggested that the conservatives no longer need to back a proposal that contains concessions to the PNV, following the Basques' pivot to the Socialists.

"We could foresee much more instability, more political obstacles, than there were and more difficulties in running the country," Mr Rajoy said, referring to a potential block by the PP of the budget in the upper house.

If returned with amendments to the lower house, the budget will need a new vote and, in a deeply fragmented assembly, the Socialists could be forced to renew the 2017 budget for the rest of the year.

SPENDING TARGET
The new cabinet will be officially named today.

A close aide to Socialist Prime Minister Pedro Sanchez indicated that a former Andalusia councillor, Maria Jesus Montero, would become budget minister in the new government.

Ms Montero would face the task of setting the public sector spending ceiling for 2019, a necessary first step for Spain's local and regional governments to make their own budgets.

Spanish newspapers Expansion and El Pais reported on Tuesday that Nadia Calvino would take over as economy minister, where she would have a coordinating role with Brussels.

Ms Calvino, who is currently director general for the EU budget at the European Commission, can count on a positive economic cycle in Spain, which has one of the highest growth rates in the euro zone.

Mr Sanchez has strong pro-European credentials, and despite his party's relative weakness in parliament Mr Rajoy also ran a minority government, suggesting only limited political fallout to the change of guard in Madrid.

As reported yesterday, Sanchez aide Jose Luis Abalos, who Spanish media said on Tuesday would be named public works minister, told Spanish television that Josep Borrell would be the new government's foreign minister.

Mr Borrell has attracted media attention because of his opposition to Catalan independence.

He will take up the position amid a continuing political crisis between Madrid and Barcelona over Catalonia's independence drive.

Pic by AP Photo/Francisco Seco