The pain in Spain falls mostly like the rain

By revoltingeurope
November 22, 2011

Yet another European government has been claimed by the bankers’ crisis on the continent. This time it was the turn of Spanish prime minister Luis Rodriguez Zapatero’s Socialists.

The landslide victory of the Popular Party was widely predicted in polls – as was the devastating defeat of the Socialists.

The Socialists’ 110 seats was their worst result since democracy was restored to Spain at elections in 1977.

The Popular Party, with 186 out of 350 seats, will have an absolute majority.

The Socialists were punished after overseeing soaring unemployment, public spending cuts, wage freezes on public-sector workers, cuts to pensions and curtailing sovereignty by changing the constitution to allow for a long-term deficit limit to be set on the budget.

The background to the demise of the Socialists was the collapse in 2007 of a private debt-fuelled economic model that had created an unsustainable housing market bubble.

In May 2010, after an initial attempt at reflating the economy, the administration of prime minister Luis Rodriguez Zapatero caved in to international speculative attacks and took a sharp right turn, imposing some of the most severe spending cuts in Europe.

The election results mean Spain will have a government that will have free reign to impose sweeping neoliberal reforms and further austere economic medicine on the country.

Prime-minister elect Mariano Rajoy’s plans are in perfect tune with demands from the speculators in the financial markets and with those of Germany’s Angela Merkel, the European Central Bank and the European commission.

Popular Party shadow finance minister Cristobal Montoro has stated that the new government will act hard and fast, introducing banking friendly reforms immediately.

The problem is, even the banks admit, further spending cuts on top of those already imposed by Zapatero risk tipping the country into recession.

“From a market standpoint, an absolute majority for the PP is just what the doctor ordered,” Nicholas Spiro of Sovereign Strategy told Reuters in London. “The risk, however, is that more retrenchment pushes the economy back into recession.”

The small but not insignificant bit of good news is the increase in the share of the vote to 7 per cent of the radical United Left party, which will have 11 seats in the new parliament, up from 2 seats.

United Left offered voters alternative polices for growth, led by publicly owned banks and an expansion of Spain’s disproportionately low public employment, financed by taxes on the rich and corporations, plus a radical overhaul of the political system that gives voice to smaller parties and brings decision-making closer to citizens.

In the week leading up to the elections, United Left’s campaign gathered pace as string of personalities from the world of arts and culture announced they had dropped their allegiance to the Socialists and were swinging openly behind the party.

Then 1,500 trade unionists – including from the UGT, which has long historic links with the Spanish Socialists – publically pledged their support.

But the big prize for this radical party led by communists was the country’s Indignados movement – the original occupation movement that exploded onto the streets and squares of Spain in the Spring.

In the event, United Left probably captured only a tiny proportion of their potentially huge vote, even though in many ways it was a natural choice for the “indignant ones.”

United Left sought to win over the movement with a call to “not to give a blank cheque” to the Popular Party by abstaining or spoiling their votes.

This approach, initially adopted by the Indignados in local elections earlier this year, reflected the view that all the political parties are the same.

By Sunday’s vote, the Indignados’ political strategies have moved on a bit.

For Democracia Real Ya, a network of activists at the centre of the movement, smaller new parties were seen as acceptable options.

Another strategy pursued by elements of the movement was tactical voting – recommending a particular party based on the arithmetic of ousting either one of the two main parties in any given constituency.

In practice, the “no nos representan” – they don’t represent us – slogan has led to defeat for the kind of change the Indignados have been seeking.

The right-wing Popular Party – a direct political descendant of the movement around fascist dictator Franco – stormed to power in the municipal and regional governments in May, and this led to a seemingly unstoppable momentum for this weekend’s national poll where they emerged all-conquering.

A clear manifesto – and either the formation of their own political party or a recommendation to vote for the party that was most closely aligned to their programme – would have been a way forward.

And if they had been mature enough to indicate the best possible available political option they would almost certainly have recommended United Left.

The Indignados’ often sketchy demands – including a stop to home repossessions, action over 40 per cent plus youth unemployment rate, protection of health and education services, curtailment of banking power and a more pluralistic political system – were already part of, or have since been largely incorporated into, United Left’s programme.

Instead, the defacto two-party system that the Indignados have opposed so vehemently has been confirmed. Worse, they’ve ended up with people who are the natural allies of bankers.

For all its faults, the Socialist Party isn’t the natural party of austerity and privatisation. However, for the Popular Party, this is a natural place to be.

After winning local elections in May they have among the most zealous in cutting critical services such as education and health that are delivered by regional governments.

And leader Rajoy has stated he wants to further limit parliament’s freedom to make decisions on economic policy by tightening up legislation – passed this summer with the Popular Party’s support – to impose a deficit cap.

And on the cusp of the election he announced plans for “cuts everywhere.”

Rajoy has warned that Spaniards face hard times ahead.

That much is true, but they won’t restore confidence in the country, as Rajoy claims. More austerity and power to bankers are policies that have already been shown to fail in Spain as they have elsewhere.