Although
the political and business elites of Spain seem unaware of the fact, it appears
that the European Monetary Union has destroyed yet another country’s political
system. The elections in Spain last Sunday have yielded unclear results and
much confusion domestically and abroad. The German cabinet is so perplexed that
their spokesperson has declared that they do not know whom to congratulate for
the electoral results. Shocked and confused, the Spanish establishment are
still trying to digest the unsavory menu served by last Sunday’s elections. Only
one thing is clear: it will not be easy to form a government in Spain. This is
the first time that Spanish citizens went to bed after a general election not
knowing who their next president of the government was going to be.
The
following table shows the results in votes and seats. As expected, the two new
upstart parties, Ciudadanos and Podemos made it into the Cortes with a large harvest
of new deputies. Neither had representation in the Cortes until now. Remember
that the latter did not even exist a year ago so their feat is the more
astonishing.
Table 1. Electoral results and seats in the two houses
of the Cortes by political party.
Pollsters
faced an unprecedented challenge trying to forecast the outcome of the
elections. It was clear that these new parties were going to collect a
significant number of votes but there was no precedent on how to predict the
electoral results, especially because there were many citizens who were
undecided on the eve of the elections. Nevertheless, polls in the last week
before the election were not too far off. Their biggest mistake was their estimate
for Ciudadanos. Two weeks ago, some opinion polls were projecting that they could
come in second ahead of the Socialist. However, they gained only 40 seats with
3.5 million votes, not a minor feat. Many cynically wondered if the pollsters had
confounded their wishes with reality.
The
conservative party, PP, came in first with 28% of the vote, as predicted, but
it was a Pyrrhic victory: they have lost more than 3.6 million votes after
amassing an unprecedented level of support in the previous elections of 2011. The electoral system, where a small number of
deputies represents many underpopulated provinces, gives the party coming in
first a premium. Thanks to the distortions in the system, the PP got a portion
of the seats in the lower House larger than its share of the vote as well as control
over the Senate. Nonetheless, many of the PP’s former supporters did not buy
the narrative of the economic recovery and corruption scandals angered many
center right voters who turned to Ciudadanos instead. We ask ourselves if
Mariano Rajoy has any remorse regarding their lack of empathy toward the
victims of the economic crisis and the austerity policies or their tepid response
to the constant flow of corruption scandals affecting his party.
In the left,
the Socialdemocrats of PSOE obtained their worst result in their history since
the return of democracy. However, given that opinion polls were predicting an
even more catastrophic outcome for them, the party bosses were actually
relieved and their leader, Pedro Sánchez, did not have to resign on the same
night of the elections. They managed to retain some of their historic
strongholds in Andalusia and Extremadura but they have become irrelevant in
major regions such as Madrid, Catalonia and the Basque Country.
One wonders
if the Socialist leadership is not embarrassed to see their party hemorrhage 5.5 million votes in less than 11 years. One
further wonders if they are asking themselves the right questions about what
they have done wrong. Sadly, for them, the initial response of president
Zapatero to the Global Financial Crisis, a major stimulus package, was the
correct one. In fact, the economy had started to recover in 2010. However, Zapatero’s
quick submission to the austerity policies imposed by the Merkel-Trichet-Sarkozy
hydra destroyed his party’s credibility. They now only retain the loyalty of
aged working class voters. They have paid dearly for their Europeanism. Audaces
fortuna iuvat; if
they had shown some muscle before the demands of the European institutions in
2011 they might have retained the loyalty of the voters who have now abandoned them. For a party that wants to win elections in the leftist electorate being seen as a supporter of austerity is suicide; everybody knows that austerity leads to regressive distributions of income and wealth.
Looking at
their faces when party leaders were making their statements on the night of the
elections it was clear that only Pablo Iglesias, the leader of the Podemites, was satisfied. With 69 seats,
they are now only 340,000 votes shy of displacing PSOE as the main party in the
left. It was a bit odd that Pablo Iglesias drew several red lines as a
condition for agreeing to a coalition with the Socialists. These include a
change in the electoral system to make it more proportional, a referendum for
the self-determination of Catalonia and shielding several social rights —such
as the right to a home and public healthcare in the Constitution—. One would
have expected that they would have put the emphasis on jobs and getting people
out of poverty. The condition of a referendum in Catalonia is likely the price
paid to include the supporters of the mayor of Barcelona in Pablo Iglesias’
coalition. The outcome of Podemos was spectacular in Catalonia where they came
in first, displacing pro-independence parties who together got less than 35% of
the vote in that region. Many citizens of that region want a referendum but not
necessarily independence so, perhaps, other parties would be wise to consider
this solution to the Catalan independence soap opera. Podemos also came in first
in the Basque Country and Navarra, again displacing nationalist and regionalist
parties who have dominated politics in those regions for decades; this is one
of the most unexpected and interesting outcomes of these elections.
If Podemos
had formed a coalition with Alberto Garzón’s Unidad Popular platform, led by Izquierda Unida (IU), they would
have had gained an additional 14 seats, enough to form a left-wing coalition a la Portuguesa with PSOE. However, they
ran separately and the electoral system has pummeled IU: only two seats despite
receiving more than 900,000 votes. Many now blame Garzón and Iglesias for
letting their egos get in the way of a radical anti-austerity coalition.
We now have
the most fragmented Parliament in Spain’s history and this complicates the
formation of a stable government beyond belief. An opinion article in El País
read, “Welcome to Italy… but without Italians to manage it”. The Congreso de
los Diputados or Lower House has 350 members. A candidate to form a government
needs to win at least 176 thereof in a first vote or more ayes than nays in a
second pass. It is hard to see which leader has the capacity to muster a stable
coalition with the required level of support. The following table shows how
many seats each potential coalition would total.
Figure 1. Potential parliamentary
majorities.
Clearly,
Mariano Rajoy cannot form a center-right coalition with the sole support of Ciudadanos
as it would fall short of the required parliamentary majority. A center-right
coalition with the multitude of conservative nationalist and regionalist
parties is unlikely since the PP has few friends amongst those who want to
“break the unity of Spain”. A left-wing block is not easy to form either.
Podemos, after all, is integrated by local coalitions in some regions, so they
need to convince too many parties with conflicting agendas. Some “barons” in the
PSOE have warned that they will not support a coalition with the “radicals” of
Podemos who want to question the sovereignty of Spain in Catalonia. In any
event, this left block would still
fall short of the 176 votes needed. A rainbow coalition of left wing, regionalist
and nationalist parties would also be challenging to manage. It is hard to see
those who want independence of Catalonia in a coalition with the Socialist
party.
Will we see
a German style “Gross Koalition” of PP, Ciudadanos and PSOE? This would probably
be the preferred choice of the European Commission, Mario Draghi, Angela Merkel
and many in the Spanish establishment. However, it would be suicide for the
Socialist: in two years’ time, Podemos would be the new Syriza and PSOE would
follow the path of the now practically defunct PASOK. Pedro Sánchez has already
declared that he will not support a cabinet led by Mariano Rajoy. Another
scenario is that the PSOE allows the PP to govern, conditioned to a
constitutional reform. The new magna chart would have to be endorsed in a
referendum followed by dissolution of the Cortes and new general elections;
probably in less than two years. Many, especially in the left, want constitutional
reform to address the Catalan issue and shield some social rights in a nation
traumatized by the dire consequences of austerity. The problem is building a
consensus in the now fractious Cortes on what that new text should look like.
In any event, with its control of the Senate, the PP can turn down any
amendment to the constitution that is not to its liking.
The King
has two months to propose a candidate who can secure a mandate. If no candidate
earns the confidence of the Parliament, the monarch will have to call elections
again. Spain has entered into unchartered territory since there is little
experience with coalition governments that are more common north of the
Pyrenees. The only thing clear is that the new government will have very little
legitimacy to do anything meaningful, let alone Brussels style structural
reform.
We hope
that Brussels, Frankfurt and Berlin have picked up the message that their
austerity, internal devaluation and structural reform recipe has failed to
deliver and is self-defeating. The policies sponsored by the European leaders
and dutifully applied by the two-party system led to appalling unemployment
—the rate reached 27%; more than 50% in the youth— eviction of hundreds of
thousands from their homes and sunk 30% of the population under the poverty
line. The parties who applied them are now at risk of disappearing from the
political scene to be replaced by upstarts. It is unlikely that a new
government will now have the stomach to force down more “bitter pills” down the
throats of their citizens. Spaniards want growth and jobs, not reforms without
results.
Stability
has vanished from the Spanish political system. In return, however, political
life may become more democratic, interesting and transparent. We might also witness
the formation of a Southern front within the EU.
