The Reign in Spain

The socialists are out. What lies ahead?

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.

As for international affairs, Rajoy has lamented that foreign policy under Zapatero has been characterized by “too much Palestine and too little attention to Western democracies.”  He will thus likely return to Aznar's pro-Americanism and try to strengthen ties to conservative governments elsewhere in Europe. “Spain,” he has said, “will cease to be a burden on the EU and once again will become a faithful, reliable, diligent member.”  There will be no more friendly visits to Cuba, no more warm welcomes for representatives of the Palestinian National Authority, and no more lobbying to take Hamas off the EU's list of terrorist organizations.

This market-friendly, socially moderate plan will surely face strong socialist opposition.  The PSOE, however, is deeply embedded in infighting.  Rajoy's opponent in the election, Pérez Rubalcaba, seeks to replace the retiring Zapatero as party leader. Some party members prefer Defense Minister Carma Chacón, one of Zapatero’s new breed of young and attractive (though deeply shallow and incompetent) socialists. The same goes for Patxi López (52), president of the Basque Country regions, whose policy of reaching out to ETA’s political wing failed badly.

Then there's Tomás Gómez (43), the socialist leader in Madrid (where the PSOE had its worst election ever) and former mayor of Parla (pop. 120,000), which he left on the brink of default.  In the wake of this disaster, one-quarter of Parla''s municipal civil servants have been fired and some city services, such as public transport, are collapsing because workers aren't being paid.  All this is the result of socialist incompetence, not economic crisis.  The once promising Gómez is now, it appears, a falling star.

For the socialists, then, the options are wide open.  Perhaps another young leader will emerge, or a former regional president unseated by PP may run.  The question is whether the socialists will opt for the radical left-wing agenda proposed by Rubalcaba during the campaign – namely, across-the-board tax hikes, more government intervention in the economy, more affirmative-action policies, no labor-market reform, and refusal to comply with the EU’s demands for austerity, deficit reduction and debt repayment – and thus further alienate the PSOE from Europe, or will try to lure back voters with a more reasonable approach.

An even bigger question is how the Spanish people will respond to the painful cuts ahead. Yes, voters understood they were voting for austerity – but many Spaniards simply don't know what economic cuts feel like because they've spent most of their lives in prosperity. Many commentators have likened Rajoy’s speeches to Churchill’s 1940 “blood, toil, tears and sweat” address. Most Spaniards, especially the young and the urban, seem to like the lyrics – but will they be prepared to dance to a new, less exuberant, more sober beat?

Golmar is a political scientist and translator based in Madrid.

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Tags: Spain