The Reign in Spain

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On November 20, the 36th anniversary of Francisco Franco’s death, the Spanish people – as has been the case ever since the first democratic elections following the Generalissimo’s death – turned out to the polls in huge numbers.  This time around they ousted PSOE, the Socialist Workers’ Party, after almost eight years of rule under Prime Minister Rodríguez Zapatéro.

Indeed the PSOE loss amounted to a near collapse. PP received 45% of the vote, its best result ever, and won an 11-seat majority in Congress and over 60% of the Senate. By contrast, PSOE plummeted from 44% to 29% of the vote, losing almost half of its Senate seats.

As elsewhere in Europe, the shift to the right has involved the rise of small, radical parties of both the left and the right. The Communist-led coalition United Left (IU) jumped from 2 to 11 seats and 7% of the vote, while the consolidation of Union, Progress and Democracy, a breakaway fraction of PSOE, got almost 5% of the vote, though only 5 seats in Congress.

In Spain, the issue is further complicated by the existence of separatist parties in Catalonia and the Basque country.  The new parliament will see the return of the terrorist organization ETA’s political wing, with 7 seats and a plurality in the Basque Country. ETA’s political wing was outlawed in 2002, but this time around both Zapatero and the Supreme Court turned a blind eye to ETA’s party as part of the socialist push for a political solution to ETA’s 40-year campaign of terror and intimidation.

As for Catalan nationalists, the traditionally moderate nationalist coalition CiU won in Catalonia and will increase its representation from 10 to 16 seats. Led by the controversial Antonio Durán i Lleida, CiU has called for Catalonians to rally around it in opposition to PP’s agenda. The cries of “independence!” by CiU supporters at the coalition’s Barcelona headquarters on election night suggest that its moderation is a thing of the past.

Backed by majorities in both houses of parliament and friendly regional governments, Mariano Rajoy, 55, the leader of PP since 2003, now has a unique opportunity to push his far-reaching economic reform agenda – most of it dictated by the European Union – which involves addressing mounting deficits, reactivating consumer and investor confidence in Spain, and, not least, tackling unemployment (which in recent years skyrocketed to 21%, over 40% among younger people).

Yet despite the country’s relative strong debt position, Spain’s declining retail sector, its high unemployment (which threatens the generous public pension system), and the collapse of several regional saving banks (whose boards were, until recently, filled by politicians, unionists, and aristocrats with little or no banking or financial training) make an economic comeback highly unlikely.  Spain’s economic crisis began a year before the fall of Lehman Brothers and has important endogenous factors that have been overlooked and even denied by the Socialists, but that have been highlighted by Rajoy, who during the campaign emphasized the Zapatero government’s incompetence and dishonesty.

Though Rajoy has made it clear that he doesn’t expect to perform miracles, he plans to reform the labor market, lower corporate taxes, keep income taxes at present levels, make across-the-board cuts (except in the pension system), harmonize business, trade and environmental regulations among regions (whose disparity is a hindrance to foreign investment and often violates EU policies), pass a balanced-budget law, and allow regions to privatize or even shut down deficit-ridden TV and radio stations and other non-essential services.  He will also replace the current “progressive” educational system with a more demanding, merit-based system.

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  • Steve

    Friends of ours in Madrid said the Socialists openned up the gates to a huge influx of Muzzies, even building large public housing projects to acccommodate them. Radical Left policy is an expression of the West's death wish….See Spengler, volume II for the details.

  • InRussetShadows

    Maybe the Spanish voters have grown up. Here's hoping.

  • Sooke

    Why is lowering or eliminating the minimum wage never mentioned as a solution?

    Given the horrendous unemployment rate of over 20%, this seems like the obvious first step.

    I would also NOT restrict employers from lowering existing wages.

    Those currently employed will then share the pain of the unemployed.

  • jacob

    Weren't the Muslim teror attacks on the Madrid subway th reason for the people
    to elect the socialists ???

    No one would expect the socialist PSOE to act against the Muslims but what is
    written above certainly makes people puke…

    Is the PP going to do anything about ???

    "AL ANDALUS ????