First Post-Brexit Test, Spain Chooses Stability Rather Than Growth
Published on Forbes, Jun 27 2016
In Europe’s first post-Brexit general elections, Spaniards on Sunday delivered some of the stability that the still shell-shocked Continent says it wants just now. But what the Eurozone’s fourth largest economy needed was free market reform, not immobility, which means the long term still looks bleak for Spain.
Which isn’t to say there wasn’t good news. Leftwing populists promising to bring Venezuela’s “miracle” back to the Mother Country suffered a severe setback. And, given what was on offer, it is to be welcomed that the Partido Popular again was the top vote-getter.
Undeniably, the big winner was Prime Minister Mariano Rajoy, whose conservative PP won a third of the popular votefor 137 seats in the 350-seat lower house. For the PP, it was a marked improvement over the 123 seats it won in last December’s elections on 28% of the vote.
Rajoy had called the July 26 elections after the December polls delivered a hung parliament and no party was able to form a government. After winning 700,000 more votes than six months ago on Sunday (all the other parties actually lost votes) it will be hard to argue that the PP should not form the next government, even if voters delivered a hung parliament again.
The PP’s victory was geographically widespread, an important achievement in a country as regionally divided as Spain.
Rajoy won 40 of Spain’s 50 provinces. He even won the southern region of Andalucia, traditionally the Socialists’ breadbasket. The PP notched absolute majorities in Rajoy’s regional redoubt of Galicia, in the wind-swept and rainy northwest, as well as in both Castiles, the cultural heartland of the country.
Even better news for free market advocates is that Podemos, the neo-Marxist party with ties to Venezuela’s chavismo and the Iranian mullahs, failed on its promise to vault over the Socialists and become Spain’s second-largest party, and the biggest one on the left.
Despite polls suggesting that Podemos would be able to deliver on its promise, the Socialists (the PSOE in its Spanish-language initials) remained Spain’s Number 2 party, winning 85 seats on 23% of the vote. The result was five fewer seats than in the outgoing parliament and the PSOE managed to lose 100,000 votes, throwing into question the future of party leader Pedro Sanchez.
But it remained ahead of Podemos, which suffered its first electoral setback after experiencing remarkable growth for the last two years, a phenomenon that had worried many within and outside of Spain. Podemos leader Pablo Iglesias, a university professor who refuses to wear a tie even when he has an audience with King Philip VI, was forced to be uncharacteristically contrite in his comments.
“I must say that this evening’s results are not satisfactory for us. We had different expectations,” Iglesias said.
Podemos had promised to restructure Spain’s massive debt, end Rajoy’s already mild spending cuts and copy France’s economically destructive 35-hour work week. So no wonder that investors, realizing that Podemos’ threat had been checked at least momentarily, cheered Iglesias’ consternation.
Spain’s top stock market, the Ibex 35, rose initially on the electoral news Monday, before reality set in anew that Britain, one of the EU’s solvent economies, had voted to leave the bloc.
But Podemos’s defeat, as important as it is, has come at a high price in a country where fully one fifth of workers are unemployed and which needs to cut back on a generous welfare state. Dependent on other parties to govern, and led by the cautious Rajoy, the PP is unlikely to undertake needed reforms.
As Rafael Bardaji, national security advisor to Rajoy’s predecessor Jose Maria Aznar, wrote Monday in a caustic commentary for Libertad Digital, “conservatism has lost miserably in Spain. PP voters have renounced their principles in exchange for putting the brakes on Chavismo.”
“The PP of the next few years will consolidate as the social-democratic party that it already is,” added Bardaji. Its strategy of “it’s either us or radicalism” may have won the day, but it will lead to a dearth of ideas.
Bardaji is confident, however, that after a period of reflection, conservatives will be able once again to take the PP away from the forces of stasis. As he recalled, Rajoy’s “victory” paled in comparison to what Aznar, Spain’s last true conservative, won in his years in office. His 2000 reelection won Aznar more than 44% of the vote and an absolute majority.
So, yes, let’s celebrate Podemos’s defeat, but let’s not get too euphoric about the PP’s chances.
Mike Gonzalez, senior fellow in The Heritage Foundation’s Davis Institute for International Studies and the author of “A Race for the Future” How Conservatives Can Break the Liberal Monopoly on Hispanic Americans.”