When the defense ministers of the NATO states meet today and tomorrow at the Alliance’s headquarters on the outskirts of Brussels, they can expect a full agenda. There is just under a month to go until the summit in Washington, and the planned “Ukraine package” is anything but ready. The last few months have shown that there are consequences on the battlefield if help for Ukraine arrives too late, said NATO Secretary General Jens Stoltenberg.
The Norwegian is shedding some of his diplomatic restraint at the end of his term of office. Today, Stoltenberg will once again insist on “significant commitments” from the allies. 40 billion euros a year would be the minimum. The reference here is the level of aid from the allies since the beginning of the Russian war of aggression. The Secretary General also expects the ministers to agree to his plan for NATO to take over the coordination of bilateral military aid from the US-led Ramstein format in the future. Stoltenberg cleared one obstacle out of the way during a visit to Budapest on Wednesday. Viktor Orbán promised there that he would no longer block the “Ukraine package”. In return, Hungary will receive a kind of opt-out, meaning it does not have to participate either financially or in terms of personnel.
The discussion about fresh money for Ukraine will also dominate the G7 summit starting today in Apulia. A proposal by the USA to use the blocked Russian central bank funds as leverage to mobilize €50 billion on the financial markets is still controversial in detail.
The EU ambassadors could provide some positive news in Brussels on Friday. There is a good chance that the 14th package of Russia sanctions with measures against circumvention can come into force in time for the Ukraine peace summit in Switzerland. If it doesn’t work, for once it might not be Hungary’s fault, but Germany’s. To the annoyance of the Belgian Council Presidency, Berlin registered new reservations at the last minute.
In the tug-of-war over the introduction and level of additional tariffs on Chinese EVs, the first round went to the EU and the team around Commission President Ursula von der Leyen. Brussels has set the tariffs closer to the higher end of the range that has been discussed since the first announcement in October. The German industry and parts of the Berlin government wanted to avert the trade measure and preferred a symbolic minimal tariff.
Germany, as an export nation, greatly feared a trade conflict with China, like the one the USA has already sparked. But Germany is not alone in the EU, and other influential players like France and Spain were clearly in favor of making pure electric cars from China more expensive to import. Von der Leyen also aims to position the EU as a serious geopolitical player, which, in her view, means Brussels must show its teeth.
However, the German government now fears that Beijing will bite back. Since Scholz couldn’t prevent the tariffs, he reportedly pushed in recent weeks for the increases to be only as high as hard evidence on subsidy practices could justify. Beijing should not be challenged more than absolutely necessary.
Within the coalition, Economy Minister Robert Habeck and Finance Minister Christian Lindner reportedly had a much more positive view of the investigation. They support a tougher stance towards China than Scholz.
Lindner’s party colleague Volker Wissing, in his role as Transport Minister, openly opposed the tariffs on Wednesday. “Germany lives from trade and produces for the whole world,” Wissing told Table.Briefings. “Therefore, the EU Commission’s punitive tariffs affect German companies and their top products.” The EU should provide better conditions to produce cheaper and better cars rather than relying on protection through tariffs, which do not increase competitiveness.
Government spokesman Steffen Hebestreit expressed a similar sentiment: The German government hopes for an agreement between the EU Commission and the Chinese government. Brussels has left an option for a face-saving solution and explicitly stated its intention to seek dialogue with the Chinese government to amicably resolve market imbalances. There is an initial deadline before the preliminary implementation in early July and then a transition phase until November.
“There is still time until July 4, and it would be very desirable from our point of view to reach an amicable solution,” Hebestreit said. Germany would participate in the talks if desired, though this is currently “not foreseeable.”
The EU has tried to address concerns from various sides by setting import duties differently depending on the manufacturer to create more nuanced tariffs. Shanghai-based state enterprise SAIC, a close partner of Volkswagen, has to pay more than private company BYD, which the EU sees as having received fewer unfair aids and been more cooperative. As a result, the cost-effective market leader BYD now pays lower tariffs than Geely for cars of the Swedish brand Volvo.
Von der Leyen has thus kept her promise to align the tariffs with an attempt at objectively measuring state aid. However, this task is particularly challenging. In China’s state economy, industrial policy is practically built-in from the outset. Universities train the appropriate specialists and provide research capacities; materials and raw materials are procured cheaply – including oil and gas from Russia; skilled workers are affordable.
But most importantly: The market is so large that enormous quantities are possible. It’s also an open secret that even this market potential in the automotive industry is significantly exceeded by production capacities. The result is fierce price competition – and China would love to export the overproduction.
The EU fears catastrophic consequences for its industry, including the loss of millions of jobs. When China starts exporting goods cheaply, no one else can compete. This has been demonstrated in various industries from textiles, ships, and steel to solar cells and mobile phones.
However, the Commission’s investigation did not focus on general factors but on specific, comparatively direct subsidies, including:
These advantages mostly come not from the central government in Beijing but from cities and provinces that want to give “their” champion better chances. After the investigation, von der Leyen is sure: “The price of these cars is artificially lowered by massive state subsidies – this distorts our market.”
Therefore, the German government had little chance to avert the tariffs. The mechanisms to counter price dumping have long been established in the EU; there is at least a minimum of objectivity built in by preceding the investigation of underlying subsidies.
While the Chancellery and business associations are concerned about Chinese retaliatory measures, experts are giving a preliminary all-clear. “We assume that China will initially react calmly,” says Max Zenglein, an economist at the Mercator Institute for China Studies (Merics) in Berlin.
Zenglein expects signals to be sent to show that the tariffs will not go unanswered. These will be strategically deployed, targeting supporters of the trade measures such as Spain and France. French cognac producers, for instance, expressed particular concern on Wednesday.
China is likely to hold back against Germany’s auto industry for now, as it is a significant advocate of Chinese interests in Europe. The tariffs will be finalized in November, leaving time for China to negotiate. Beijing intends to use this time.
How high are the tariffs?
The EU Commission has decided on provisional additional tariffs on electric vehicles from Chinese production, which vary in amount. Only purely battery-powered electric vehicles are affected. The EU already imposes a ten percent tariff on Chinese electric vehicles, and the additional tariffs are on top of this ten percent.
How were the tariffs calculated?
The tariffs reflect the average amount of unfair subsidy determined by the EU’s investigation. This rate also initially applies to Tesla, which ships cars made in Shanghai to the EU. However, Tesla has requested an individual investigation, which could result in a lower tariff if it is found that Tesla received fewer subsidies.
Why do the additional duties vary?
The EU Commission determined the tariff levels based on the amount of subsidies and the cooperation of the manufacturers. SAIC received the highest rate because it received the most state aid and did not cooperate by providing its figures. The decision was, therefore, based on available facts. Manufacturers like Aiways, JAC, BMW, Chery, FAW, Changan, Dongfeng, GWM, Leapmotor, Nanjing Golden Dragon Bus, Nio, Tesla and Xpeng cooperated and were given the average rate of 21 percent. Affected manufacturers have three working days to contest the calculated tariff.
When do the tariffs take effect?
The provisional additional tariffs will be in effect from July 4. This does not mean that the tariff must be paid from this date. Companies must, however, provide a bank guarantee upon import. If the EU Commission decides on final tariffs (by Nov. 4), the provisional additional charges can be fully applied, potentially retroactively. The EU could then collect the bank guarantees. Alternatively, the Commission could impose final tariffs without retroactive effect.
What happens until Nov. 4?
The Trade Committee of the European Parliament will review the calculation and justification of the tariffs by the Commission. The tariffs will be confirmed through the comitology procedure by member states. The tariff levels and proposed duration of their application can still change until Nov. 4. During this period, discussions with China will continue, with hopes that China will consider the EU’s arguments and the tariff levels can be subsequently reduced.
What subsidies has the EU Commission identified?
The state subsidies for Chinese electric vehicle production span the entire value chain at local, provincial, and national levels. These include: undervalued lithium, special financing benefits, tax breaks, direct payments to companies, specific subsidies for individual manufacturers and common subsidies for all manufacturers.
Could Chinese manufacturers face lower tariffs than European ones?
Yes. European manufacturers producing in China and importing their products into the EU must reckon with the average rate of 21 percent – more than BYD’s 17 percent or Geely’s 20 percent. Vehicles from the SAIC-VW joint venture would also face the additional 38.1 percent, though these vehicles are not currently exported to the EU. The key factor is China as the manufacturing location, not whether the manufacturer is Chinese or European.
How will the tariffs affect customers?
This is still unclear. The crucial factor for applying additional tariffs upon import is the import date, not the purchase date. For example, if someone ordered a BYD electric car in May and it arrives six months later, the additional tariffs may apply. Whether these tariffs will be directly passed on to customers depends on the purchase contract with the dealer or manufacturer.
Are there ongoing talks with China?
The EU Commission has emphasized its desire for a joint solution with the Chinese government. However, the specifics of such a solution remain open. Beijing was reportedly not very engaged during the investigation.
How has China responded to the decision?
Beijing responded promptly, with the Chinese Foreign Ministry stating it would consider all measures to firmly defend its interests. Spokesperson Lin Jian said the EU’s special tariffs on electric cars violated market rules and were against the EU’s interests. The Chinese Chamber of Commerce in the EU expressed “shock, deep disappointment and deep dissatisfaction” over what it termed a protectionist trade measure, calling the investigation politically motivated and opaque.
What other Chinese practices is the EU Commission investigating?
“I’m not leaving, I’m staying”, said Yolanda Díaz on Tuesday, 24 hours after she denied her resignation as Sumar leader due to the poor result in the European elections – 4.65% of the vote, 3 seats. This is not the first time that the second vice president and labor minister in Pedro Sánchez’s government has subsequently qualified her statements. “Palestine will be free from the river to the sea”, said Díaz in May, to Israel’s horror. Even then, Díaz had to clarify afterwards that she had not meant it that way. Now, following her announced resignation on Monday, Díaz is discussing the fact that she is only leaving the post of “coordinator” after all, but will remain on Sumar’s “executive”.
Regardless of whether she stays or resigns completely, the Sumar electoral alliance has had few successes under Díaz’s leadership. Five elections have been held in Spain since July 2023: Parliamentary elections, three regional elections (Galicia, Basque Country and Catalonia) and, most recently, the European elections. Sumar’s results in these elections were either poor or disastrous. In Galicia, Díaz’s home region, Sumar received less than two percent of the vote. Sumar, which unites 14 left-wing minority parties, is only a year old; its weakness is also noticeable as a coalition partner of Sánchez. Díaz now says that she is “protecting the coalition government” by staying in Sumar.
Díaz’s political career spans more than a quarter of a century. One characteristic of this career is that Díaz has repeatedly succeeded in forging alliances with political heavyweights who are more important than she is. Equally characteristic: time and again, these alliances break down in fierce disputes or insurmountable differences of opinion.
Growing up in a politically engaged family, politics was part of her daily life from an early age. Yolanda Díaz was born in 1971 in Fene, a small Galician town of 13,000 inhabitants on the Atlantic coast in north-western Spain, ten kilometers from Ferrol, the birthplace of Francisco Franco. In the midst of Franco’s dictatorship, her father, Suso Díaz, was a secret supporter of the Communist Party and a well-known trade unionist. She studied law at the University of Santiago de Compostela and was admitted to the bar in 1998. In 1999, she ran for Ferrol city council on the Izquierda Unida (IU) list, but did not even make it into parliament.
In 2007, she succeeded in becoming deputy mayor of Ferrol thanks to an alliance with the socialist Vicente Irisarri. However, the coalition lasted barely 16 months due to strong differences with Irisarri. In 2012, Díaz formed an alliance with Galician nationalist Xosé Manuel Beiras to found Alternativa Galega de Esquerda (AEG) and stand as a candidate in the regional elections. At the time, AEG managed to become the third political force in a region dominated by the conservative People’s Party (PP). One of its closest advisors in this election campaign was the previously unknown Pablo Iglesias, founder of the Podemos party.
In 2015, AEG, IU and Podemos joined forces to contest the parliamentary elections for Galicia under the name En Marea. The three-party alliance managed to become the second-largest party in the region. However, the break with the AEG was just as bitter as the end of Díaz’s coalition with the socialists from Ferrol. Beiras even accused Díaz of betrayal.
Thanks to Pablo Iglesias, Díaz joined Pedro Sánchez’s government in 2020 and was appointed Minister of Labor. Iglesias supported Sánchez’s inauguration in 2020 in return for his political group Unidas Podemos receiving ministerial posts and Iglesias being appointed Vice-President. When Iglesias resigned in March 2021 after just 14 months in office, he appointed Díaz as his successor. Díaz suddenly became Spain’s vice president and head of Unidas Podemos.
The break with Iglesias and Unidas Podemos was not long in coming. Díaz avoided giving Podemos the dominant role that the party had under Iglesias in the coalition with Sánchez’s PSOE. When Irene Montero, Iglesias’ wife and former equality minister, was sharply criticized in late 2022 and early 2023 for the failure of her “only yes means yes” law, Díaz did not stand by her parliamentary colleague. The disputes with Podemos came to a head when Díaz vetoed Montero after the founding of Sumar and when drawing up the lists for the parliamentary elections in July 2023. In December, Podemos announced its break with Díaz and Sumar officially.
As Minister of Labor, however, Yolanda Díaz is also praised for several successes. During this legislative period, she succeeded in raising the minimum wage to €1,134 euros. Opinions are divided when it comes to her labor reform. One of the main criticisms is that the primary aim of the reform, to promote job stability and limit the disproportionate use of temporary contracts, has not been achieved. The challenges of this new legislative period include reducing working hours to 37.5 hours per week.
When the defense ministers of the NATO states meet today and tomorrow at the Alliance’s headquarters on the outskirts of Brussels, they can expect a full agenda. There is just under a month to go until the summit in Washington, and the planned “Ukraine package” is anything but ready. The last few months have shown that there are consequences on the battlefield if help for Ukraine arrives too late, said NATO Secretary General Jens Stoltenberg.
The Norwegian is shedding some of his diplomatic restraint at the end of his term of office. Today, Stoltenberg will once again insist on “significant commitments” from the allies. 40 billion euros a year would be the minimum. The reference here is the level of aid from the allies since the beginning of the Russian war of aggression. The Secretary General also expects the ministers to agree to his plan for NATO to take over the coordination of bilateral military aid from the US-led Ramstein format in the future. Stoltenberg cleared one obstacle out of the way during a visit to Budapest on Wednesday. Viktor Orbán promised there that he would no longer block the “Ukraine package”. In return, Hungary will receive a kind of opt-out, meaning it does not have to participate either financially or in terms of personnel.
The discussion about fresh money for Ukraine will also dominate the G7 summit starting today in Apulia. A proposal by the USA to use the blocked Russian central bank funds as leverage to mobilize €50 billion on the financial markets is still controversial in detail.
The EU ambassadors could provide some positive news in Brussels on Friday. There is a good chance that the 14th package of Russia sanctions with measures against circumvention can come into force in time for the Ukraine peace summit in Switzerland. If it doesn’t work, for once it might not be Hungary’s fault, but Germany’s. To the annoyance of the Belgian Council Presidency, Berlin registered new reservations at the last minute.
In the tug-of-war over the introduction and level of additional tariffs on Chinese EVs, the first round went to the EU and the team around Commission President Ursula von der Leyen. Brussels has set the tariffs closer to the higher end of the range that has been discussed since the first announcement in October. The German industry and parts of the Berlin government wanted to avert the trade measure and preferred a symbolic minimal tariff.
Germany, as an export nation, greatly feared a trade conflict with China, like the one the USA has already sparked. But Germany is not alone in the EU, and other influential players like France and Spain were clearly in favor of making pure electric cars from China more expensive to import. Von der Leyen also aims to position the EU as a serious geopolitical player, which, in her view, means Brussels must show its teeth.
However, the German government now fears that Beijing will bite back. Since Scholz couldn’t prevent the tariffs, he reportedly pushed in recent weeks for the increases to be only as high as hard evidence on subsidy practices could justify. Beijing should not be challenged more than absolutely necessary.
Within the coalition, Economy Minister Robert Habeck and Finance Minister Christian Lindner reportedly had a much more positive view of the investigation. They support a tougher stance towards China than Scholz.
Lindner’s party colleague Volker Wissing, in his role as Transport Minister, openly opposed the tariffs on Wednesday. “Germany lives from trade and produces for the whole world,” Wissing told Table.Briefings. “Therefore, the EU Commission’s punitive tariffs affect German companies and their top products.” The EU should provide better conditions to produce cheaper and better cars rather than relying on protection through tariffs, which do not increase competitiveness.
Government spokesman Steffen Hebestreit expressed a similar sentiment: The German government hopes for an agreement between the EU Commission and the Chinese government. Brussels has left an option for a face-saving solution and explicitly stated its intention to seek dialogue with the Chinese government to amicably resolve market imbalances. There is an initial deadline before the preliminary implementation in early July and then a transition phase until November.
“There is still time until July 4, and it would be very desirable from our point of view to reach an amicable solution,” Hebestreit said. Germany would participate in the talks if desired, though this is currently “not foreseeable.”
The EU has tried to address concerns from various sides by setting import duties differently depending on the manufacturer to create more nuanced tariffs. Shanghai-based state enterprise SAIC, a close partner of Volkswagen, has to pay more than private company BYD, which the EU sees as having received fewer unfair aids and been more cooperative. As a result, the cost-effective market leader BYD now pays lower tariffs than Geely for cars of the Swedish brand Volvo.
Von der Leyen has thus kept her promise to align the tariffs with an attempt at objectively measuring state aid. However, this task is particularly challenging. In China’s state economy, industrial policy is practically built-in from the outset. Universities train the appropriate specialists and provide research capacities; materials and raw materials are procured cheaply – including oil and gas from Russia; skilled workers are affordable.
But most importantly: The market is so large that enormous quantities are possible. It’s also an open secret that even this market potential in the automotive industry is significantly exceeded by production capacities. The result is fierce price competition – and China would love to export the overproduction.
The EU fears catastrophic consequences for its industry, including the loss of millions of jobs. When China starts exporting goods cheaply, no one else can compete. This has been demonstrated in various industries from textiles, ships, and steel to solar cells and mobile phones.
However, the Commission’s investigation did not focus on general factors but on specific, comparatively direct subsidies, including:
These advantages mostly come not from the central government in Beijing but from cities and provinces that want to give “their” champion better chances. After the investigation, von der Leyen is sure: “The price of these cars is artificially lowered by massive state subsidies – this distorts our market.”
Therefore, the German government had little chance to avert the tariffs. The mechanisms to counter price dumping have long been established in the EU; there is at least a minimum of objectivity built in by preceding the investigation of underlying subsidies.
While the Chancellery and business associations are concerned about Chinese retaliatory measures, experts are giving a preliminary all-clear. “We assume that China will initially react calmly,” says Max Zenglein, an economist at the Mercator Institute for China Studies (Merics) in Berlin.
Zenglein expects signals to be sent to show that the tariffs will not go unanswered. These will be strategically deployed, targeting supporters of the trade measures such as Spain and France. French cognac producers, for instance, expressed particular concern on Wednesday.
China is likely to hold back against Germany’s auto industry for now, as it is a significant advocate of Chinese interests in Europe. The tariffs will be finalized in November, leaving time for China to negotiate. Beijing intends to use this time.
How high are the tariffs?
The EU Commission has decided on provisional additional tariffs on electric vehicles from Chinese production, which vary in amount. Only purely battery-powered electric vehicles are affected. The EU already imposes a ten percent tariff on Chinese electric vehicles, and the additional tariffs are on top of this ten percent.
How were the tariffs calculated?
The tariffs reflect the average amount of unfair subsidy determined by the EU’s investigation. This rate also initially applies to Tesla, which ships cars made in Shanghai to the EU. However, Tesla has requested an individual investigation, which could result in a lower tariff if it is found that Tesla received fewer subsidies.
Why do the additional duties vary?
The EU Commission determined the tariff levels based on the amount of subsidies and the cooperation of the manufacturers. SAIC received the highest rate because it received the most state aid and did not cooperate by providing its figures. The decision was, therefore, based on available facts. Manufacturers like Aiways, JAC, BMW, Chery, FAW, Changan, Dongfeng, GWM, Leapmotor, Nanjing Golden Dragon Bus, Nio, Tesla and Xpeng cooperated and were given the average rate of 21 percent. Affected manufacturers have three working days to contest the calculated tariff.
When do the tariffs take effect?
The provisional additional tariffs will be in effect from July 4. This does not mean that the tariff must be paid from this date. Companies must, however, provide a bank guarantee upon import. If the EU Commission decides on final tariffs (by Nov. 4), the provisional additional charges can be fully applied, potentially retroactively. The EU could then collect the bank guarantees. Alternatively, the Commission could impose final tariffs without retroactive effect.
What happens until Nov. 4?
The Trade Committee of the European Parliament will review the calculation and justification of the tariffs by the Commission. The tariffs will be confirmed through the comitology procedure by member states. The tariff levels and proposed duration of their application can still change until Nov. 4. During this period, discussions with China will continue, with hopes that China will consider the EU’s arguments and the tariff levels can be subsequently reduced.
What subsidies has the EU Commission identified?
The state subsidies for Chinese electric vehicle production span the entire value chain at local, provincial, and national levels. These include: undervalued lithium, special financing benefits, tax breaks, direct payments to companies, specific subsidies for individual manufacturers and common subsidies for all manufacturers.
Could Chinese manufacturers face lower tariffs than European ones?
Yes. European manufacturers producing in China and importing their products into the EU must reckon with the average rate of 21 percent – more than BYD’s 17 percent or Geely’s 20 percent. Vehicles from the SAIC-VW joint venture would also face the additional 38.1 percent, though these vehicles are not currently exported to the EU. The key factor is China as the manufacturing location, not whether the manufacturer is Chinese or European.
How will the tariffs affect customers?
This is still unclear. The crucial factor for applying additional tariffs upon import is the import date, not the purchase date. For example, if someone ordered a BYD electric car in May and it arrives six months later, the additional tariffs may apply. Whether these tariffs will be directly passed on to customers depends on the purchase contract with the dealer or manufacturer.
Are there ongoing talks with China?
The EU Commission has emphasized its desire for a joint solution with the Chinese government. However, the specifics of such a solution remain open. Beijing was reportedly not very engaged during the investigation.
How has China responded to the decision?
Beijing responded promptly, with the Chinese Foreign Ministry stating it would consider all measures to firmly defend its interests. Spokesperson Lin Jian said the EU’s special tariffs on electric cars violated market rules and were against the EU’s interests. The Chinese Chamber of Commerce in the EU expressed “shock, deep disappointment and deep dissatisfaction” over what it termed a protectionist trade measure, calling the investigation politically motivated and opaque.
What other Chinese practices is the EU Commission investigating?
“I’m not leaving, I’m staying”, said Yolanda Díaz on Tuesday, 24 hours after she denied her resignation as Sumar leader due to the poor result in the European elections – 4.65% of the vote, 3 seats. This is not the first time that the second vice president and labor minister in Pedro Sánchez’s government has subsequently qualified her statements. “Palestine will be free from the river to the sea”, said Díaz in May, to Israel’s horror. Even then, Díaz had to clarify afterwards that she had not meant it that way. Now, following her announced resignation on Monday, Díaz is discussing the fact that she is only leaving the post of “coordinator” after all, but will remain on Sumar’s “executive”.
Regardless of whether she stays or resigns completely, the Sumar electoral alliance has had few successes under Díaz’s leadership. Five elections have been held in Spain since July 2023: Parliamentary elections, three regional elections (Galicia, Basque Country and Catalonia) and, most recently, the European elections. Sumar’s results in these elections were either poor or disastrous. In Galicia, Díaz’s home region, Sumar received less than two percent of the vote. Sumar, which unites 14 left-wing minority parties, is only a year old; its weakness is also noticeable as a coalition partner of Sánchez. Díaz now says that she is “protecting the coalition government” by staying in Sumar.
Díaz’s political career spans more than a quarter of a century. One characteristic of this career is that Díaz has repeatedly succeeded in forging alliances with political heavyweights who are more important than she is. Equally characteristic: time and again, these alliances break down in fierce disputes or insurmountable differences of opinion.
Growing up in a politically engaged family, politics was part of her daily life from an early age. Yolanda Díaz was born in 1971 in Fene, a small Galician town of 13,000 inhabitants on the Atlantic coast in north-western Spain, ten kilometers from Ferrol, the birthplace of Francisco Franco. In the midst of Franco’s dictatorship, her father, Suso Díaz, was a secret supporter of the Communist Party and a well-known trade unionist. She studied law at the University of Santiago de Compostela and was admitted to the bar in 1998. In 1999, she ran for Ferrol city council on the Izquierda Unida (IU) list, but did not even make it into parliament.
In 2007, she succeeded in becoming deputy mayor of Ferrol thanks to an alliance with the socialist Vicente Irisarri. However, the coalition lasted barely 16 months due to strong differences with Irisarri. In 2012, Díaz formed an alliance with Galician nationalist Xosé Manuel Beiras to found Alternativa Galega de Esquerda (AEG) and stand as a candidate in the regional elections. At the time, AEG managed to become the third political force in a region dominated by the conservative People’s Party (PP). One of its closest advisors in this election campaign was the previously unknown Pablo Iglesias, founder of the Podemos party.
In 2015, AEG, IU and Podemos joined forces to contest the parliamentary elections for Galicia under the name En Marea. The three-party alliance managed to become the second-largest party in the region. However, the break with the AEG was just as bitter as the end of Díaz’s coalition with the socialists from Ferrol. Beiras even accused Díaz of betrayal.
Thanks to Pablo Iglesias, Díaz joined Pedro Sánchez’s government in 2020 and was appointed Minister of Labor. Iglesias supported Sánchez’s inauguration in 2020 in return for his political group Unidas Podemos receiving ministerial posts and Iglesias being appointed Vice-President. When Iglesias resigned in March 2021 after just 14 months in office, he appointed Díaz as his successor. Díaz suddenly became Spain’s vice president and head of Unidas Podemos.
The break with Iglesias and Unidas Podemos was not long in coming. Díaz avoided giving Podemos the dominant role that the party had under Iglesias in the coalition with Sánchez’s PSOE. When Irene Montero, Iglesias’ wife and former equality minister, was sharply criticized in late 2022 and early 2023 for the failure of her “only yes means yes” law, Díaz did not stand by her parliamentary colleague. The disputes with Podemos came to a head when Díaz vetoed Montero after the founding of Sumar and when drawing up the lists for the parliamentary elections in July 2023. In December, Podemos announced its break with Díaz and Sumar officially.
As Minister of Labor, however, Yolanda Díaz is also praised for several successes. During this legislative period, she succeeded in raising the minimum wage to €1,134 euros. Opinions are divided when it comes to her labor reform. One of the main criticisms is that the primary aim of the reform, to promote job stability and limit the disproportionate use of temporary contracts, has not been achieved. The challenges of this new legislative period include reducing working hours to 37.5 hours per week.
