Sorry for the delay, we’ve been upstairs, we’ve closed the deal for budgets and housing law. This is great news for the coalition government
“A heartfelt applause” was what followed those words with which Pedro Sánchez communicated to the Council of Ministers as a whole that a few minutes before the budget negotiation had been unraveled and, above all, the housing law after more than a year of internal disagreements due to the limitation of rental prices. That was precisely the last stumbling block in the talks that resumed in early September and have intensified in recent weeks.
Inequality in corporate tax: large companies pay up to a quarter of that of SMEs
It was the president who closed the deal minutes before 10 am on Tuesday in a meeting in his office with the second vice president, Yolanda Díaz; and the ministers of the Presidency, Félix Bolaños; from the Treasury, María Jesús Montero; and Social Rights, Ione Belarra, who had piloted the talks until then and found themselves at a deadlock. Those same interlocutors [sin Díaz ni el presidente] They had met at 8 in the morning at the Bolaños ministry, inside the La Moncloa complex, to try to close the remaining fringes. The meeting ended “without progress,” according to various interlocutors, and the head of the Presidency transferred it to Sánchez at the end. The president, who did not want to delay the agreement any longer, told him to all go to his office.
“He realized that we were brushing against each other. He stated that we were making an effort to accept the limitation of prices for the rental of legal entities that are large holders in stressed areas and United We can forget the parenting benefit. It was the final point: this yes, this no “, relates a socialist interlocutor. Díaz and Belarra accepted the deal that also included a minimum rate of 15% on corporate tax that the Socialists had already taken for granted in public statements, but had not been confirmed at the negotiating table. “Until Tuesday it had never been raised. They never gave in. The Treasury said that the last word was from the president and that they could not compromise that measure,” indicate sources from the coalition.
The real unblocking, however, occurred on Monday, according to various sources consulted, when Belarra put a new proposal on the table, as Vice President Díaz transferred to Bolaños in a telephone conversation over the weekend. In the new document, United We can open for the first time that the limitation of rents does not affect individuals (small owners) and only operates for large holders. “For us it was a red line,” admit socialist sources. Despite acknowledging that this was the great advance of the negotiation, Bolaños and Montero did not accept it immediately and it was Sánchez who gave the final ok.
Monday, key movement
“On Monday we reached the limit. We left the meeting thinking that if the PSOE did not move, there would be no budgets,” say sources from the confederal group. The negotiating team led by Belarra arrived that day at the meetings on the housing law with the feeling that in Unidos Podemos they had already “moved” as much as they could and maintain that the package of measures endorsed a day later by the president was “practically the same text” as the one provided by the coalition representatives the day before.
The closing of the agreement caught one of the negotiators of the United We Can team live on Canal 24 hours. “As far as I know, that agreement is not closed at this time,” said Nacho Álvarez, Secretary of State for Social Rights and a person of the highest confidence of Yolanda Díaz, when asked after the Secretary of State for Communication confirmed that An agreement had been reached to carry out the 2022 accounts and the housing law.
“He entered the set and sat down for the interview when the agreement was being put together,” UP sources say. While he was interviewed live, Sánchez and Díaz closed the last fringes. Despite his involvement in the entire process, Álvarez found out minutes after the official announcement, when he left the television show. The confirmation came to him in two different ways: Belarra and Díaz confirmed that the accounts were going ahead.
Until that moment there had been “innumerable” contacts between Belarra and Bolaños and endless exchanges of documents in all formats “in hand, via WhatsApp,” admits one of the negotiators. “We have met twice a week and every day there has been an exchange of papers,” acknowledges another of the sources consulted.
The negotiation was basically divided into two tables: one by Montero and Álvarez, in which they addressed merely budgetary content; and the other for the negotiation of the housing law in which Bolaños and Belarra took the reins, together with the Minister of Transport, Raquel Sánchez, and the specific participation of the Secretary General of Urban Agenda and Housing, David Lucas, and the Undersecretary of Social Rights, Joseba Miren. In the final stretch of the negotiation there was a kind of merger. “There have been fifteen days of all with all”, they admit in the negotiating team.
Both parties accept that the process included tense moments. “It has been difficult. They have played hard and so have we,” they acknowledge from the PSOE. Some sources suggest that the majority partner has come to threaten with the elections if there was no agreement – a solution that at this time would harm both forces. “We asked if there was no agreement, what alternatives did the government have without Budgets,” they explain in the PSOE. United We can sources deny that there was a threat of this type, although they admit that the negotiation went through very complicated stages.
Yolanda Díaz’s first budgets
In the messages that neither the PSOE nor the United We could send out doors, the possibility that the accounts would not go ahead has been publicly hinted at. “At no time has the coalition government been in danger. There has been a process of dialogue, of rapprochement of positions that has intensified in recent days,” summarized Bolaños at the press conference on Tuesday. They are also striving now to highlight the good. Vice President Díaz praised the “harmony” of the negotiating teams, thanking them for their work to carry out their first Budgets as leader of United We Can in the Government. What has been your role? “It has not had an excessively relevant role, as Pablo Iglesias did not. We have spoken with her, but we have not negotiated with her,” they point out from the socialist wing.
For its part, United We can state that Díaz “was always well above the budget negotiations.” Even so, the only face-to-face meeting between the president and vice president took place at the Moncloa meeting that triggered the talks between the coalition partners. On Monday the Labor Minister already put pressure on the Socialists through the media, in a statement made before entering the confederal coalition meeting. “Time is running out,” Díaz told reporters, while acknowledging that there was “distance” between the partners in matters such as corporate tax, family benefits, social security and housing.
When Iglesias left the government, in the socialist ranks they thought that a new stage was opening and that Díaz would have a more conciliatory mood. However, as the deadline for the approval of the Budgets has approached – Moncloa spoke of September 28 or October 5 and then expanded the focus to the entire first half of October – United We can publicly aired the discrepancies following the same pressure strategy as in previous negotiations to the point that the PSOE showed its discomfort on Monday, when the government was approaching the point of no return. “In a government, ultimatums are not made, nor is it conditioned,” they warned from Ferraz.
By then, Unidos Podemos had been making the disagreements clear for several weeks. Coalition sources had previously warned journalists that they had “concern” about the proposals made by the Socialists. Pressures rose five days before the deal was announced. On Thursday of last week, the confederal group registered in Congress together with government partners [como ERC, EH Bildu, Más País, o Compromís] a housing law, a document promoted by a hundred organizations, as well as by CCOO and UGT.
In this way, United We can keep the pulse on a very sensitive issue for its electorate. He was supporting an alternative text on rent regulation along with other parties, while they continued sitting at the table negotiating with the PSOE the Government’s proposal to find a solution to the problem of renting in stressed areas, those where prices are higher. “Citizens have the right to know what each formation thinks,” Díaz insisted in an interview on Cadena SER, in which he addressed his partners in the Executive: “We have to convey to the citizens of our country which side we’re”.
This Thursday, after being photographed with the president, Díaz put aside the tensions and highlighted the agreement reached with the Socialists. In his speech to journalists, he addressed young people [un colectivo muy presente en sus discursos] to review the measures approved by the Government and that will be destined to them: a cultural bonus and scholarships to access the processes of the high institutions of the State. With this announcement, the vice president culminates her first challenge as leader of the coalition with an account that she celebrates as inclusive, feminist and social. The majority partner also tries to attract young people. “They are Budgets that incorporate a very important perspective for the young generations of our country,” said the spokeswoman, Isabel Rodríguez, in the presentation of the accounts and the head of the Treasury repeated in the interviews.
After weeks of “complex exercise”, as defined by Montero in the budget negotiations, the coalition is heading to the real test: to obtain the twenty support they need for Congress to approve the accounts with the most investments in history to leave the crisis behind once economic derived from the pandemic that the health emergency seems on track.