Tag Archives: rajoy

Galicia, Spain

Economy and budget woes, not regional independence, mark Galicia’s election campaigns

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Galicia, this Sunday, joins Euskadi (i.e., the Basque Country) in holding regional elections, each of which will have national significance for the center-right government of prime minister Mariano Rajoy.

But unlike in Euskadi and especially in the upcoming November elections in Catalunya, the election in Galicia isn’t about the increasingly polarized fight over regional autonomy and independence, but about the budget priorities of the national and Galician government at a time of prolonged economic duress.

In Galicia, Rajoy’s home region, polls have consistently shown that the center-right government of Galician president Alberto Núñez Feijóo (pictured above) will win by law the largest share of the vote, although it will need to win an absolute majority of the 75 seats in the Parlamento de Galicia in order to continue governing Galicia — the difference between 37 seats and 38 seats could mean the difference between government and opposition.

Since Feijóo announced the early elections last month, polling has shown remarkably stable support for Feijóo’s party, the Partido Popular de Galicia (PPdeG, the People’s Party of Galicia), the Galician branch of Rajoy’s own Partido Popular (PP, People’s Party).

But if the PPdeG wins less than 38 seats on Sunday, the three opposition parties could unite to form a leftist coalition.

For example, the center-left Partido dos Socialistas de Galicia (PSdeG-PSOE, Socialist Party of Galicia), the Galician version of the Partido Socialista Obrero Español (PSOE, Spanish Socialist Workers’ Party) and the nationalist Bloque Nacionalista Galego (BNG, the Galician Nationalist Bloc), a nationalist Galician party, which also tilts to the left, formed a narrow one-seat governing coalition from 2005 to 2009.  That coalition was Galicia’s first center-left government since the normalization of democratic politics in Spain in the early 1980s.

In addition, the Esquerda Unida-Izquierda Unida (EU-IU, the United Left), the regional variation of the stridently leftist Izquierda Unida (IU, United Left), essentially the remnants of Spain’s communist party, looks set to win its first seats ever in Galicia, reflecting a nationwide resurgence for the radical left in the wake of four years of economic depression, unemployment and increasingly stringent budget cuts from governments of both the center-left and center-right.

As such, the Galician election is the first major electoral test for Rajoy’s government, which is already unpopular in its first year after passing increasingly severe austerity measures.  If Feijóo loses the election, it will an incredible embarrassment, given that it’s Rajoy’s home base (he once served in the Galician parliament) and Galicia has long been a traditional center-right stronghold in Spain.

In some ways, the Galician election is for Rajoy and the PP what the earlier March 2012 regional elections in the left-leaning Andalucía region of southern Spain were for the PSOE.  In that election, the PP marked its best performance yet — winning three more seats than the PSOE.  Although the PSOE continues to govern in coalition with the Andalucian version of the United Left, and the PP did not win an absolute majority of seats, as some had predicted, it marked a low point for the PSOE in what should be its traditional stronghold. Continue reading Economy and budget woes, not regional independence, mark Galicia’s election campaigns →

Catalunya, Spain

Mas calls early elections in November for Catalunya amid growing calls for independence

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Artur Mas, the president of Catalunya (pictured above), called early regional elections yesterday, which are set for November 25, and which will now follow two other key regional elections in October — in the other two ‘nationalities’ of Spain, the Basque Country and Galicia.

The decision brings to the forefront of Spanish politics the question of Catalan independence during a period in which Spanish prime minister Mariano Rajoy is trying to balance increasingly harsh budget cuts against an economy mired in recession and 25% unemployment, trying to keep yields on Spanish debt from climbing too high (which surpassed 6% again this week) while also keeping his pledge never to seek a bailout from the European Union (a pledge that Rajoy seems increasingly unlikely to keep).

Mas’s decision amounts to the latest ploy in a game of chicken between Madrid and Barcelona, despite the fact that it’s a dangerous time for Spain (and for the eurozone) for either to be playing any such game.  After a month in which the eurozone seemed largely on the right track — a pro-European election result in the Netherlands, the European Central Bank’s decision to buy eurozone debt, the German constitutional court’s decision to endorse the European Stability Mechanism and optimism on Greece’s continued membership in the eurozone — a Catalan/Spanish showdown could spook bondholders into another round of eurocrisis.

The elections come more than a year early — elections were not due until November 2013 — and they come after contentious negotiations between Mas and Rajoy over a bailout for Catalunya.  At a time when many regional governments are struggling, Mas’s regional government is seeking a rebate of up to €5 million for Catalunya and a ‘fiscal pact’ under which Catalunya could levy its own revenues to be used solely in Catalunya.  This comes in the shadows of strident pro-independence sentiment, with up to 2 million Catalans participating in pro-independence marches (pictured above) on September 11 earlier this month (that’s Catalan’s national day).

If Mas’s Convergència i Unió (CiU, Convergence and Union), a center-right and autonomist party, wins the election on the strength of a pro-independence wave, and if it garners an absolute majority in the 135-member Catalan parliament (the Parlament de Catalunya), Mas will have more leverage with Rajoy’s national government — and it seems likely that Mas and other Catalan nationalist parties will champion a referendum on either greater Catalan autonomy, a full declaration of Catalan nationhood or actual Catalan independence from Spain.  Some polls now show over 50% of Catalans support independence, which has risen dramatically during the Spanish financial crisis of the past three years — just as Germans balk at sending money to shore up Greek and Portuguese (and Spanish!) finances, Catalans balk at shoring up broader Spanish finances.

If he wins, though, the danger is that Mas will become the unlikely champion of an independence movement that is moving faster than he might otherwise have liked.  The snap elections only risk fanning the flames of Catalan independence further out of control of Mas, Rajoy or anyone in Spanish or Catalan politics.

Rajoy, who certainly has enough headaches of his own, has taken a largely conciliatory public stance, even as he looks for ways to isolate Mas at the federal level — in the broad fight between Mas and Rajoy over concessions to Catalunya, Rajoy has the support of his own party, the center-right Partido Popular (the PP, or the People’s Party) and the opposition leader, Alfredo Pérez Rubalcaba, the leader of the national center-left Partido Socialista Obrero Español (PSOE, Spanish Socialist Workers’ Party), as well as many of the regional presidents, who blanche at Catalunya getting a better deal than their regions.

Catalunya, the second-most populous region in Spain, with 7.5 million people and one of three ‘nationality’ regions (like the Basque Country and Galicia), has as strong a regional identity as the Basque Country — both have their own language and their own culture that were subdued during the Franco era.  The current surge in support for Catalan independence comes from the view that Catalunya, as Spain’s wealthiest — and most indebted — region, has subsidized other (read: lazier) regions that have mired Spain in its current austerity/recession trap, and that money transferred from Catalunya to the federal budget is money that could be better spent shoring up the Catalan budget.

Essentially, Catalan politics since the end of the Franco era has been traditionally a battle between two major parties:

Mas’s CiU (technically it is a federation of two similar parties) essentially ran Catalunya from 1980 until 2003 under the leadership of Catalan president Jordi Pujol. Although it technically won a plurality of seats in the 2003 and 2006 elections under Mas’s leadership, it won nearly an absolute majority in 2010, with 38.5% of the vote and fully 62 seats, just six seats short of such a majority.

The Partit dels Socialistes de Catalunya (PSC, Socialists’ Party of Catalunya) is the major center-left party in Catalunya, but remains much more federal in nature — it’s the Catalan variant of the national PSOE.  It controlled Catalunya’s government from 2003 to 2010 in coalition with two smaller parties.  It lost a significant number of seats in the prior 2010 election and holds 28 seats currently after receiving just 18% of the vote.

In response to Mas’s latest push, the PSC has called for a federal system, like in Germany (a call that has been met with something far less than enthusiasm from Rajoy’s government).

Meanwhile, five smaller parties also hold seats in the current Catalan parliament and will vie for support in the November elections: Continue reading Mas calls early elections in November for Catalunya amid growing calls for independence →

Galicia, Spain

Galicia regional elections will be the first test of Rajoy’s austerity measures

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Galicia’s premier Alberto Núñez Feijóo on Monday announced that his province, too, would join the Basque Country in holding early regional elections on October 21, rather than waiting for his term to run out in March 2013.

In so doing, Feijóo (pictured above, right) who hails from the center-right Partido Popular de Galicia (PPdeG, the People’s Party of Galicia), the local version of Spanish prime minister Mariano Rajoy’s Partido Popular (PP, People’s Party), has launched the first electoral test for Rajoy’s government, after just eight months in office.

Given Rajoy’s ties to Galicia and its status as a traditional PPdeG stronghold, it’s very much more fraught for Rajoy (pictured above, left) than the simultaneous Basque election, where two nationalist parties lead polls and where unique local and autonomy issues will figure nearly as much as national issues.

Rajoy’s party won the Spanish general election in November 2011, but his government is already facing mounting unpopularity as it’s made increasing cuts to the Spanish budget, notwithstanding an economy that’s back in recession — the economy has contracted by 0.7% so far this year and grew just 0.4% in 2011 — and an unemployment rate of 24.8%, as of June.

So far, Rajoy has pushed through at least four different austerity packages, designed to bring the Spanish deficit to just 6.3% of Spanish GDP, down from an 8.9% deficit in 2011.  Rajoy has raised the Spanish income tax rate, raised the Spanish value-added tax by 3% to 21%, eliminated tax breaks for home owners and reduced spending on education and health care — and that comes after two years of cuts implemented by the government of Rajoy’s predecessor, José Luis Rodríguez Zapatero.

For all its efforts, Spain is still straining under yields on its sovereign debt that rose from 5% (on 10-year bonds) when Rajoy entered office to 6.5% now, down from a crisis-level high of around 7.5% in mid-July.  So notwithstanding the harsh austerity, it seems more likely than not that Spain will seek a bailout from the European Union, possibly later this year — earlier in June, the European Central Bank intervened to provide funds for ailing Spanish banks.  That, too, has caused Rajoy to lose credibility after promising that he would never seek a bailout during his campaign.

The austerity push has affected the regions, which are responsible for cutting their own budgets to a combined 1.5% of GDP, and Galicia has not been unaffected by cuts at the regional level.

Since the end of the Franco era, the PPdeG has been out of power for just four years.  As such, it will be somewhat of an embarrassment if Feijóo and the PPdeG cannot win reelection in a region that’s historically been a bastion of Spanish conservatism — Rajoy himself is from Galicia and who once himself served in the Parlamento de Galicia.  Continue reading Galicia regional elections will be the first test of Rajoy’s austerity measures →

Basque Country, Spain

Snap Basque elections may return nationalists back to regional government

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With Europe expected to face its most tense times yet this autumn in its three-year-running eurozone crisis, and with Spain expected to seek a bailout from the European Union in the coming months, the Basque Country — a key autonomous region in Spain — is headed to the polls in October.

Patxi López, the president (or lehendakari) of the Basque government (pictured above), called early elections Tuesday.

The election for the 75-member Eusko Legebiltzarra (or Basque parliament) will be held on October 21.

So what’s likely to happen? And what will it mean for Spain?

Essentially, the fight will come down to a four-way fight: (1) López’s federalist Basque socialists, (2) the federalist conservatives, (3) the traditional Basque nationalists and (4) a new leftist coalition of Basque nationalists.  For now, at least, the chances that López will continue as lehendakari of the Basque Country currently seem slim.

López became lehendakari after the 2009 regional elections, when his party, the Partido Socialista de Euskadi – Euskadiko Ezkerra (the PSE-EE, or the Socialist Party of the Basque Country) joined in a coalition with the Partido Popular (the PP, or the People’s Party).  The López-led coalition marked the first time in the three decades of democratic elections in the Basque Country that the region had not been governed by the Partido Nacionalista Vasco (the Basque Nationalist Party or the EAJ-PNV — in Basque, the Euzko Alderdi Jeltzalea).

That coalition unraveled after the PP won the Spanish general election in November 2011 — the local PP leader Antonio Basagoiti demanded that López not use his position to oppose newly-installed prime minister Mariano Rajoy, who has accelerated budget cuts at the federal level.  López, however, has opposed Rajoy’s planned cutbacks, especially as regards health and education.  Without PP support, López’s government commands just one-third of the seats in the Basque regional parliament.

The election will be held the day after the anniversary of the permanent ceasefire agreed with the ETA (Euskadi Ta Askatasuna), an armed Basque nationalist group that had engaged in many shootings, bombings and kidnappings.  That ceasefire, agreed by then-prime minister José Luis Rodríguez Zapatero, a political ally of López, was one of the final landmarks of the Zapatero government before the Rajoy government replaced it.  López is certainly hoping that voters will have that ceasefire on their minds on voting day, and that they will give his regional government credit for greater security and stability.

In 1978, the Basque Country — like Catalonia and Galicia — was granted the status of a nationality within Spain, as Spain wrote its new constitution, lurched toward democracy and began to emerge from the brutal and federalist four-decade dictatorship of Francisco Franco.  But sentiment for autonomy and/or independence runs strong in the Basque Country, and that sentiment has all too often turned violent in the past, even after 1978. Continue reading Snap Basque elections may return nationalists back to regional government →

Spain

‘Politically bankrupt’ Rajoy running out of options in Spain

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Speigel International earlier this week described a bit of the hopelessness of prime minister Mariano Rajoy who, only eight months into a government that was supposed to allow Spain to turn the corner, is watching his country sink even further into crisis.

Read it all, but this part, in particular, struck me as particularly insightful:

For too long, the prime minister believed that his mere presence at the head of the government was enough to ensure that Spain would stop “being a problem and become part of the solution.”

Rajoy’s bet was that a win by his center-right Partido Popular (PP, People’s Party) over the center-left Partido Socialista Obrero Español (PSOE, Spanish Socialist Workers’ Party) would be enough to assure investors that Spain could make it through the crisis. Sure enough, Rajoy’s PP won 186 seats to just 110 for the PSOE, even after José Luis Rodríguez Zapatero, prime minister since 2004, made clear he was stepping down as prime minister.

But that hasn’t stopped the crisis — if anything, Spain’s nightmare has accelerated in the past eight months, which makes Spiegel‘s description all the more depressing:

And what has Prime Minister Mariano Rajoy done? He hasn’t given a television address or uttered so much as an explanatory or reassuring word to Europe or his people. Instead Rajoy, 57, has disappeared into his office at the Moncloa Palace on the outskirts of the capital Madrid. Some say that he spends his time there staring helplessly and powerlessly at charts. He meets with business leaders like Siemens CEO Peter Löscher in rooms decorated with modern art, and he has even met with Spanish trade union leaders for the first time, though it was after they had already spoken off the record with German Chancellor Angela Merkel. Others say that Rajoy is irritating his European partners with hectic phone calls.

This behavior doesn’t inspire confidence. It seems more like a declaration of political bankruptcy.

What went so wrong? Continue reading ‘Politically bankrupt’ Rajoy running out of options in Spain →

Spain

Spain set to seek European bailout this weekend

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If true, at least this would put Greece on the backburner for a while. From Reuters, which has the scoop:

Spain is expected to ask the euro zone for help with recapitalising its stricken banks at the weekend, EU and German sources said on Friday, becoming the fourth country to seek assistance since Europe’s debt crisis began.

Five officials in Brussels and Berlin said the finance ministers of the single currency area would hold a conference call on Saturday morning to discuss a Spanish request for aid, although no figure on the assistance has been set.

The Eurogroup, which comprises the 17 euro zone states, will issue a statement after the call, which is scheduled to take place before midday (1000 GMT), the sources said.

“The announcement is expected for Saturday afternoon,” one of the EU officials said.

The dramatic move comes after Fitch Ratings cut Madrid’s sovereign credit rating by three notches to BBB on Thursday, highlighting the Spanish banking sector’s exposure to bad property loans and to contagion from Greece’s debt crisis.

Spain, with a nominal GDP (as of 2010) of $1.4 trillion, dwarfs that of either Ireland (nominal 2010 GDP = $229 billion), Portugal (nominal GDP = $204 billion) or Greece (GDP = $305 billion).  It is the eurozone’s fourth largest economy, after Germany, France and Italy, and it is the world’s 12-largest economy.

So this bailout would go much further to the heart of the eurozone than the previous bailouts to Greece, Ireland and Portugal.

Spain’s growth has stalled (or has been in recession) since 2009 and unemployment was 24.3% as of April 2012.  Although Spain’s banks have been fairly conservative, and Spain ran a surplus (or a very modest deficit) for much of the prior decade, the bust of a construction and property-value boom has left it in the midst of a staggering economic decline that brought Mariano Rajoy and the Partido Popular (PP — People’s Party) to power in December 2011 after nearly a decade of rule by prime minister José Luis Rodríguez Zapatero, whose Partido Socialista Obrero Español (PSOE — Spanish Socialist Workers’ Party) took much of the brunt of Spanish anger about the sudden economic turn, after implementing harsh budget cuts in response to the reality of reduced revenues and rising anxiety among Spanish bondholders.

So just a little over half a year after taking power, it will be on Rajoy’s watch — Rajoy promised never to accept an aid package — that Spain seeks a bailout. Continue reading Spain set to seek European bailout this weekend →

France

Merkel’s new Grand Coalition

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Not to be outdone by Russia’s electoral shenanigans, Der Spiegel reports that German chancellor Angela Merkel has formed a broad coalition to oppose frontrunning French presidential candidate François Hollande.  The coalition includes not only British prime minister David Cameron, who most recently snubbed Hollande on a visit to London, but also Italian prime minister Mario Monti and Spanish prime minister Mariano Rajoy.

Although each of the four European leaders is more or less of the center-right, the greater sin is Hollande’s opposition to the austerity measures underlying last December’s EU-wide fiscal compact, not his innate leftism.

With polls showing Hollande still the overwhelming favorite to defeat French president Nicolas Sarkozy in the second-round runoff in May, I wonder whether Monti and Rajoy, who are presiding over two countries with high employment — even before the bite of austerity has yet to show its full force — will still be singing from the Merkel hymnbook later this year. Continue reading Merkel’s new Grand Coalition →