Position Statement
Marqués de Villamagna 3, 11º
T: (+34) 917 373 200
28001 Madrid
www.circulodeempresarios.org
Toma de Posición – Madrid, octubre de 2022
In defense of institutions and free enterprise
The Círculo de Empresarios cannot remain indifferent in the current public debate regarding the defense of the Constitution and the role our institutions must play in building a free society. A society that allows us to fully develop our vocation as entrepreneurs, strengthening our role as actors of civil society within the framework of the Rule of Law.
The freedom of citizens to pursue their personal and business endeavors depends on the Rule of Law and the Separation of Powers, as enshrined in our constitutional legal system. It is the duty of the State, and especially the Government, to protect these freedoms and shield them from partisan interests, ensuring the independence of institutions that safeguard the liberal democracy we have chosen as our form of government in the Western world and, particularly, within the European Union.
For years, the Círculo has emphasized that institutional quality and legal certainty are essential for the balanced development of the economy and society. The strength of our institutions underpins the architecture of our Rule of Law. A country’s level of development and well-being is directly linked to the quality of its institutions.
We have expressed this concern through various documents and publications over the decades. However, we now feel compelled to once again draw attention to this issue due to the constant interference by the national Government in institutions that define our democratic quality and economic freedom.
During this legislative term, attacks on key State institutions have become frequent from certain members of the PSOE-Podemos-IU coalition government, without being disavowed by the President. Since the current coalition took office, Spain has dropped several places in the democratic quality index, and even the prestigious The Economist, in its annual report, pointed out that our country is one of those that have regressed the most in freedoms, downgrading Spain from a “full democracy” to a “flawed democracy”—in a ranking of four categories, where only “hybrid regimes” and “authoritarian regimes” rank lower.
It is not necessary to look far back to find enough examples of governmental interference in our institutions. The Government’s interference in the Judiciary is evident. It began with the appointment of an Attorney General from the Government itself (later replaced by a trusted figure) and continued, due to the inability of the Government and opposition to reach an agreement, with the blocking of the General Council of the Judiciary from making appointments—later forcing a legal change to allow only the renewal of positions in the Constitutional Court. These actions highlight the Government’s resistance to complying with EU directives on judicial appointments.
To this, we must add the partisan use of an already discredited Center for Sociological Research (CIS), the recent replacement of the president of the National Institute of Statistics (INE) due to differences in criteria with the Ministry of Economic Affairs and Digital Transformation, the removal of the head of the National Intelligence Center (CNI) for reasons apparently unrelated to national security, or pressure on the Independent Authority for Fiscal Responsibility (AIReF) and the Bank of Spain, whose independent reports have been met with impetuous and highly inappropriate statements from some Government members, again without disavowal from the President.
Even the Ombudsman has acted as a government defender, publicly and untimely expressing disagreement with the Constitutional Court’s ruling on the State of Alarm. The Official State Gazette (BOE) has also been used to attack the opposition, partisanly contaminating the preamble of a law, something unprecedented in Spanish democracy.
The Prime Minister and his spokespersons have publicly questioned a Supreme Court ruling on the Andalusian ERE corruption case, and agreements with Catalan separatists apparently include ignoring Supreme Court rulings on the use of Spanish in Catalonia.
Moreover, the current PSOE-Podemos-IU coalition government has set record levels of opacity, violating rulings of the Transparency Council and Good Governance (CTBG). The Government even misled Brussels, falsely claiming that a recent minimum wage increase had been agreed upon with social partners, despite public opposition from the Spanish Confederation of Business Organizations (CEOE).
Corporate governance has also not been spared from these interferences, irregularities, and breaches, as we recently saw with the renewal of the board of the publicly traded company Indra, in which the Government violated all corporate governance norms required in the private sector.
No less serious is the recent decision to establish an additional tax on the profits of banks and energy companies, which undoubtedly constitutes discriminatory legal treatment that will distort the economy, create additional costs for consumers, and hinder access to credit for businesses and individuals. This was done through the legal maneuver of introducing it as a parliamentary bill rather than a government project, avoiding prior regulatory scrutiny at the expense of legal certainty and legislative quality.
Unfortunately, while these intrusions are not new in our democracy, there is broad consensus in Spanish civil society and international institutions that in recent years there has been a serious escalation, crossing all red lines, not only in terms of legality but also ethics and institutional decorum.
All these actions are causing a serious loss of credibility in Spanish democracy, with citizens increasingly perceiving that our institutions are weaker and in continuous decline. The Rule of Law is being progressively eroded, and urgent action is needed to reverse this trend.
Círculo de Empresarios has consistently advocated for a political framework that respects the foundations of liberal democracy and restores political centrality as the basis for Spain’s progress. It is increasingly evident that attacks on essential institutions—such as the Monarchy, the Judiciary, Security Forces, Independent Agencies, and Autonomous Organizations, as well as the questioning of the Constitution and the rewriting of recent history to undermine the merits of Spain’s democratic transition—only serve to divide society and erode trust in our institutional framework.
A Government cannot seek to bring all State institutions under its control. This deeply undemocratic approach undermines the Rule of Law and the Separation of Powers, turning Spain into an authoritarian regime disguised as a democracy—where Parliament, the Judiciary, and State institutions serve the Government or its President, rather than the citizens. Spain needs a government that governs for all, not just for its own interests.
The national Government has a mandate from its citizens and, therefore, the obligation to respect the institutions, allowing them to function independently in service of society as a whole, with the independence expected in a true democracy.
Madrid, October 3, 2023
