Comment: Retreat to ‘‘mañana’’

Spain’s Minister for Industry hadn’t expected that. For the first time during his period in office, the wind was blowing against him. This was as he sought to check the Spanish deficit in the state-controlled electricity sector with a retroactive assault on photovoltaics. His boss, Minister President Zapatero, had to step into the ring on Wednesday to reassure German, American and home-grown investors that "Retroactivity in legislation" could be ruled out.

Was it all, then, a storm in a teacup? All just hysteria? Not at all. For as Zapatero reached over his comfort blanket to the market, his Minister was already aggressively on the front foot. On Thursday – yesterday at time of writing – he surprised the Spanish public by announcing a "State pact in the energy sector" and indeed, together with the opposition party PP (Partido Popular). To be precise, a study group will first of all be formed and will place the system of costs of the entire Spanish electricity sector under scrutiny – and all this without "red lines", as both parties declared with atypical unity.

Red lines means that first of all there will be no increase in electricity prices on July 1 in order to catch up on the horrendous deficit in the power sector of almost €20 billion. With this, both parties are presenting a good figure to the voters. It also means, however, that the form and timing of cuts in photovoltaics are now completely in the air until cash has been generated. No results are to be expected before the summer break at the end of August.

The markets are following the hither-and-thither with chewed fingernails: as Zapatero pronounced his "No" to retroactive cuts, Acciona and Co. showed an upwards trend. One day later, as Sebastián announced his state pact, the values hurtled downward again. Now, for the time being, all signals are stopped.?This is a clever political move on behalf of the Minister for Industry. His first attempt at cutting solar promotion with retroactive validity on July 1 turned into a political disaster for him.

At the same time, it can be celebrated as a first victory for the solar power community against the conventional electricity lobby. Still, this victory could not have been achieved without stark lobbying pressure on behalf of foreign politicians, large banks and groups of investors.

Meanwhile, with his state pact, Sebastián is off the ropes. He has absolved himself first of all of the pressure to be found responsible for increases in electricity prices or dramatic cuts for renewable energies. ?What will the PP contribute to the surprise negotiations announced? And how does it all affect photovoltaics? Caution is advised. Above all, the PP is concerned with an extension of the working life of existing atomic power stations. It is completely plausible that Sebastián, cunning as ever, will attempt to bring his demand for retroactive cuts to the next stage as point of exchange with help of the opposition party and large electricity concerns.

If the PP were to drink from this poisoned chalice, Sebastián’s project would take on the character of "the will of the state", with his bold move toward retroactive cuts for solar promotion hard to avoid then.

The idea was dug up again only on Thursday in a radio interview. "It just can’t be the case that electricity prices increase when the sun shines more or the wind blows harder." Spelling it out: everything from 1,200 kilowatt hours a year belongs to the people.

This is a clear indication that future tariff reductions will occur through limitations in quantity. But will they be retroactive ones?? Zapetero’s statement against an attack on the protection of confidence are to be enjoyed cautiously, however. For on the same day as the Minster President calmed investors, he also reached for the telephone to contact Mariano Rajoy, leader of the Spanish opposition, and offer her the state pact in the power sector.

This is purely aimed at winning time at a moment in which the Government has everything except that. This is because investors in and outside of Spain are watching the moves of the bashed about Minister of Industry. All in all, it is a situation typical of Spain. The summer eases the spirits, with the bitter pills to come after the big football tournament or after the holidays – above all, mañana.