Podemos leader Pablo Iglesias met Catalan regional premier Quim Torra Monday in an attempt to work out a deal between the regional Catalan authorities in Barcelona and the new minority Spanish Socialist Party (PSOE) government in Madrid.

The meeting showed that a key purpose of the installation of the PSOE, in which Podemos played a leading role, was to try to put a more “democratic” face on the brutal police repression last October of the Catalan independence referendum. Iglesias acted throughout as an emissary of PSOE Prime Minister Pedro Sánchez.

After nearly a decade of escalating conflict between Madrid and Barcelona over how to impose European Union (EU) austerity, violent conflict erupted last year in Catalonia. Madrid declared the independence referendum illegal. The right-wing Popular Party (PP) government tried and failed to crush the referendum, mounting a massive police crackdown on peaceful voters that left nearly 1,000 people injured. With declarations of support from the PSOE, the PP arrested Catalan nationalist leaders and imposed an unelected government.

After January elections held under this police jackboot led to Torra’s installation, and after Podemos helped install the PSOE in power, Iglesias is now trying to smooth over the conflicts on the basis of accepting Madrid’s anti-democratic policies in Catalonia. He said, “My will is to help ensure that there is a climate of understanding between the Spanish Government and the Catalan political forces.”

Details of the hour and a half discussion in the Catalan government headquarters emerged after the meeting during the press conference. A key issue discussed was the jailing of Catalan nationalist politicians such as Omnium Cultural president Jordi Cuixart, former Catalan National Assembly head Jordi Sànchez, former Catalan Vice Premier Oriol Junqueras and other Catalan regional government ministers.

Iglesias told Torra that Sánchez is willing to transfer them to Catalan jails. “I know that because Sanchez has said this to me,” he assured, adding that this would “de-stress” relations between Catalonia and Spain.

Catalan government spokeswoman Elsa Artadi replied that “the position of the [Catalan] government is not to negotiate the transfer of the prisoners nor to improve their situation, but to free them.”

Podemos did not support freeing the political prisoners, however. Iglesias only proposed a transfer that would “be a first step and an improvement of the current situation”, that is, that they would rot in jail in Catalonia rather than in Spain.

Iglesias added that he would visit the imprisoned leaders, demagogically claiming that Podemos supports a referendum on self-determination in Catalonia. Iglesias proceeded to downplay the significance of the jailings. He claimed that the conflict between the Catalan and Spanish governments over self-determination should “in no way prevent dialogue and exploring democratic means to manage the conflict in Catalonia.”

Also present in the meeting was the leader of Podemos-backed Catalonia in Common party, Xavier Domènech. Earlier this month, Domènech offered to support the Catalan regional government as it passes an austerity budget. The Catalan government has already said it would reduce the deficit set at 0.4 percent of the GDP for 2018, at 0.1 percent for 2019, and at zero for 2020, to comply with Madrid’s commitments to the EU. This will mean around 688 million euros in social cuts or tax hikes in the region this year.

During the meeting, the Catalan nationalists hailed Iglesias. Artadi said, “the role of Podemos in Spanish politics is important,” as a “much of its [the Spanish government’s] strength comes from Podemos.” She added that even though they are not in government, “we should not underestimate the importance that this party can have for the future”, calling Podemos a party that “recognizes the situation” in Catalonia.

Iglesias also promised to develop Torra’s ties with Sanchez: “I have found the regional premier with an absolute disposition for dialogue, so I will convey this to the President of the Government.”

Iglesias said they both shared “republican values,” though Torra is infamous for his anti-worker and anti-Spanish vitriol when he worked as a journalist, when he praised Miquel and Josep Badia as the “best examples” of Catalan nationalism. Both founded fascist para-military squads in the region during the 1930s to terrorise the working class and gun down anarchist leaders.

Iglesias is working to prepare talks between Torra and Sánchez scheduled for July, acting on behalf of Sánchez and Spanish finance capital. Podemos and the PSOE speak for factions of the ruling class, in Spain and internationally, who fear that amid growing strike action by workers in Spain, anger over the Catalan crisis could prove politically explosive and needs more careful handling.

In this, they speak for powerful sections of the ruling class. The president of Santander Bank, one of Spain’s largest banks, recently called for “rebuilding bridges” between Barcelona and Madrid who, he said, need to “work together”. He said Spain should “make all Catalans attracted to Spain again.”

The anti-secessionist Barcelona business lobby Círculo de Economía also released a statement calling for the end of Spain’s “worst crisis since the Constitution was approved in 1978.” In line with the traditional Catalan-nationalist demands, it called for “greater powers to legislate, manage, collect and inspect” tax revenues by regional governments, which would share their “tax bases” with Madrid.

Iglesias’ alignment with the banks and business lobbies exposes the role of Podemos. At the height of the crisis last October, it sought to defuse deep-seated opposition among workers and youth to police-state measures, issuing bankrupt appeals to Madrid and Barcelona to negotiate with the Catalan separatists while the PP escalated repression.

At the time, the PSOE backed the PP. In a letter to PSOE members just after the crackdown, Pedro Sánchez defended PP repression as “a response comparable to that of any country” and “the inevitable response to an unprecedented attempt to break the integrity of the state.”

Now, Podemos is championing a PSOE-Catalan nationalist settlement that would be a reactionary deal made at the expense of the workers.

The Catalan nationalist parties, Torra’s Catalan Democratic Party (PdeCat) and the Republican Left of Catalonia (ERC), have already signaled that they are open to such a deal. They accepted the legitimacy of this year’s elections held at gunpoint by Madrid’s unelected regime in Catalonia. They are seeking a deal, that could perhaps be passed off as a victory based on the improvement in the conditions of the political prisoners, but based on militarism and stepped-up austerity.

The Sánchez government, barely a month old, has signaled that it will keep the previous PP government’s budget, which imposes deep cuts to social spending and massive hikes in military spending. A new austerity budget is in preparation for the end of this year.

On Sunday, in an interview to daily El País, Sánchez said, “The days when the Spanish government made the problems with Catalonia even worse are over. We have to take this one step at a time and rebuild the trust and loyalty that were broken during these years of conflict between the governments of Catalonia and Spain. That is the message I am going to deliver to Torra when I meet him on July 9. There are many things that can be done.”

The policy Sánchez is laying out would be a right-wing and militarist policy, sealed on the basis of police-state repression, and in which Podemos is fully implicated.