đ This Week in Spain: Going, Going, Gone
Also: Ferrovial fleeing, the taxman cometh, and so does the ex-King.
By @IanMount and @AdrianBono | April 13, 2023 | Madrid | Issue #9
đ Welcome to The Tapa, an English-language, weekly newsletter about all things Spain!
đ„ The Short Week in a Nutshell: It looks like after such a long (holy) weekend weâve all had trouble going back to work, because itâs been a slow news week. Besides the fact that lots of people seem to be trying to leave SpainâFerrovial via a shift to the Netherlands, Catalan separatist politicians via another referendum, Ciudadanos via deathâthere hasnât been one high-impact story splashed all over the newspapers since our last issue. So those of you who get overcome by anxiety just by opening Twitter every day, rejoice! No cause for alarm this week (at least not yet).
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We hardly knew ye
đŠ€ Ciudadanos Is Going the Way of the Dodo
The lights are going out for Ciudadanos, the liberal party that was once expected to be a national force and act as a modern âbisagraâ, or hinge, that could make deals with both the center-left PSOE and the center-right Partido Popular and bring Spanish politics into the 21st century.
But as we approach the May municipal and regional elections, it looks increasingly like Ciudadanos is about to quietly bleed out as its leaders and candidates abandon ship.
Local media have alternately described the partyâs situation in Madrid as an âtotal crisisâ or âchaosâ (which is better is unclear) as city council members continue to abandon Ciudadanos at warp speed.
Just in the last 10 days, six of Ciudadanosâs 11 Madrid city council members have left the party. One even announced her departure in El Mundo and asked people to vote for the PP. This is a serious blow to Madrid Deputy Mayor Begoña VillacĂs and the relatively new party, which joined PP mayor JosĂ© Luis MartĂnez Almeida to form a coalition government in 2019.
VillacĂs unveiled her third and final list of municipal candidates in a party rally in downtown Madrid this week. Not surprisingly, the six runners were not included. âThere are people who disappear in the tough times,â she said (pointedly).
Two Zaragoza city council members also left Ciudadanosâfor the PP.
For Ciudadanos, itâs all over except for the crying. Founded in Barcelona in 2005 as a liberal antidote to Catalan nationalist politics, the party won converts of voters tired of the turgid two-party system, especially after the countryâs economic collapse during the 2007/8 financial crisis
Ciudadanos went national and won 32 seats in Spainâs 350-seat parliament in 2016, and party head Albert Rivera tried to form a government coalition with current Prime Minister Pedro SĂĄnchez of the center-right PSOE socialists (the famous âPacto del abrazoâ). But they fell short.
The partyâs popularity only grew, and a future coalition government with the PSOE seemed likely. But then in 2018 SĂĄnchez used a no-confidence vote to throw out Prime Minister Mariano Rajoy of the center-right PPâwith the help of Catalan separatist parties. These sinful allies could not be excused by the anti-nationalist leaders of Ciudadanos (especially Rivera)âthe separatists were like kryptonite to them.
Ciudadanos took a sharp rightward turn then, away from their classic liberalism, as Rivera and his allies decided the party would oppose everything SĂĄnchez didâand try to overtake the PP as the rightâs leading party.
The party almost overtook the PP, but fell just short in 2019 with 57 seats compared to the PPâs 66.
The funny thing? After this election Ciudadanos and the PSOE had 180 seats between themâenough to form a government. But Rivera and his allies had painted themselves into a corner where they simply couldnât form that coalition any more. Some of their best-known liberal voices left at Riveraâs refusal to reconsider.
Unable to own the right and no longer able to form deals with the left, Ciudadanos lost its point after the 2019 poll. In repeat elections that year, the party suffered a spectacular collapse, losing 2.5 million of its 4.1 million voters and seeing its seat total plunge from 57 to 10. With the failure of his plan clear to all, Rivera left, and since then Ciudadanos has been losing what little life remained in it.
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đŹ Five things to discuss at dinner parties this week:
1. â° Crunch time for the âLey del solo sĂ es sĂâ
Parties from right to left filed their amendments to fix the controversial âsexual libertyâ law (aka âOnly yes means yesâ), promoted by Podemos and passed into law last year, that had the undesired effect of leading judges to reduce the sentences of 943 sex offenders (setting 103 free in the process).
The parliamentary arithmetic to passing a fix is migraine-inducing. The PP voted along with the PSOE to consider the socialistsâ amendment, but now says its support for the amendment isnât guaranteed unless changes it proposes are taken into account. Then thereâs Podemos which, along with some smaller parties, have suggested changes that the PSOE says âwonât fix the problemââand could vote against the fix if their plans are ignored.
The disagreement is more philosophical than practical. Both the PSOE and Podemos want to increase prison terms for those convicted, and to ensure that those who employ violence in a sexual assault receive longer sentences.
How you get there is the issue. The PSOE wants to do this by sorting the crimes into two subcategoriesâwith and without violenceâwhile Podemos wants to continue with one crime and have violence be treated as an aggravating factor during sentencing.
Hereâs the philosophical difference. For Podemos, the whole point of their rewrite of the sexual abuse statute last year was to move the focus away from whether a woman fought back (and what happens to a women if sheâs incapacitated or paralyzed by fear, as in the famous Manada gang rape?) to whether or not she gave consent. I.e. no consent=assault instead of violence=assault. The PSOE âfixâ, to their eyes, returns to the old law, where women were often questioned as to whether they had said no or fought back, thus putting the onus on the victim.
Then thereâs the PP. The center-right party wants to tweak the PSOE proposal by adding some language about minors (i.e. that they canât consent to sex with an adult) and adding punishments for the public distribution of material that promotes the committing of sexual crimes against minors. It has offered 14 proposed changes.
The original vote to consider the PSOE proposal passed with 231 votes in favor, 56 against, and 58 abstentions. The fact that the PP (and Ciudadanos) supported the PSOE in that vote, and that the PP tweaks are largely technical, suggest that, no matter how much Podemos leaders warn against âwalking hand in hand with the right wingâ, the rewrite of the law will pass with the same group.Â
Parliament is expected to vote on the proposals on April 20, and the Senate on April 26.
2. đ« How do you say âItâs not you, itâs meâ in Dutch?
Ferrovialâs move from Spain to the Netherlands may all be done and dusted by the time you read this. The agenda of Thursdayâs company shareholder meeting at 12:30 p.m. in Madrid includes the approval of the infrastructure giantâs annual accounts and the re-appointment of five directors, but the real action is the vote on managementâs controversial plan to reverse merge the Spanish company (which owns a good chunk of Londonâs Heathrow) into its Dutch subsidiary. Spoiler: The plan will pass by a wide margin.
âControversial?â you ask. Indeed. As we noted in early March, Spainâs government hated the idea of losing one of its largest companies, and especially for the reasons Ferrovial citedâthe Netherlandsâ better âfinancing costsâ and âstable legal frameworkâ (among other things).
But the biggest reason for the move? A Netherlands HQ would allow Ferrovial to dual-list its stock in New York (the company has said that there is no legal structure in Spain to allow public companies to also list in the U.S.). And listing in the U.S. makes it much easier to raise money from investors.
Members of Pedro SĂĄnchezâs PSOE government hit back hard this week. The Secretary of State for the Economy Gonzalo GarcĂa AndrĂ©s sent the company a letter Monday stating that the government did not see a valid economic reason to moveâthere was, the government wrote, no obstacle to dual-listing in the U.S, and that it would help clarify the rules if an obstacle popped up.Â
This failure to see a âvalid economic reasonâ brings an implied threat. If Hacienda (aka the taxman) determines that a merger is done not for a valid economic/business reason, but rather to save on taxes, the merging company can lose major tax advantages and get hit with a serious exit bill. (Hacienda boss MarĂa JesĂșs Montero makes this point here.)
Ferrovial punched back with its own letter. It said its economic reasons were âoverwhelming and notoriousâ and demanded that the government not âprejudgeâ the âpurely technical criteriaâ the tax authority must use.
That fight will come later, however. The vote Thursday will almost inevitably go through. Ferrovial chair Rafael del Pino and his sister MarĂa own more than 28% of the shares and will vote for it, as will TCI, which has 7% and Norges Bank, with 1.49% (Norges briefly flirted with voting no). In addition, three leading proxy advisors (ISS, Glass Lewis and Corporance), are advising investors to vote âyesâ.
3. đ» 'Cause I'm the taxman
Tax seasonâaka the campaña de Renta y Patrimonioâis upon us, having started with the post Easter return on April 11. It runs through June 30. Weâre sure you are thrilled.
We wonât be giving you any advice on how to file your taxes because, well, weâre not professionals and weâd likely give advice that would get us in trouble.
But we will point out a few âexcitingâ changes that have come with the new year. Namely to something near and dear to our heartâlife as a self-employed âautĂłnomo.â
The monthly payment the self-employed made for government retirement and health benefits used to be simple. A certain amount was withdrawn each month. How the amount was determined wasnât terribly clear, but it stayed pretty constant after your first two discounted years passed. (More on those discounts in a moment.)
Starting in 2023, however, autĂłnomos will be able to choose an amount based on their earnings. First, you take a gander at social securityâs oddly complicated chart and choose a âtramoâ, or monthly income band, based on how much (net) income you expect for the year. Then you choose what the monthly retirement check youâre aiming for based on that band. For example, if youâre in Tramo 6 (monthly net income of âŹ2.030 to âŹ2.330) you chose a desired retirement payment of âŹ1.045,75 to âŹ2.030. Your monthly payment will be some 31.2% of the number you choose.
Social Security offers a simulator to help you decide. Itâs here.
There are more changes for autĂłnomos. The discounted flat monthly payment new autĂłnomos pay during the first yearâthink of this as the free drug the state is offering you to get into the system and off the black marketâwill rise from âŹ60 to âŹ80 for those who start in 2023.Â
But in the constant left/right battle of Spanish politics, several communities run by the center-right PP are presenting themselves as bastions of entrepreneurship by rebating all of the first year payments made by those who sign up as autĂłnomos in 2023. Madrid is doing this, as are AndalucĂa and Murcia. Even the PSOE-run communities La Rioja and Baleares have gotten in on the act (in Baleares the free year is only for those under 35 and female entrepreneurs).
Bonus note: The taxman can audit your taxes going back four years. So once the filing window closes June 30, they will be able to make your life uncomfortable for tax years 2019, 2020, 2021 and 2022.
4. The Return of the (Emeritus) King
King Emeritus Juan Carlos I is back in Spain next week to attend a sporting event in Galicia and people are waiting for him with open arms/up in arms, depending on where they stand on the whole âroyaltyâ thing. Time to put on your Sunday clothes!
This will be the second time the fallen-from-grace King Emeritus visits Spain since he decided to make Abu Dhabi his permanent residence in 2020 after a series of corruption and tax evasion scandals. The monarch is expected to fly into Vigo, Galicia from London, after attending a bilateral lunch with King Charles III.
Juan Carlos intends to once again be a part of the crew of the BribĂłn, his 6mR class racing yacht, for a training regatta scheduled to take place on April 22 and 23 in Sanxenxo, Pontevedra.
He is not expected to stop by Madrid to visit his son King Felipe VI. The Royal Palace has neither confirmed nor denied that heâs coming, alleging that these are the former head of stateâs âprivate affairsâ.
Private, perhaps, but Spanish media has highlighted the âpoor timingâ of his trip, considering how close we are to the municipal and regional elections in May.
El Mundoâs editorial on Tuesday called the trip âinopportuneâ, saying that republican leaders (as in, opposed to having a constitutional monarchy, such as members of the far-left Podemos) are already calling his visit a show of âdemocratic indecencyâ. In the end, the center-right newspaper argues that with this visit the Crown is âunnecessarily exposedâ.
This is the second year in a row that the King Emeritus is flying to Sanxenxo to participate in a sailing event. Last May, he took part in the InterRĂas trophy, creating a lot of media attentionâand ticking off the Royal Palace because the last thing the institution wants is for people to be reminded of his existence, basically.
While Spanish prosecutors decided to shelve two financial wrongdoing investigations against him in 2022, his popularity has not been doing great since his 2014 abdication. His decision to exile himself three years ago while still being accused of corruption definitely didnât help his case.
5.đ©đ»âđł That Mass Food Poisoning in MasterChef Spain
The competitive cooking show MasterChef is one of Spainâs most popular reality TV series. On the air for 11 seasons now, it is no stranger to controversy. However, nothing could prepare the audience (and contestants) for the latest (hopefully unscripted) plot twist: a case of mass food poisoning that left over 40 people sick in Valencia.
For the fourth episode of the current season, which was filmed on January 19 but aired last Sunday, the show moved to Valencia to celebrate the 20th anniversary of the opening of the OceanogrĂ fic aquarium and treat over 70 of its workers to some delicious shellfish dishes al fresco.
But alas, things went (literally) sour when this week a woman named Irene took to social media to denounce that over half of them had fallen ill after participating in the celebratory meal. Whatâs worse, she claimed that while they told the showâs production about it, they âdidnât even have the decency to apologize to usâ.
âWe couldnât go to work for a few days after that. Even Health Services conducted an investigation but the whole thing went nowhere,â she said, assuring that she had to go to the emergency room to get a shot in order to stop vomiting. âI lost five kilos in three days,â she added, concluding: âThanks MasterChef, for the worst gastronomic experience Iâve had in my entire life.â
Irene decided to delete her Twitter account after the story exploded nationally. The showâs production quickly issued a statement acknowledging the incident and said that, while they were âvery sorryâ this was an âabsolutely exceptional caseâ.
The company said that they have never had to deal with a single case of food poisoning, not even a mild one, since the showâs premiere 11 years ago.
The statement also rejected Ireneâs accusations, saying that after learning of the situation, they had been in constant communication with the aquarium and Health services.
Neither Health Services nor the OceanogrĂ fic authorities have explained what happened that day, according to El Mundo, but it is believed that the shellfish served may have been the culprit of the mass food poisoning.
The showâs production, however, says that all guidelines for the proper handling of food were followed and safety was guaranteed.
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Weâll be back tomorrow with our events issue.