Thursday, September 03, 2015

Tango In Madrid: Balearic financing

It's the very stuff of negotiating. There are the red lines which cannot be crossed, which cannot be conceded, but then there are the negotiables, the ones that give the opponent some of what is sought while at the same time not weakening one's own position and perhaps even strengthening it.                                                                                                                                                                                                                                                                  
When Francina met Mariano it was just conceivable that the latter would have sent the former away with a flea in her ear. Told her never to darken the doors of the Moncloa again. To take herself to the nunnery of the Balearics and to enter, along with the citizenship, a life of penury and asceticism, praying to the Lord for deliverance.

Whatever one thinks of Rajoy, he isn't stupid. He couldn't afford Francina returning to Mallorca as the failed and humiliated victim of his "aggressions" towards the Balearics, but a heroine nonetheless, the martyr of Partido Popular vengeful parsimony. Francina would have been able to take herself off to the La Beata procession in Santa Margalida on Sunday, her head held defiantly high, trailing behind the the simulator of the ascetic Saint Catalina as she defies the destructive force of the devil. Such symbolism. 

Rajoy and others at PP high command might have given up on Bauzá long before the electorate did, but this doesn't mean they've given up on the Balearics. There are votes to be had, even in lands that turned their backs on Bauzá's version of the regional PP and placed into boxes their fateful electoral envelopes of PSOE, Més and Podemos. Notwithstanding a shift to the left at the regionals and the constant media reminders that the days of two-party politics are over, high command has reasons to not be totally fearful of how the Balearics might vote at the general election. The awkward squad having ensured that Bauzá was spirited away to the Senate, the PP has a potential new look, even if it will be wearing a familiar brown suit. Not everything that Mateo Isern does is for the best, such as his fashion sense, but Palma's one-time mayor, a darling of some at high command and a popular enough figure in the Balearics, despite the PP, could give the party a boost at the head of the list of candidates for Congress and a consequent boost to Rajoy as well.

Not long after Armengol finally managed to scrape a government together, her finance minister, Catalina Cladera, was despatched to Madrid with instructions to issue a broadside to national finance chief, Cristobal Montoro. The Balearics aren't going to put with PP lack of finance any longer. So there. It was all stirring stuff and all bound to fail, and everyone knew it would, including Francina and Catalina. But Francina had, after all, been on the point of losing the support of Biel Barceló and Més during their own little negotiation fandango. An improvement to financing for the Balearics was a demand from Biel, he also knowing full well that there wouldn't be one. Nevertheless, and for appearances' sakes - those of their respective parties and the general public - Catalina marched off, brandishing her sword and discovering that it was made of plastic rather than metal.

When Montoro said no, everyone was able to blame him and Rajoy. Face was not lost by Francina, Catalina (or Biel). It was all Rajoy's fault, and even the local PP was inclined to agree. For weeks since, Francina has uttered the same mantra. Every day, it has seemed. Deficit this, deficit that. Statutory investments here, special regime for the Balearics there. Rajoy knew exactly what was coming. No, Francina, he would not cross the deficit red line and allow the Balearics to plunge into the red and incur the wrath of watching Europeans in the process. But statutory investments that hadn't been paid? Take a look at the special regime again? Agree that the financing model needs revising, but not this year? Sure. Why not? Rajoy had nothing to lose except the money that Madrid has been withholding and a great deal to win by showing wavering PP voters in the Balearics that he wasn't the devil in disguise.

So the heavy-booted steps on the dance floor of the pre-meeting weeks have ended in the tango of Madrid, Mariano conceding what he was happy to. There was no surprise because, despite Catalina shouting at Montoro, he had some while ago conceded that the Balearics needed better treatment. It was a done deal before Francina got on the plane.

Rajoy says that Balearic financing does need modifying, but it won't be looked at until next year. For Francina, financing and the eco-tax came as a package. Get better financing and the tax could be dropped. Because of the other negotiations, those with Biel, the tax has now become more likely. There are some things you can't give way on.

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