The trick of the PSOE and the PP with debts to obtain a privileged position

Political pluralism is one of the pillars of democracy, but in Spain it has been eroded for years to benefit two parties.

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Debt forgiveness by the major parties

These two parties are the Spanish Socialist Workers' Party (PSOE) and the Popular Party (PP), which have been alternating in power in Spain since 1982, creating laws to suit themselves. For years, these laws created by them allowed them to obtain debt forgiveness from banks.

Take for example the data published by the newspaper La Voz de Galicia two decades ago: in 2005, the parties left a third of their bank debts unpaid and many were forgiven. At the head of the defaulters was the Socialist Party of Catalonia (PSC, the Catalan branch of the PSOE), which accumulated debts worth 17.3 million, of which 14.3 million had already expired. Of these, according to the aforementioned newspaper, 6.5 million in interest were forgiven by La Caixa. The Galician newspaper added this fact that gives us an idea of ​​the privileged treatment received by certain parties: "In the last decade, banks and savings banks have forgiven them debts worth 33.8 million euros."

The open door left after the ban on pardons

Following Mariano Rajoy's rise to power and after repeated complaints from the Court of Auditors on the matter, the new PP government approved a reform to limit debt forgiveness for political parties by credit institutions, setting a limit of 100,000 euros per year. The ban on debt forgiveness came in 2015 with another reform of the law on political parties.

However, these reforms left the door open to a legal trick, which the Court of Auditors warned about in 2020:

"It would be appropriate in relation to the prohibition of total or partial forgiveness of debt contracted by political parties with credit institutions to establish that it could not be avoided by non-payment of the debt due indefinitely, so that, in practice, it is not liquidated. Likewise, it is considered necessary that, in view of the emergence of new financing formulas such as microcredits, this prohibition of forgiveness be extended to debts contracted with lenders that are not credit institutions and with commercial creditors."

The PSOE increases its debts while ignoring the Court of Auditors...

It took three years for the PSOE and the PP to start considering these changes, since they are the parties most indebted to the banks (52.4 and 38.5 million euros respectively, according to data from the Court of Auditors published in 2023). It doesn't seem that they have taken it very seriously so far, since the PSOE increased its debt with the banks by more than 77% between 2022 and 2023, according to VozPópuli, going from 15.5 million to 27.6 million euros.

... and at the same time puts the focus on smaller parties

Instead of addressing this, Pedro Sánchez's government is preparing a reform of the Organic Law on the Financing of Political Parties which, as pointed out by the newspaper El Debate, includes measures to cut off foreign financing for Vox (forced to resort to credit institutions in other countries due to the refusal of Spanish banks to grant it loans) and to limiting financing through cryptocurrencies and crowdfunding, resources used by Podemos and the group of voters "Se Acabó La Fiesta".

I have searched and searched and so far there is no news of any limits being placed on non-payment of debts, the habitual vice of the PSOE and the PP. Obviously, using a reform of the law aimed at limiting the obtaining of funds by rivals and at the same time continuing to turn a blind eye to the non-payments of the two major parties is not a measure to "ensure the quality of Spanish democracy", which is how Minister Félix Bolaños has justified this reform, but to continue to erode political pluralism in favor of the two major parties, allowing them to have a privileged relationship with the banks.

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Photo: La Moncloa. A meeting between Pedro Sánchez and Alberto Núñez Feijóo at La Moncloa Palace on October 10, 2022.