Spain’s Election Forecast: More Fragmentation

(Bloomberg Opinion) -- Spain goes to the polls on Sunday, with the national government up for election and no certainty at all about the results. This was a snap election, called by Socialist Prime Minister Pedro Sanchez. To learn more about it, I spoke over email with political scientist Monica Clua-Losada, an associate professor at the University of Texas-Rio Grande Valley, and an expert on European politics, political economy and public policy. 

Jonathan Bernstein: What's the most important thing those of us outside Spain should know about the election on Sunday?

Monica Clua-Losada: There are two crucial elements in this general election. First, the increasing fragmentation of the Spanish political system might become the norm, forcing the creation of coalition governments, instead of majority governments, in the future, as already happens in other European political systems (such as Germany).

Second, there is a situation of democratic exemption: Two candidates, Jordi Sanchez and Oriol Junqueras, are in prison and being prosecuted by Spain’s supreme court on rebellion and sedition charges following the Oct. 1, 2017, referendum in Catalonia.

JB: Assuming there is no majority government, how predictable are the potential coalitions? 

MC: There are three potential coalitions at this point, which involve the two main parties (the People’s Party and the Socialists). Most opinion polls are giving a majority of votes to PSOE (the Spanish Socialist Party), which may try to form a government with Unidos Podemos (a coalition of left-wing parties).

A second option would be for PSOE to enter into a coalition with Ciudadanos (a right-wing party characterized by Spanish nationalism against the secessionist process in Catalonia). The third possible coalition would be for the People’s Party to enter into coalition with Ciudadanos and possibly Vox (a new far-right party which currently has no representation in the Spanish congress).

Of these, the first option and the last one appear to be most likely. But, as has been happening elsewhere, opinion polls have become increasingly unreliable in predicting election outcomes, and, at the moment, there appears a large percentage of those asked that remain undecided (around 30 percent).

JB: One way or another, is it likely the results will produce a stable government? And what's the reason for the increasing fragmentation?

MC: If we consider the difficulties in producing a stable government in Spain in the recent years, the answer would be probably not. After the 2016 election, the People’s Party under Mariano Rajoy’s leadership had real difficulties in creating a governing coalition, and left the country without an actual government for months.

The last 10 months have certainly been difficult, after Pedro Sanchez from the Socialists became prime minister after a successful vote of no confidence from most opposition parties (with the notable exception of Ciudadanos). In fact, this election has been called due to Sanchez’s government’s inability to obtain support from Catalan parties to approve his budget.

Increasing fragmentation seems to be something that is occurring elsewhere. However, in places such as the U.S. or Britain, the main parties have gone through fragmentation struggles internally far more than externally. This may also have to do with the inability of Spain’s main parties to adapt to change.

JB: What are the main economic policies at stake in the election?

MC: Unemployment, the pension system, taxation and housing.

In terms of employment, there are two salient issues. First, following the last government, a coalition between PSOE and Unidos Podemos, the minimum wage has been raised by 22.3 percent, to 900 euros per month. Both parties consider that the minimum wage should continue to rise as it is still lower than it is in many other European countries. In addition, the high levels of temporary work and unemployment that have characterized the Spanish labor market continue, and parties are proposing different measure to tackle that. From left to right, the proposals range for protecting workers to a further flexibilization of the labor market.

Second, there is general agreement that the pension system needs to reformed; however, there very different positions on how to achieve that. For the past few years, Spanish pensioners have seen how their pensions have not kept up with inflation, so PSOE and Unidos Podemos are proposing cost-of-living increases. the People’s Party seems to argue for the sustainability of the pension system, even though during their years of government they overspent the public pension fund reserve, and left it empty.

Third, there have been some key debates over taxation. Left-wing parties are proposing more progressive taxation, by taxing more those who have more and reducing tax evasion, while proposals from right-wing parties are far more regressive, such as the reduction of taxes related to inheritance or capital gains.

Finally, housing has been a key issue. Since the 2008 financial crisis, and the crash of Spain’s housing market, housing has become a huge issue for most Spaniards. Recently, rental properties in Spain’s main cities (such as Madrid and Barcelona) are showing signs of another housing bubble, leaving many people without access to a home. Unidos Podemos proposes rent control in some of those cities, in line with recent policies adopted by Berlin, for example. PSOE opposes rent controls, but accepts that there must be some changes to guarantee basic tenants’ rights. For the People’s Party and Ciudadanos, the proposals are directed toward landlords, with tax deductions if they rent their properties.

JB: How are secession movements within Spain affecting this election -- and how will they be affected by the results?

MC: Spanish national (and nationalist parties) are trying to compete among each other to show who would have a toughest stance on the Catalan issue. Even the Socialists, accused by the People’s Party and Ciudadanos of being soft on Catalonia, has repeated during the campaign that a referendum on self-determination is absolutely non-negotiable.

For Catalonia, this is a painful issue. Having the entire previous Catalan government either in prison or in exile means that people are seriously questioning the quality of Spanish democracy and certainly its ability to manage political and peaceful dissent in deliberative rather than punitive ways.

The Catalan parties standing in this election that defend the right to self-determination (that is, to organize a referendum, which according to official opinion polls is supported by 80 percent of the population in Catalonia) are calling for dialogue, with the other side mainly threatening the permanent removal of self-government.

This is the biggest challenge to the contemporary political system of the Spanish state. At the moment, punitive measures and repression of government ministers, civil-society leaders, public servants and even university professors does not provide a picture of hope.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Jonathan Bernstein is a Bloomberg Opinion columnist covering politics and policy. He taught political science at the University of Texas at San Antonio and DePauw University and wrote A Plain Blog About Politics.

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