A couple of days ago on November 20, Spain held its nationwide general election. Yesterday we learned that the opposition Partido Popular (People’s Party) won an historic election victory, giving the PP a new majority in the Congress as well as elevating Mariano Rajoy as the new Spanish premier. The polls here had been indicating for weeks that the PP would win the election and defeat the ruling Partido Socialista Obrero Español (Spanish Socialist Workers’ Party…what a name!). But the polls had not predicted such a strong defeat for the PSOE, which in turn has given the PP their largest majority in the Congress since Spain returned to democracy in the 1970s.
The results of the election will obviously lead to a new cast of characters running the government in Madrid. The Spanish people clearly wanted to give some other political group a shot at trying to fix Spain’s enormous problems of high unemployment (21% officially) and unsustainable sovereign debt.
However, the PP‘s plans to improve the dire economic situation seem rather ambiguous at best. Most of the campaign was the PP placing blame for the economic crisis on the ruling socialists, who were in power during the ’08 financial collapse. The PP, which is a European center-right party, seems to me to be similar in many respects to the American Republican Party. The PP has promised to improve unemployment and cut the national debt, yet has also asserted no intention to dismantle the socialized medical system, the vast pension program, subsidized university system or other major welfare programs. I just don’t know how snipping around the edges of the spending is going to come anywhere close to paying off their national debt. But the PP plans to have the best of both worlds: keep the politically popular welfare state intact and also save Spain from total economic collapse.
Many here in Spain have realized that the PP will do very little different than the PSOE. Both of these major parties seem to accept the role of a large central government, heavy taxation and a welfare system. One party, the PP, wants to make government a little more efficient and plays up Spanish nationalism, while the other party, the PSOE, wants a little more redistribution and a little more multiculturalism. Thus many campaign signs here were graffitied with PPSOE, ridiculing the fact that both are essentially the same party.
Again, the situation parallels the two-party system in the United States. The Republican establishment and the Democratic establishment don’t differ that much on substance. Usually they are arguing over a few million dollars, when the country actually owes 15 trillion dollars. One party wants a little more warfare and one wants a little more welfare, but neither questions the bankrupt entitlement system, the Federal Reserve, or the unconstitutional wars (well, with the exception of Ron Paul of course).
With the ball in the PP’s court so to speak, we will see what happens in Spain. I predict a symbolic cut or two but nothing that could actually make Spain solvent. Hopefully I will be wrong for Spain’s sake.