Elections

Euro News Memo – Outcome of the Spanish elections

This Sunday we saw the much expected result of a divided Congreso de los Diputados in the Spanish Cortes Generales – the parliament – after a tough fought general elections campaign. With a higher turn out than in 2011, Spain is facing its most divided legislature perhaps since the advent of democracy in the 70s. A short analysis

Outcome

The key but widely expected outcome is that Prime Minister Mariano Rajoy and the Partido Popular (PP) lost their absolute majority won in the 2011 elections, and despite gaining the largest share of the votes, are far from the required 176 seats for a majority, with a mere 123 and 29% of the vote. Meanwhile, the PP’s establishment rival, the Partido Socialista Obrero Español (PSOE), came second with 90 seats (22%), apparently failing to legitimately provide the alternative to the  pro-austerity regime Rajoy conducted over the past 4 years. It seems the likelihood was Pedro Sanchez was not a credible alternative to the vastly unpopular Rajoy among PP voters, and yet failed to mobilise the anti-austerity leftists, who flocked around Podemos. Meanwhile, the left-wing populists of Pablo Iglesias scrapped together the largest challenge to traditional Spanish politics, mustering a huge 69 seats (20%) for the barely two-year old party, and clearly becoming the largest thorn in the establishment’s side. Finally, the centrist liberal Ciudadanos  under Albert Rivera gained a somewhat disappointing 40 seats, and only 14% of the vote. It was clear according most polls and signs leading up to the election that whilst Podemos would not experience the same success as their leftist allies in Greece Syriza, as was the case in January, the 2-party legislature would be over in Spain, and a new agenda would have to be considered. Not only are the Spanish fairly tired of austerity as are all south-European states, but Mariano Rajoy is deeply unpopular (considered to be the least popular leader in Spain’s democratic history) and his reforms have only had so much success – Spain’s unemployment is still the second largest in Europe behind Greece’s. Despite this it seems that PSOE was unable to provide the alternative, and therefore are also unable to form a majority in the Cortes Generales, many of those potential votes going to the far more radical Podemos, or clinging in desperation to the PP. The most surprising outcome for me, despite not meeting expectations, is the inroads made by Ciudadanos. With the crumbling of the Liberal Democrats in Westminster in May, and the general lack of support for centrist politics in most of Europe, it’s fantastic to see Spain’s liberals become an entity in the Congress.

Current deliberations

What is on the question of many Spaniards now is what happens next, and the FT framed it as Spain heading for turmoil after the fragmentation of the parliament. I’m not so sure about that, however where to go now is certainly not a clear decision. Previously thought to be the likely ‘Kingmakers’, Ciudadanos I think will be the least likely to feature in any potential ruling coalition – the simply do not possess the seats required to form a government with the PP alone, and if the PP ally with the PSOE, then they will be unnecessary. Furthermore Rivera said he would not work with Rajoy as Prime Minister. Meanwhile on the left, PSOE would need the centrists’ seats if they want to form a ‘coalition of the losers’, however Rivera has previously stated he has no interest in joining such a coalition, despite Portugal going down the same path in the aftermath of the Portuguese elections in October. Naturally, the likelihood of a PP-Podemos coalition is a grand total of 0 percentage chance, and the new new parties on the political scene are too small to form a government themselves, even with the support of what’s left in the legislature. I’ve seen the idea of a leftist-coalition with the support of those regional and protest candidates be suggested by the likelihood of this taking place seems far-fetched, and unlikely to remain stable – those few parliamentarians, coupled with a party like Podemos would cause a lot of trouble for the more moderate legislature of the PSOE. A grand-coalition in German style seems to me the most likely outcome in Spain’s politicians really want to form a government and get about running the country – both PP and PSOE are establishment and more in favour of centre-ground politics, and the most likely to be able to form a stable partnership – Ciudadanos could have fulfilled this role, had their results been a little better. This of course would be a tremendous let down for those voters who strayed from the establishment parties last Sunday, and would throw fuel on Podemos’ and other populists’ fire that the establishment are ultimately in it for themselves, and are not going to govern in the people’s name. If Ciudadanos can be persuaded to join a coalition, this could provide the best alternative, however there will be long negotiations and it will then be a test to see whether Spain’s new parties can live up to the radical reformist rhetoric.

Impact in the long-run

The long term impact of this election will revolve mainly around on who comes out on top as the ruling coalition, however for certain Spain’s politics has seen a shift, though I’d say most commentators are over-stating the impact. If Podemos are cut from the ruling coalition, voters may see this as an end to the tide of change and give up on the party, as it seems has happened with UKIP in Britain. Even if they do make it into government, a successful continuation of Spanish economic recovery may well restore Spaniards’ hopes in their traditional parties, and the supposed end of bipartisan politics will turn out to been called too soon. If Rajoy’s PP do end up cut out of the government, it’ll be interesting to see how much of a shift Spanish economic policy sees, considering that was part of the platform of most of the PP’s rivals. This could bode well for Europe as a whole, as it would add to the increasing demands for a an end to Sparpolitik (austerity) imposed by the German government. With Portugal, Greece, perhaps Spain, and to some extend Italy are also challenging the Berlin-set consensus, the north-south divide would be complete. This could bode well, or further aggravate tensions; what’s clear is that they would signal a much needed change in the European consensus from the current limbo state we now face.

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