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Andrzej Kohut  17 lipca 2019

Earthquake in Spain

Andrzej Kohut  17 lipca 2019
przeczytanie zajmie 9 min

For years, the Spanish political scene has been ruled by a simple division. Since 1982, either socialists (PSOE) or conservatives (PP) were in power. And although their results were changing from one election to another, one thing never changed: both parties gathered around 80% of the votes in total. The remaining parties could rarely reach more than 5%. Meanwhile, the April elections, although won by socialists, have yielded more than 10% support for as many as four other political forces. Adding the fact that these were the second early elections in a row in just three years, and the unprecedented impeachment of the Prime Minister by the united opposition forces, it seems clear that Spanish politics are undergoing a revolution.

Spanish miraculous houses

The history of the political earthquake in Spain begins with the construction of houses. In 1999, the country joined the newly-emerging euro area, where the European Central Bank set low-interest rates, based on the strength and stability of the German economy. For the average Spaniard, this meant that all loans became cheaper than ever before. At the same time, Spanish banks, having succumbed to the prevailing worldwide trend at the time, willingly granted high loans, also to people with no credit history.

The construction boom was soon to follow – in 2006, more houses were built in Spain than in Great Britain, France and Germany combined. The prosperity in the construction sector has provided new jobs, and the enrichment of society has increased revenues to the state budget (there was even a surplus, which reached 2% of GDP in 2006).

The idyll lasted until 2008. Over a few months, the global crisis caused housing prices to plummet by several dozen percents. Unemployment skyrocketed, and the socialist government tried to save the failing construction sector with budget money. It had consequences – instead of a surplus, the budget recorded a deficit (11% of GDP in 2009), and the rating agencies mercilessly lowered their assessment of the Spanish economy, instilling panic among foreign investors. The prolonged crisis is the background for changes on the political scene in 2011 – for now, however, this happens within the existing party duopoly. Accusing the socialists of causing the crisis, voters decide to go conservative, voting for Partido Popular, and Mariano Rajoy becomes the head of the government.

„Those who think that Spain will not be able to carry out the reforms it needs to succeed in the Europe of the euro have got it totally wrong” – Rajoy stated in his expose. He waited for this moment for a long time. Already in 2004, the resigning Prime Minister Aznar appointed him as his successor. However, the socialists won the election, and Zapatero became the new prime minister. It was only the prolonged crisis that allowed him to reach for power.

The moment was not favourable. The agreements his predecessor had signed with the EU obliged the country to reduce the deficit quickly, which could be achieved in two ways: cutting expenses or raising revenues through tax increases. Rajoy was soon forced to reach for both means.

Conservatives quickly froze wages in the public sector, reduced the unemployment benefits by half, reduced budgets of regional governments, and raised VAT by 3%, which was in clear contradiction to their election promises. These are only some of the drastic methods the government was forced to implement to meet EU expectations. As one might expect, this was not received with enthusiasm by the country’s public opinion, although a real image disaster for the new prime minister was yet to come.

Corruption and another crisis

Rajoy’s government was destroyed by the „gürtel” (belt in German) scandal. In 2009, dirty ties were revealed between a group of businessmen, represented by Francisco Correa Sanchez (correa meaning belt in Spanish) and the politicians of the conservative party. Investigation in this matter lasted for several years, but politicians managed to undermine its significance for a long time and limit the consequences for electoral results.

The breakthrough happened in January 2013.  The centre-right daily El Mundo announced that Luis Bárcenas, a former senator and treasurer of the conservatives, had millions in Swiss accounts and used them, among other things, to pay abundant bonuses to party leadership. Not two weeks later, another journal, the leftist ‚El Pais’, published the content of Bárcenas’ hand-written notes regarding the management of funds deposited in Swiss banks. These showed that large amounts went to the current prime minister, Mariano Rajoy.

From then on, the investigation into corruption has become one of the major topics in Spanish politics. It turned out that the conservative party has been conducting double-entry bookkeeping for nearly 20 years. The Prime Minister himself admits mistakes in his address before the parliament but denies having known about corrupt practices. He soon also testifies before the court as a witness. For the first time in the history of Spain, the head of government takes part in a criminal trial. It, however, did not stop him from winning the next elections in 2015 and 2016. It was only the gürtel affair, announced in May 2018, to change the course of action.

Severe sentences are given to the main characters of this ordeal: Francisco Correa Sanchez has been sent to prison for 51 years and Luis Bárcenas for 33. The latter is also charged a fine of over EUR 40 million. Partido Popular was also fined for participating in the corruption of public procurement. It is the first such case in the country’s history. Financial penalty, however, is not much when one considers the political consequences for conservatives.

Pedro Sánchez (leader of the socialists, who were then occupying only 85 out of 350 total seats in the Congress of Deputies), leads to the formation of an alliance, which besides his party, includes representatives of the radical leftist party Podemos, as well as representatives of the Basque Country and two parties from Catalonia. The combination of these forces allowed for recalling the conservative prime minister and appointing Pedro Sánchez in his place. This way, without calling elections, power goes into the hands of the opposition. However, this would not have been possible, had it not been for new parties, such as Podemos, entering the political scene and reaching for Catalonian groups.

A breath of fresh air

The conservatives were entering the December 2015 elections burdened with a four-year struggle against the crisis and a massive corruption scandal among their ranks, which was still under investigation. This was visible in the outcome – Rajoy’s party has lost over 60 seats, losing an independent majority. However, the vacated seats were not taken over by socialists – as the Spanish system’s logic so far would have commanded.

Not only did socialists not get these seats, they also lost some of their own! The resulting gap was filled by two new groups: leftists from Podemos (Spanish We Can) and center-right Ciudadanos (Spanish Citizens). Many Spaniards resolved to express their opposition to the status quo, but the change that followed turned out to be different than expected.

The conservatives still had an advantage, but despite several months of efforts, the majority government was not formed. New elections were announced in late June 2016. This time the conservatives managed to gain a dozen or so seats, primarily at the expense of Ciudadanos, but again, they were far from reaching an independent majority. Both new parties recorded a decrease in support.

In order not to lose any further to the prolonged crisis, the Ciudadanos decided to support the formation of Rajoy’s government. This, however, still came short of providing the parliamentary majority. The crisis has intensified. This led to a conflict inside the socialist party and Pedro Sánchez’s resignation from the leadership role. The party’s temporary authorities decided to allow Rajoy to form a government. On October 29, 2016, most socialist MPs abstained, and Rajoy was able to lead the government for the second time. After 314 days Spain had a government again. However, stabilization only lasted a year and a half.

The Catalonian bomb

Quiere que Cataluña sea un estado independiente en forma de república? (Do you want Catalonia to become an independent state with a republican system?) was the question the inhabitants of this region of Spain saw on their voting cards on October 1, 2017, when they decided to participate in the independence referendum, which the authorities in Madrid declared illegitimate and decided to send police troops to discourage people from voting. The methods used were various, often brutal. Despite this, over 40% of those entitled to vote appeared in polling stations, and 90% of them voted for independence.

There was a stalemate in which Rajoy’s government demanded an unambiguous declaration of whether secession had occurred, and the Prime Minister of Catalonia, Carles Puigdemont, hesitated. On October 27, the Catalonian parliament proclaimed the republic, and in response, the Spanish parliament dissolved that legislative body and dismissed the local government. A European arrest warrant was issued for Puigdemont and other Catalonian leaders. The region’s autonomy has been suspended.

The Catalans failed to achieve independence. Despite this, Catalonia’s representation gained considerable relevance in Spain’s central bodies: Catalonian parties became an important element of Sánchez’s coalition and thanks to them, dismissing the Rajoy government and appointing a new prime minister was possible. However, this was an expensive alliance for socialists. In February 2019, the Catalans made their support for the new budget dependent on the possibility of holding a new, this time legal, independence referendum. The government could never agree to this, and the new elections became necessary.

A new hand, old problems

The most interesting issue of this year’s parliamentary elections, along with the Socialist’s result in comparison to their high expectations, was the result reached by a new force – the right-wing Vox party, which achieved its first success in the local parliament elections in December last year. A dozen or so Vox deputies co-rule there together with conservatives and Ciudadanos. There have been calculations that such a coalition might go nation-wide, leading to the next majority of the centre-right government, following a short break. It failed. For the first time since announcing the verdict in the gürtel affair, the conservatives were verified at the national level, and this test was rather dramatic: they lost over half of the seats in the Congress of Deputies (the lower chamber of the Cortes Generales). Vox, however, turned out to be weaker than expected.

Socialists have achieved electoral success and increased their relevance. It does not mean a comfortable situation for Sánchez. To reach a majority, he not only needs Unidas Podemos votes (who lost significantly in the election), but also will be forced to seek the support of the Nationalist Basque Party and among the two Catalonian parties. The minority socialist government, though stronger following the elections, will be forced to function based on the same uncertain agreement as before.

The parliamentary crisis, related to the collapse of the domination of the two parties, will continue. The Catalans can still tip the scales, seeking support for their independence postulates. The downfall of conservatives and the radicalization of social sentiments will favour the increasing support for Vox or other radical options. This, in turn, means further political turmoil. The new political shape of Spain is still to emerge.

Polish version is available here.

Publication (excluding figures and illustrations) is available under Creative Commons Attribution 4.0 InternationalAny use of the work is allowed, provided that the licensing information, about rights holders and about the contest "Public Diplomacy 2019" (below) is mentioned.

The publication co-financed by the Ministry of Foreign Affairs of the Republic of Poland as part of the public project "Public Diplomacy 2019" („Dyplomacja Publiczna 2019”). This publication reflects the views of the author and is not an official stance of the Ministry of Foreign Affairs of the Republic of Poland.