Tag Archives: Zapatero

Basque Country, Galicia, Spain

Pressure builds on Sánchez as third Spanish election looms

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(EFE)
Felipe González, right, a respected former four-term prime minister, has called on Pedro Sánchez, the current PSOE leader, to allow a conservative minority government. (EFE)

Felipe González was just 41 years old when he became, in the view of many Spaniards, the most consequential prime minister to date in post-Franco Spain.galiciabasqueSpain_Flag_Icon

Across a span of 14 years in power, González, the leader of the center-left Partido Socialista Obrero Español (PSOE, Spanish Socialist Workers’ Party), won four consecutive elections, normalized the rule of law and the traditions of democratic participation in Spain, brought the country into what was then the European Economic Community, the forerunner of today’s European Union, and shepherded Spain into NATO as a firm member of the transatlantic military and security alliance.

Today, while Spaniards take for granted many of those accomplishments as pillars of the Spanish state, González is also now remembered for the levels of corruption that sank his final government and a botched attempt to combat armed Basque nationalists.

But he’s still the first among Spain’s elder statesmen, in many ways as influential as the former king, Juan Carlos I, who abdicated in 2014 in favor of his son Felipe VI. In truth, the two are more responsible than anyone for Spain’s vibrant democracy today.

Third election a Christmas miracle?

As his country enters its 10th month without a government, voters may worry that Spanish democracy has become a bit too vibrant in recent years, as a strong two-party political system has crumbled into a four-party state with myriad regionalist parties from all corners of Spain, its two-party system dissolved under the penumbra of depression-level GDP contraction and unemployment.

That’s why, after two elections, the first in December 2015 and the second in June 2016, no party can quite cobble together the necessary majority to form a government. If Spain’s party leaders cannot unlock a breakthrough by the end of October, the country will head to the polls for the third time in 13 months, possibly even on Christmas Day 2016.

González, who has doled out criticism for all of Spain’s political leaders, is one of the few PSOE figures publicly urging his party and its young leader, Pedro Sánchez, to concede its fight to deny another government under conservative prime minister Mariano Rajoy. In his view, Spain would suffer greater damage from a third general election in 13 months — as polls show that yet another snap election would result in essentially the same deadlock as the last two. In a country where turnout of 75% or more isn’t uncommon, turnout dropped from 69.7% in December to just 65.7% in June, and it could fall even lower, to 63% or worse, with another snap vote. Generally speaking, Spanish observers believe that will boost the PP, at the expense of the PSOE and Podemos, the leftist, anti-austerity movement that formed in 2014 out of the indignados movement of Spain’s masses of unemployed workers.

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RELATED: PSOE’s incentives point to PP-Ciudadanos minority government in Spain

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Another election in Spain would come as both Germany and France face national elections in 2017 with rising eurosceptic sentiment. It would come weeks after a make-or-break referendum on constitutional reform that’s seen as a plebiscite on Italian prime minister Matteo Renzi, and as the United Kingdom, under its new prime minister Theresa May, maneuvers to leave the European Union after its blockbuster June 2016 ‘Brexit’ vote. It could fall just days after the United States might elect businessman and reality television star Donald Trump as its next president.

So the last thing Spain’s leaders (and European and American leaders) want is another inconclusive vote and prolonged uncertainty that could threaten the slight economic growth that Spain’s generated in 2015 and 2016 and that has left the country without a government to implement a budget for the next year or provide leadership in ongoing post-Brexit debates over the European Union’s future.

Rajoy fails to win investiture vote

Prime minister Mariano Rajoy has continued to lead a caretaker government since last December. (Facebook)
Prime minister Mariano Rajoy has continued to lead a caretaker government since last December. (Facebook)

The latest despair comes after another failed attempt by Rajoy to retain power. Although his conservative Partido Popular (PP, the People’s Party) won the greatest number of seats in the most recent June election (indeed, a 14-seat increase from the December election), he has twice failed to win two confidence votes since the end of August, with a majority of the Chamber of Deputies (Congreso de los Diputados), the lower house of the Spanish parliament, blocking Rajoy’s investiture. Continue reading Pressure builds on Sánchez as third Spanish election looms →

Spain

Spain readies for historic, four-way election on December 20

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Spain's new young king, Felipe VI, may ultimately shape his country's new country from the Palacio Real if the unprecedented four-way race leaves no party with a majority after December 20.
Spain’s new young king, Felipe VI, may ultimately shape his country’s future from the Palacio Real if the unprecedented four-way race leaves no party with a majority after December 20.

Five days before the Christmas holiday, Spanish voters will go to the polls to choose a new government in an election that’s being hailed as the country’s most important since 1982.Spain_Flag_Icon

Indeed, voter turnout may well exceed the 80% levels not seen since 1982, when Spain had only just emerged from its Francoist dictatorship and was four years away from joining the European Economic Community, the predecessor to today’s European Union. Moreover, it will also be the first general election to take place under Felipe VI, whose father Juan Carlos I abdicated in June 2014 after guiding the country’s transition to democracy in the mid-1970s.

But what makes the December 20 election so unique is that economic crisis has shattered Spain’s stable two-party electoral tradition, leaving a four-way free-for-all that could force unwieldy coalitions or a minority government at a time when the country has only just started its economic recovery. Distrust in both major parties, moreover, has opened the way for a popular far-left movement at the national level and greater discord at the regional level, most notably in Catalonia, where support for the independence movement is growing. No matter who wins power in the eurozone’s fourth-largest economy, the next Spanish government will face difficult decisions about GDP growth, lingering unemployment, and federalism and possible constitutional change.

For decades, Spanish elections were essentially, at the national level, a fight between the conservative Partido Popular (PP, the People’s Party) and the center-left Partido Socialista Obrero Español (PSOE, Spanish Socialist Workers’ Party). In the most recent 2011 election, the PP won 186 seats in the 350-member Congreso de los Diputados (Congress of Deputies), the Spanish parliament’s lower house, while the PSOE won 110 seats.

Both parties can point to massive successes over the past three decades. Under longtime PSOE prime minister Felipe González, Spain consolidated its liberal democracy and benefited greatly from closer economic and financial ties to Europe, while Barcelona’s emergence as the host of the 1992 Summer Olympics catapulted it into a world-class city. Under conservative prime minister José María Aznar, Spain joined the core of western European countries as a founding member of the eurozone in 2002 and developed widening security ties with the United States. When the PSOE returned to power in 2004 under José Luis Rodríguez Zapatero, the government enacted same-sex marriage in 2005 and later negotiated a peaceful ceasefire with the paramilitary Basque nationalist group Euskadi Ta Askatasuna (ETA).

The pain in Spain

Widespread anti-austerity protests, spearheaded by the 'indignados' movements mobilized even before the previous elections in 2011. (El País / Carlos Rosillo)
Widespread anti-austerity protests, spearheaded by the ‘indignados’ movements mobilized even before the previous elections in 2011. (El País / Carlos Rosillo)

But the global financial crisis of 2008-09 and subsequent eurozone crisis of 2010 knocked Spain off its pedestal.

Not unlike Florida, Nevada and parts of California in the United States, property values in Spain fell as rapidly as they once climbed, and an economy driven by construction and easy credit sputtered to near-depression levels of contraction. Despite running a more parsimonious fiscal policy in the 2000s than even Germany, Zapatero’s government soon found its expenses far exceeding revenues, and his government engaged in a series of tax increases and spending cuts.

The Spanish electorate ousted Zapatero in December 2011, ushering the People’s Party back to power under Mariano Rajoy, whose main goal was to prevent Spain from needing to seek an emergency bailout. Despite some scares over the Spanish banking system in 2012, Rajoy succeeded in keeping Spain bailout-free, but at the cost of ever greater spending cuts and tax hikes. The Rajoy government’s tough fiscal medicine, to some degree, has worked. Yields on Spanish 10-year debt have steadily fallen from a high of over 7.2% in July 2012 to less than 1.8% today. For a country without economic expansion since 2008, the Spanish economy returned to fragile growth in 2014, and it maintained growth throughout 2015 — notching 1% growth in the second quarter of this year and 0.8% in the third.

But voters are not enthusiastic about the prospects of reelecting Rajoy, a leader who never quite managed to win over Spanish hearts. Spain’s unemployment rate today is still 21.2%, a drop from the record-high 26.9% level recorded in early 2013. But that’s still a far higher jobless rate than anywhere else in the European Union (with the exception of Greece).

In the 2008 election, before the bottom fell out of the Spanish economy, the two major parties together won 83.8% of the vote. By 2011, that percentage fell to 73.4%. If polls are correct, that percentage could fall below 50% on Sunday, as both the PP and the PSOE struggle against the surging popularity of the anti-austerity Podemos (‘We can’) on the left and the liberal, federalist Ciudadanos (C’s, Citizens) on the right.

If the election were held today, the PP would win around 110 seats, the PSOE around  90, and Podemos and Ciudadanos would each win around 60, leaving none of them with a clear majority. The uncertainty of the four-way race has both energized the electorate (in  a manner reminiscent to those first early elections in the post-dictatorship era) and enhanced the chances of post-election uncertainty that both Greece and Portugal have endured this year.  Continue reading Spain readies for historic, four-way election on December 20 →

Catalonia, Spain

Madrid ignores Catalan vote at grave risk

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Though Sunday’s unofficial referendum on Catalan sovereignty may have been legally murky, it is nonetheless clear that Spanish prime minister Mariano Rajoy’s strategy of ignoring the groundswell of support for regional self-determination and autonomy has been a failure.cataloniaSpain_Flag_Icon

So what actually happened on Sunday — and where do the Catalan nationalist movement and the Spanish government go from here?

What happened in Sunday’s ‘consultation’ vote

2004155Photo credit to AFP.

Catalans voted in a non-binding, unofficial ‘consultation’ that its Generalitat (or regional government) once hoped would be a legal referendum not unlike the recent September vote on independence in Scotland. But Rajoy has refused to countenance even the idea of negotiating the terms of such a referendum, and he has consistently ruled out any vote as unconstitutional.

Nevertheless, Catalunya’s regional president Artur Mas (pictured above) has championed a referendum since at least 2012, and his party and other more radical groups in the Catalan regional parliament overwhelmingly voted to hold the referendum, setting the central and Catalan regional governments on what has been a divisive battle over the past year.

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RELATED: Mas cancels official Catalan independence vote

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Mas backed down on the ‘official’ nature of the referendum, which in any event was always designed to be non-binding, when Spain’s constitutional court ruled that the vote was illegal last month. Much to the chagrin of other, more leftist nationalists, however, Mas instead moved forward with an unofficial referendum, taking care not to use official Spanish government resources to conduct the vote.

The Spanish constitutional court ruled last week, in a second decision, that even this unofficial, non-binding ‘consultation’ should be delayed until it could have time to rule on its further legality. Mas went ahead with the vote, anyway, however, prompting a sharp rebuke from Rajoy’s government on Sunday:

Justice Minister Rafael Catalá described the November 9 vote as an “act of political propaganda with no democratic validity; a sterile and useless act.”

The minister went on to announce that the public prosecutor would evaluate the facts of Sunday’s vote and decide whether or not to begin legal action in the courts.

Though the law is squarely on the side of the Spanish government, the Catalans seem to have valid political and moral reasons for demanding at least a voice over their own future. In any event, at least 2.3 million Catalans turned out for the vote, representing around 35% of the total Catalan electorate, nearly all of them were pro-independence voters.

The vote asked two questions: first, ‘do you want Catalunya to be a state?’ and second, ‘if so, do you want Catalunya to be an independent state?’

The so-called ‘yes-yes’ vote won with around 80.8% of the vote. The so-called ‘yes-no’ vote (i.e., those supporters of a Catalan state, but not necessarily an independent state) won another 10.1%. ‘No’ won just 4.5% of the vote.

While that’s skewed in favor of the independence movement, it’s also not insignificant — and it indicates that a large portion of the Catalan people want a legal and valid vote on their status. The longer that Madrid assumes an ostrich position over what’s become a very real sense of grievance among everyday Catalans, the worse the standoff over independence will end. By refusing to discuss the possibility, Rajoy and the central government risk pushing moderate unionists into the arms of the Catalan nationalists.

Nevertheless, Sunday’s turnout fell far short of the 3.7 million voters who participated in the most recent November 2012 regional elections, indicating that a substantial number of voters (who presumably aren’t as enthusiastic about independence) didn’t bother to turn out. The two-pronged ballot question demonstrates the kind of too-cute-by-half ambiguity that British prime minister David Cameron refused to entertain when negotiating the Scottish referendum — what, after all, does it mean for Catalunya to be a state if not independent?

A frustrated electorate trapped between Rajoy and Mas

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The most obvious solution to the standoff is a calm, rational conversation between the Mas and Rajoy governments that would result in greater autonomy for Catalunya’s Generalitat with respect to its own finances and spending. Incredibly, however, the two leaders went months earlier this year without even talking.

Rajoy, whose center-right Partido Popular (PP, People’s Party) won the November 2011 Spanish general elections, has consistently refused to discuss greater autonomy for Catalunya. In part, this is because Rajoy’s party has fairly little support within Catalunya — the Partit Popular de Catalunya (PPC, People’s Party of Catalonia) is just the fourth-largest bloc in the regional parliament. So Rajoy feels little immediate political pain from snubbing the region.

When he took office, Rajoy faced the likelihood that Spain would be essentially forced into a European bailout. As it turned out, Rajoy was forced into implementing budget cuts and tax increases to stave off a bailout — in addition to similar austerity measures introduced by his predecessor, José Luis Rodríguez Zapatero, the center-left prime minister whose Partido Socialista Obrero Español (PSOE, Spanish Socialist Workers’ Party) came to power in 2004 at the dawn of the Spanish construction and finance boom.

Accordingly, Rajoy has a decent argument for avoiding a full-fledged independence referendum: with a 23.7% unemployment rate as of September, Spain is still in the midst of the worst financial and economic crisis in decades. An independence referendum in Catalunya might credibly be followed by a referendum in the Basque Country/Euskadi, another economic powerhouse with an even more painful history of separatism. Copycat movements could thrive in Galicia and elsewhere. So Rajoy has a reasonably sympathetic argument that a Catalan referendum in the midst of the current crisis could eventually pose an existential threat to the Spanish nation.

But that’s not an excuse for ignoring the problem. What’s worse is that the Spanish economic crisis is itself also fueling greater discontent among Catalans, who believe they send far more in revenue to the Spanish central government than they receive back in services and infrastructure. Though the data isn’t entirely clear, the Catalans are essentially correct. It rankles that all high-speed trains in Spain run through Madrid, for example, and that almost all of the country’s international flights arrive at the Madrid airport. Catalunya, with just 7.5 million of Spain’s 47 million citizens, is responsible for 19% of the economy.

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RELATED: In refusing Catalan vote,
Rajoy risks isolating himself and Spain’s future

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The Scottish referendum was also about economics (nationalists believe they can thrive as a smaller, oil-rich country within the European Union) and about politics (like the PP in Catalunya, the Conservatives have relatively little support in Scotland). But the Catalan movement is also colored by additional layers of complexity that Rajoy shows virtually no sign of appreciating — notably decades of suppression of its language and culture by the dictatorship of Francisco Franco. When Rajoy’s education minister, a few years ago, suggested a stronger national program in the Castilian language, it particularly rankled Catalans, many of whom remember the days when the Catalan language was legally banned.

But Mas, the leader of the Convergència i Unió (CiU, Convergence and Union), a two-party, center-right nationalist coalition that’s traditionally been the most powerful force in Catalan politics since the return of democracy, is hardly an honest broker. CiU has always been more comfortable with greater autonomy than full independence, and Mas only recently converted to the cause in 2012 following widespread protests. Since taking power in 2010, Mas has made many of the same painful, unpopular budget decisions at the regional level that Rajoy has made at the national level. What’s more, Jordi Pujol, the former CiU leader and Catalan president between 1980 and 2003, has been subject of increasing scrutiny over his personal wealth and corruption accusations.

Accordingly, neither Mas nor Rajoy come out of the current showdown from a incredible position of strength. That might not necessarily matter if they could at least find a middle ground to discuss the most sensible solution to the political crisis — constitutional reform, greater regional autonomy and the possible creation of a federalist system in Spain.

As elections loom, what comes next?

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So far, however, the chances of any productive talks between Madrid and Barcelona seem small.

Mas has given Rajoy a two-week deadline to begin negotiations for a formal referendum. Rajoy, however, is almost certainly unlikely to take Mas up on that offer.

What happens thereafter is murky, though.

Mas’s party, the larger, more moderate and more aggressive Convergència Democràtica de Catalunya (CDC, Democratic Covergence) within the CiU, would like to hold early regional elections, rolling the dice that they would become a de facto referendum on Catalan independence — or at least the right of the Catalan government to call a vote. The smaller, Christian democratic Unió Democràtica de Catalunya (UDC, Democratic Union) has always been less enthusiastic about Mas’s push for independence and would prefer to wait on snap elections.

Part of the political calculus for Mas, Rajoy and the CiU are polls that show that the most popular party in Catalunya is now the leftist Esquerra Republicana de Catalunya (ERC, Republican Left of Catalonia), an even more radical pro-independence party led by historian Oriol Junqueras.

On paper, at least, the PP and the CiU have much more in common than the PP and Esquerra, so both Rajoy and Mas have an incentive to reach some kind of face-saving deal in the next few days.

But at the rate Rajoy is going, he may not have the opportunity to negotiate anything in the long run.

The rise of the anti-establishment Podemos (‘We can!’), the movement founded earlier this year by professor Pablo Iglesias (pictured above), has scrambled all pretenses of Spain’s two-party system. Winning five of the country’s seats to the European Parliament in May, Podemos wants to reevaluate Spain’s public debt, lower the retirement age to 60 to free up more jobs for younger workers and reverse the austerity of the past two PSOE and PP governments, using government spending to create jobs for a country that still has the highest unemployment within the European Union, despite signs of new growth. A Podemos win would be a significant setback to the orthodox policies that German chancellor Angela Merkel has attempted to establish throughout the eurozone, including the 2011 ‘fiscal compact’ that firmly limits national budget deficits to less than 3% of GDP.

Podemos, in a shock Metroscopia poll a couple weeks ago, gained the lead among potential voters in advance of the next Spanish general election, which must be held before December 2015 — it would win 27.7% to just 26.2% for the PSOE, under the leadership of Pedro Sánchez, who won his party’s July leadership contest, and 20.7 for Rajoy’s PP. Sánchez, for his part, opposes Catalan independence, but has indicated much greater willingness to hold discussions with regional leaders over constitutional reform.

The local Partit dels Socialistes de Catalunya (PSC-PSOE, Socialists’ Party of Catalonia) controlled the regional government between 2003 and 2010, and many of its members are sympathetic to the idea that Catalans should have the right to self-determination.

Though Podemos is widely viewed as a leftist alternative, it has attracted widespread support from many Spaniards who have lost faith in both major parties, especially among young voters who face the worst job prospects, and the indignados, the unemployed protestors who have given voice to the harsh effects of what are now a half-decade of austerity policies.

Ironically, Podemos has attracted little support within Catalunya, where voters have a nationalist (and leftist) alternative in Esquerra.

But as Spain nears the one-year mark until its elections, with the November 9 referendum now in the rear-view mirror, the brinksmanship between Rajoy and Mas won’t matter if they can’t find a path toward reconciliation. At this time next year, their respective governments could be headed by much more radical figures.

Spain

Ruiz-Gallardón resigns after Rajoy drops Spanish abortion bill

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spainabortionsPhoto credit to Susana Vera/Reuters.

It’s not just the United States that struggles over competing beliefs about abortion. In Spain, pro-choice advocates won one of their biggest international victories of the decade when the country’s conservative government this week backed down on plans to implement a restrictive new abortion law. Spain_Flag_Icon

Spanish justice minister Alberto Ruiz-Gallardón resigned Tuesday after prime minister Mariano Rajoy’s cabinet dropped plans for legislation that would heavily restrict abortion rights in the European Union’s fifth-most populous country. The law would have largely rolled back liberalizations enacted by the previous center-left government of prime minister José Luis Zapatero.

Though Rajoy and the Partido Popular (the PP, or the People’s Party) promised abortion reforms in the campaign that led to their election in December 2011, the legislation has been stalled by political opposition, not just from regional and leftist parties, but within corners of the People’s Party itself, including several prominent party leaders. They include the regional president of Galicia, Alberto Núñez Feijóo, who in January called on the national government to tone down the ambitions of its abortion bill, and the deputy speaker of the Congreso de los Diputados (Congress of Deputies), Celia Villalobos.

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RELATED: New PSOE leader Sánchez faces uphill struggle to unite Spanish left

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Nevertheless, Gallardón had increasingly staked his credibility as justice minister on the bill’s success, arguing earlier this year that the legislation would advance by the end of the summer. That didn’t happen and, on Friday, Rajoy’s cabinet refused to advance the bill.

Continue reading Ruiz-Gallardón resigns after Rajoy drops Spanish abortion bill →

Spain

New PSOE leader Sánchez faces uphill struggle to unite Spanish left

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He’s a disarmingly handsome economics professor, and he’s the first major Spanish party leader who grew up chiefly in the post-Franco era and in the era of Spanish democracy.Spain_Flag_Icon

But Pedro Sánchez, who leapfrogged the more well-known Eduardo Madina to become the leader of Spain’s Partido Socialista Obrero Español (PSOE, Spanish Socialist Workers’ Party) earlier this month, and who will assume the leadership later this week, will have his work cut out for him before elections that will take place within the next 17 months, with the party’s traditional voting base increasingly supporting both new and established alternatives on the Spanish left. 

Sánchez (pictured above), just 42 years old, has only been a member of the Congreso de los Diputados (Congress of Deputies), the lower house of the Spanish parliament, the Cortes Generales, from 2009 to 2011 and  since January 2013, representing Madrid, where he served as a city councillor for the preceding five years.

Sánchez won the PSOE’s first direct contest to elect the party’s general secretary in a three-way race, with 48.7% of all votes against just 36.1% for Madina and 15.1% for the more left-wing José Antonio Pérez Tapias.

Though Madina, at age 38, is even younger than Sánchez, he’s been a member of the Congress of Deputies since 2004 and the secretary-general of the PSOE’s congressional caucus since 2009. A Basque federalist, he was perceived as the frontrunner in the race, especially after taking a republican stand in the aftermath of Juan Carlos I’s abdication from the throne. But the favorite to lead the PSOE, Andalusia’s 39-year-old regional president, Susana Díaz, endorsed Sánchez instead, as did many former officials from the administration of former prime minister José Luis Rodríguez Zapatero, including former public works and transportation minister José Blanco.

That effectively lifted the more unknown Sánchez, who holds a doctorate in economics, above Madina, who once lost part of his left leg in a Basque nationalist bomb blast.

On his election, Sánchez declared the ‘beginning of the end of Rajoy,’  challenging the unpopular center-right government of prime minister Mariano Rajoy, which has presided over the worst of Spain’s recent economic crisis.

Not so fast.  Continue reading New PSOE leader Sánchez faces uphill struggle to unite Spanish left →

Spain

With Spanish left reeling, Rubalcaba steps down as PSOE leader

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rubalcaba

The European parliamentary elections have claimed their first national leader in Alfredo Pérez Rubalcaba, the general secretary of the Partido Socialista Obrero Español (PSOE, Spanish Socialist Workers’ Party), Spain’s traditional center-left party.Spain_Flag_Icon

In Sunday’s elections, Spanish voters elected 54 members of the European Parliament. The ruling Partido Popular (the PP, or the People’s Party) of prime minister Mariano Rajoy won the largest share of the vote, around 26%, and the largest number of seats, 16.

The PSOE placed second with just 23% and 14 seats — that’s a loss of nine seats in the European Parliament.

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Rubalcaba, taking the blame for his party’s losses, announced he would step down from the leadership, calling a meeting on July 19-20 to select a new general secretary of Spain’s largest center-left party:

“We have not managed to regain the trust of the citizens,” Mr Rubalcaba told a press conference in Madrid on Monday, adding that he would not stand for re-election at an extraordinary party conference in July. “We have to take political responsibility for the bad results, and this decision is absolutely mine,” he added.

There’s no guarantee that the next PSOE leader will be able to unite the Spanish left, which has fractured in the face of the economic crisis in the past five years.

The PSOE’s performance was hardly much worse than Rajoy’s party, which lost eight seats. Taken together, the two major Spanish parties won around 49% of the vote. That’s down from nearly 84% in the 2008 Spanish general election, 80% in the previous 2009 European elections and 73% in the 2011 general election.

So while the greater pressure fell on Rubalcaba and the PSOE, the results are hardly heartening for Rajoy. Continue reading With Spanish left reeling, Rubalcaba steps down as PSOE leader →

Andalusia, Spain

In Andalusia, Díaz takes office with staggeringly high unemployment, economic woes

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susanadiaz

Andalusia, the most populous of Spain’s ‘autonomous communities,’ has one of the most distinctive cultures in Europe — it’s the home of flamenco musical tradition, the Moorish architecture of Córdoba and Granada, the Baroque splendor of Seville and the birthplace of sherry.andalucia flagSpain_Flag_Icon

For all of its cultural riches, however, Andalusia has recently distinguished itself as one of the most economically challenged regions in Europe.  Last year, it had the second-highest unemployment rate (34.6%) in the entire European Union, with a youth unemployment rate of over 60%.  When you think of the European periphery that’s been choked off from economic growth by the eurozone sovereign debt crisis and the European Central Bank’s monetary policy, you should think of Andalusia.

Enter Susana Díaz, who took over last week as Andalusia’s new president (and its first female president), following the resignation of José Antonio Griñán, who had served as the Andalusian president since April 2009 and led the Partido Socialista Obrero Español (PSOE, Spanish Socialist Worker’s Party) to a nearly historic defeat in what’s long been a heartland of the Spanish left, stemming from the stridently leftist response to the latifundio culture that dominated economic life in the region through the early 20th century.  The lack of political competition in the region has done Andalusian residents few favors, however, and Socialist bosses control the region’s government as surely as the caciques of the old aristocracy.

Díaz marks somewhat of a break from the immediate past (up to a point) — from Griñán, and also from his predecessor, Manuel Chaves, who served as the Andalusian president from 1990 until 2009.  That’s good news in light of ongoing investigations into corrupt practices of past governments because past Socialist officials, including potentially Chaves and Griñán, are implicated in the fraudulent diversion of funds from ERE, a publicly subsidized fund that pays severance to laid-off workers.

Griñán announced he wouldn’t run for reelection as leader of the Andalusian Socialists earlier this year in part to shield the Socialist government from being further soiled by the ‘EREgate’ investigations.  Díaz won the leadership easily in July as Griñán’s preferred candidate, despite the promise of a robust party primary, and Spain’s national Socialist leader Alfredo Pérez Rubalcaba worked to hasten the transition to Díaz, given the ethics cloud hanging over Griñán and Chaves.  It’s become somewhat standard practice for Andalusian Socialist presidents to stand down between elections, however, allowing new leaders the benefits of incumbency in advance of the next election.  For Díaz, that won’t likely come until 2016.

Though it’s not yet clear whether Díaz marks a true rupture from the old Socialist bosses that have controlled the Andalusian government for three decades, she has a long and difficult road of governance ahead.

Somewhat promisingly, Díaz has already replaced three of the eight leading ministers in the Andalusian government, including the top economic officials from the Chaves-Griñán era and appointed her own economic team — headed by Andalusia’s new economics commissioner José Sánchez Maldonado, a former professor of public finances and a Socialist heavyweight who hopes to emphasize employment, growth and social justice.

But just ask Sicilian president Rosario Crocetta how much leverage he has had in repairing another struggling peripheral Mediterranean economy, even with all the anti-corruption, pro-growth, pro-employment sentiment he can muster.  Frankly, Díaz holds few of the political and economic levers that would allow her to radically change Andalusia’s destiny, which will be determined to a larger degree in Berlin, Brussels and Madrid than in Seville.  Last autumn, the region requested an additional €1 billion to meet its financial obligations, and the government has long been suspected of hiding the true extent of its debt obligations from federal officials.

Continue reading In Andalusia, Díaz takes office with staggeringly high unemployment, economic woes →

Bulgaria, Cyprus, European Union, France, Germany, Greece, Italy, Spain, United Kingdom

What Iceland’s election tells us about post-crisis European politics

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dusseldorf

Iceland was supposed to be different.Iceland Flag IconEuropean_Union

In allowing its banks to fail, neo-Keynesian economists have argued, Iceland avoided the fate of Ireland, which nationalized its banks and now faces a future with a very large public debt.  By devaluing its currency, the krónur, Iceland avoided the fate of countries like Estonia and others in southern Europe trapped in the eurozone and a one-size-fits all monetary policy, allowing for a rapid return to economic growth and rapidly falling unemployment.  Neoclassical economists counter that Iceland’s currency controls mean that it’s still essentially shut out from foreign investment, and the accompanying inflation has eroded many of the gains of Iceland’s return to GDP growth and, besides, Iceland’s households are still struggling under mortgage and other debt instruments that are linked to inflation or denominated in foreign currencies.

But Iceland’s weekend parliamentary election shows that both schools of economic thought are right.

Elections are rarely won on the slogan, ‘it could have been worse.’ Just ask U.S. president Barack Obama, whose efforts to implement $800 billion in stimulus programs in his first term in office went barely mentioned in his 2012 reelection campaign.

Iceland, as it turns out, is hardly so different at all — and it’s now virtually a case study in an electoral pattern that’s become increasingly pronounced in Europe that began when the 2008 global financial crisis took hold, through the 2010 sovereign debt crisis in the eurozone and through the current European-wide recession that’s seen unemployment rise to the sharpest levels in decades.

Call it the European three-step.

In the first step, a center-right government, like the one led by Sjálfstæðisflokkurinn (Independence Party) in Iceland in 2008, took the blame for the initial crisis.

In the second step, a center-left government, like the one led by Jóhanna Sigurðardóttir and the Samfylkingin (Social Democratic Alliance) in Iceland, replaced it, only to find that it would be forced to implement harsh austerity measures, including budget cuts, tax increases and, in Iceland’s case, even more extreme measures, such as currency controls and inflation-inducing devaluations.  That leads to further voter disenchantment, now with the center-left.

The third step is the return of the initial center-right party (or parties) to power, as the Independence Party and their traditional allies, the Framsóknarflokkurinn (Progressive Party) will do following Iceland’s latest election, at the expense of the more newly discredited center-left.  In addition, with both the mainstream center-left and center-right now associated with economic pain, there’s increasing support for new parties, some of them merely protest vehicles and others sometimes more radical, on both the left and the right.  In Iceland, that means that two new parties, Björt framtíð (Bright Future) and the Píratar (Pirate Party of Iceland) will now hold one-seventh of the seats in Iceland’s Alþingi.

This is essentially what happened last year in Greece, too.  Greece Flag IconIn the first step, Kostas Karamanlis and the center-right New Democracy (Νέα Δημοκρατία) initially took the blame for the initial financial crisis.  In the second step, George Papandreou and the center-left PASOK (Panhellenic Socialist Movement – Πανελλήνιο Σοσιαλιστικό Κίνημα) overwhelming won the October 2009 elections, only to find itself forced to accept a bailout deal with the European Commission, the European Central Bank and the International Monetary Fund.  In the third step, after two grueling rounds of election, Antonis Samaras and New Democracy returned to power in June 2012.

By that time, however, PASOK was so compromised that it was essentially forced into a minor subsidiary role supporting Samaras’s center-right, pro-bailout government.  A more radical leftist force, SYRIZA (the Coalition of the Radical Left — Συνασπισμός Ριζοσπαστικής Αριστεράς), led by the young, charismatic Alexis Tsipras, now vies for the lead routinely in polls, and on the far right, the noxious neo-nazi Golden Dawn (Χρυσή Αυγή) now attracts a small, but significant enough portion of the Greek electorate to put it in third place.

The process seems well under way in other countries, too.  In France, for examFrance Flag Iconple, center-right president Nicolas Sarkozy lost reelection in May 2012 amid great hopes for the incoming Parti socialiste (PS, Socialist Party) administration of François Hollande, but his popularity is sinking to ever lower levels as France trudges through its own austerity, and polls show Sarkozy would now lead Hollande if another presidential election were held today.

It’s not just right-left-right, though. The European three-step comes in a different flavor, too: left-right-left, and you can spot the trend in country after country across Europe — richer and poorer, western and eastern, northern and southern. Continue reading What Iceland’s election tells us about post-crisis European politics →

Basque Country, Catalunya, Galicia, Spain

Six ways in which Sunday’s Galician and Basque elections will affect the Rajoy government

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Just over 10% of Spain’s population will vote in regional elections this weekend in two key regions, Galicia and Euskadi (the Basque Country), but the elections will play a role in shaping the national politics that affect the remaining 90% of Spain at what’s an especially precarious time for the government of center-right prime minister Mariano Rajoy (pictured above with Galician president Alberto Núñez Feijóo).

Although Rajoy’s Partido Popular (PP, People’s Party) only recently came to power in November 2011, after the eight-year government of prime minister José Luis Rodríguez Zapatero and the center-left Partido Socialista Obrero Español (PSOE, Spanish Socialist Workers’ Party), Rajoy has faced an unenviably difficult climate.  Spain’s economy is contracting this year after two years of tepid growth under 1%, which followed a contraction in 2008-09.  Unemployment is now just over 25%, among the highest in the eurozone.

Despite the tough economic conditions, Zapatero’s government, and now Rajoy’s government, have been relentless in slashing the Spanish budget.  Although Spain ran a fairly tight fiscal policy throughout the 2000s, the drop in tax revenue has resulted in an exploding budget deficit, which Rajoy hopes to reduce to just 6.3% of GDP this year (and 4.5% next year and 3% in 2014), in order to prevent yields on Spanish debt from rising to dangerous levels.

In less than a year, Rajoy has passed at least four different budget cut packages, including a raise in the Spanish income tax rate, a 3% hike in the Spanish value-added tax from 18% to 21%, the elimination of tax breaks for home owners and spending cuts for education and health care.  Furthermore, each of Spain’s regions are responsible for cutting their own budgets to just 1.5% of GDP.

Although Rajoy campaigned on a promise not to seek any bailouts from the European Union, like Greece has done, everyone in the EU believes it’s only a matter of time before Rajoy requests one — the European Central Bank has already provided emergency funding to prop up Bankia and other beleaguered Spanish banks in June.  Unlike with Greece, however, the most likely path for a Spanish bailout would be through a temporary credit line through the European Stability Mechanism, triggering the purchase of Spanish debt by the European Central Bank.

So on Sunday, when election results roll in from Galicia and Euskadi, here are six items to consider about how the results could affect the Rajoy government and Spain’s national politics: Continue reading Six ways in which Sunday’s Galician and Basque elections will affect the Rajoy government →

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 →