Spain’s Monarchy Crisis Has Shaken the Country’s Political Settlement

Following a fortnight of speculation as to his whereabouts, it was confirmed earlier this week that Spain’s emeritus king, Juan Carlos, is in self-exile in the United Arab Emirates, having fled the country in anticipation of the fallout of ongoing corruption and money-laundering probes into his financial affairs.

Spain’s royal household announced Juan Carlos’s dramatic departure as a raft of fresh revelations into alleged misdealings and kickback claims – all potential evidence against the erstwhile king – began to mount and damage the monarchy politically.

This summer, the supreme court has opened an investigation into his role in a Mecca-Medina rail link contract in Saudi Arabia – which landed one Spanish consortium a portion of the project valued at £5.9bn, the most lucrative infrastructure deal of its kind in the country’s history – while Swiss prosecutors are looking into several accounts held by the monarch and his suspected associates in Switzerland. It is also alleged that Juan Carlos received a $100m donation from the king of Saudi Arabia, of which he is thought to have gifted two-thirds to his former lover, Corinna Larsen, after the money was stashed away in an offshore account.

Long protected by the comprehensive crown immunity laws enshrined in the Spanish constitution, Juan Carlos finds himself no longer covered by the impunity he once enjoyed. Despite his abscondment, he has said he remains “at the disposal” of the courts.

But the disclosures of the last six months have not only rocked the Spanish monarchy; they have also shaken the foundations of – and raised new questions for – the post-1978 political and constitutional settlement Juan Carlos sat atop for almost 40 years.

What is the significance of the scandals for the Spanish monarchy?

The 82-year-old is widely considered to have been the architect, or father figure, of the post-transition consensus referred to by some Spaniards as the ‘regime of ‘78’. As General Franco’s named successor, Juan Carlos is remembered for turning away from the dictator’s absolute rule by setting in motion a series of reforms that would lead the country to its current democratic and constitutional framework.

For many years, the renewed constitutional process which began in the late seventies was held up as an exemplary model for democratic transitions – with hardly a shot fired, even despite the upheavals of the transition years, including a failed military coup in 1981 (another key episode in Juan Carlos’ and modern Spain’s foundational myth).

But the revelations over Juan Carlos’s unlawful profiteering not only tarnish the reputation of a figurehead who, until recent years, could muster broad support from a range of diverse sectors across Spanish society – they underline something crucial about the character of the country’s young democracy and the nature of the transition that produced it.

The alternative reading of the period highlights the monarchy’s role in the safeguarding of elite interests and privileges – many acquired during the dictatorship – as Spain began to open up economically and enter a new democratic period. It also traces similar financial gifts from Middle Eastern moguls all the way back to the late 1970s, when Juan Carlos began to operate as a key conduit between foreign oligarchs and Spanish capital.

This counternarrative holds that the culture of cronyism and corruption – now visibly embodied by Juan Carlos and much of the political class that presided over the consensus he ushered in – is, in large part, a reflection of the political compromises made during these years. Failure to capitalise on popular anti-Franco sentiment and organised labour mobilisations amid the upheavals of the late seventies meant Spain’s emerging democracy was defined by top-down reforms and protection of an elite-interests racket.

Juan Carlos’s 2014 abdication – prompted by an elephant-hunting trip in Botswana at the height of the post-crash austerity years – was intended to put a stop to the sorts of headlines afflicting the royal house of late, and to restabilise the regime around current king, Felipe. But the immediate fallout from this year’s sleaze saga has already forced Felipe to renounce his father’s inheritance, and has pushed the prime minister, Pedro Sánchez, to publicly voice his unease and propose a (limited) reform of crown immunity.

What has the reaction been?

When the initial revelations broke, during the height of lockdown, there were noisy, sustained demonstrations from thousands of Spanish balconies, as protesters demanded the former king donate his murky Saudi millions to Spain’s struggling public health service.

As those protests began to die away, however, it became increasingly clear how muted the civil society response to the developing crisis for the monarchy was. Although the lack of a reply is partially explained by the restrictions and unique circumstances brought on by the pandemic, it also signals weaknesses within the Republican movement in Spain, which is diffuse and lacks the ability to reach beyond region-specific independence campaigns.

Moreover, much in the same way Juan Carlos’s stage-managed exit was secretly coordinated and facilitated by the country’s establishment powers, any spontaneous response within Spain has been limited by years of careful curation of public opinion on questions of the monarchy. Famously, the state pollster CIS does not conduct surveys on levels of popular support for the institution, while a broad party-political bloc pledges unbudging loyalty to the king emeritus – blocking the possibility of any mooted referendum that would raise the prospect of a new republic.

Now, it appears the Spanish right is attempting to seize the initiative generated by the wider unease and discontent over the last six months – although, so far, with limited purchase – on the back of a largely self-inflicted crisis within the regime. The radicalised opposition is attempting to capitalise on the political fallout of the pandemic with a view to pushing the political dial towards a scenario whereby a ‘national [emergency]’ administration, as a means of removing leftwing Unidas Podemos from office, is convincingly presented as unavoidable.

What are the implications for Spain’s left government?

The latest crisis of the monarchy has heightened pre-existing divisions and tensions within the eurozone’s only leftwing coalition government. One of the primary sore points has been that junior coalition partner Unidas Podemos was kept uninformed of Juan Carlos’ planned self-exile, while senior coalition partner PSOE – wedded to the monarchy and the broader post-’78 consensus – has attentively helped manage and facilitate his flight behind the scenes.

Led by Pablo Iglesias, Unidas Podemos is unwilling to break up the coalition over the issue, due in part to parliamentary arithmetic, instead choosing to reserve ammunition for a series of key battles ahead (the 2021 budget and the ambition of overturning neoliberal labour reforms chief among them). First, however, the coalition government, which took office just three months before the pandemic hit Europe, faces a series of renewed challenges to its survival.

Although widely considered a stunt, the no-confidence motion far-right party Vox is preparing for September seems likely to set the tone for a schizophrenic autumn cycle – a ‘perfect storm’ comprising the economic fallout of the pandemic; a slow-burning constitutional crisis; the incendiary Catalan question potentially re-entering the frame, with regional elections on horizon; a radicalised Spanish right that has never accepted the coalition’s legitimacy and, mirroring elements of the Venezuelan opposition, now is attempting to bring down the government by fuelling a climate of chaos.

This makes the task of this government all the more urgent. Over the next six to nine months, it needs to secure a series of clear legislative gains over the budget, historical memory legislation and reform of Spain’s notorious gag laws, among other areas. As wider developments look to envelope the fledgling administration, the stakes have arguably never been higher.

Tommy Greene is a freelance journalist and translator based in Spain.