PSOE In The Balearics Preparing For Election

PSOE, otherwise known as PSIB, will be holding their regional congress at the end of next week. Francina Armengol is assured of warm rounds of applause, having already secured her re-election as party general secretary. Four more years, they may well chant, this being how long she has been re-elected for. In under two years time, others (i.e. the electorate) will be invited to grant her four more years as president.

Not that it will be simple for her. The history of PSOE (PSIB) presidents of the Balearics - there have only been two of them, Armengol and Antich - demonstrates that pacts are necessary. For all her unconvincing words about the "progressive" pact of the left, the involvement of Podemos is as capable of arousing suspicions as used to be the case with the Unió Mallorquina. Podemos may be of the left (which the UM were not), but the pact has been no easier than when Maria Munar effectively called the Antich shots before the UM were finally destroyed by the anti-corruption prosecution service.

Past the halfway mark of the administration, Armengol now has to plot the route to the 2019 election. History tells us that she won't have to concern herself with a new or reconfirmed pact, because the Partido Popular will win; as it did in 2003 and 2011 after the two Antich administrations. However, it is not yet obvious that history will repeat itself. The PP has a new leader, Biel Company. More in tune with the PP of the old Balearic school, meaning that he is not a rabid anti-Catalanist in the style of José Ramón Bauzá, Company presents a more acceptable PP face. But under two years away from the election, it is by no means certain that he will secure the mandate.

Company and the PP find themselves in an awkward situation. The PP have backed the calls for a revised economic regime for the Balearics, and the national party - in the form of the Spanish government - appears willing to finally make this a reality. The ink won't be dry on any agreement until some time next year, but if it represents a favourable outcome, then the Rajoy government may well deal a blow to Company.

Doubtless aware of this possibility, the deputy prime minister, Soraya Sáenz de Santamaria, is crafting a higher profile for the government's delegate in the Balearics, Maria Salom. The PP's one-time Council of Mallorca president, Salom is to effectively be "relaunched", as is the delegation. What this means is that the national party wants to impress upon the Balearic public the key roles played by Salom and by Madrid in Balearic affairs. Consequently, as and when a new economic regime is confirmed, the spin machine will seek to ensure that it is Madrid which is seen to be delivering largesse. It will be the national government (i.e. the PP) which makes lives of Balearic citizens better and not Armengol and her regional government.

The problem for Rajoy, Sáenz de Santamaria and Salom (and also Company) is that the electorate might not buy the spin. The economic regime is fundamental to the next election. It's highly doubtful that Madrid will grant the Balearics all the items on the shopping list, but some key ones may be forthcoming. If the financing system were to be overhauled and the Balearics were able to keep more income tax and IVA (VAT) revenue than the islands currently give away, this alone would represent a massive result for Armengol. However, delivering a reformed financing system requires - as Rajoy has pointed out - an accord among regional presidents. Given that many regions benefit from Balearic tax revenue, they will be loathe to accede to Balearic demands.

Nevertheless, it would seem that some new and more beneficial arrangement will be hammered out next year. And lurking in the background is what Congress might have in store. With Pedro Sánchez restored to PSOE's national leadership and with the Rajoy administration on shaky ground, there may yet be a drive towards a provisional form of federalism, which is what Armengol has been advocating. One says provisional because federalism couldn't be rushed, but the principle would mean a different approach to tax revenue and regional powers.

More immediate than any reconstitution of the regional relationship with the state would be the nitty-gritty of the new economic regime. The Balearics have a justifiable, even moral claim for a system to compensate for insularity. Madrid does now appear to accept the argument, but for Armengol and PSIB there is greater urgency in mapping out the path to 2019. The party won't win on its own, which raises the issue of a future pact and therefore dealings with Podemos in particular. And already there are signs of shifts in policy, e.g. on tourism, that bear something of the Podemos mark. These shifts will be on the agenda at the congress, and I'll consider them in a following article.