Feb 052015


Are you concerned about the impact of the Greek elections on Spain – a country that now has its own radical and dynamic new political party (´Podemos’)?

Well, it would be understandable.  Syritza in Greece have had a stunning success and humiliated the long established political parties of Greece and now promise a radical change in Greek politics and governance.  The question is whether Podemos can achieve the same electoral success in Spain and whether it would be a good or bad thing for the country.

Certainly, there seem to be parallels between Spain and Greece with regard to the contempt for their principal political parties that are obvious amongst the respective populations.  In the case of Spain, two parties have effectively held power since the demise of the Franco regime in 1975 – the Popular Party (somewhat similar to the Conservatives in the UK) and the PSOE (a continental version of the UK Labour party).

The main Spanish political parties have seen their popularity plummet because of the dreadful consequences of the economic crisis here.  This was, to some extent, caused by the PSOE party’s gross mismanagement of the Spanish economy whilst in power during the boom and the initial stages of the crisis – and by the inadequacies of the PP party, who have been in power for the past 3+ years.  The latter, of course inherited a poisoned chalice with regard to Spanish debt but they have hugely damaged their own ‘popularity’.  Indeed, the harshness of the PP government’s austerity measures have been accompanied by some staggeringly odious, inept (and deeply unpopular) legislation restricting human rights.

Meanwhile, hardly a week goes by without yet another devastating revelation of corruption concerning either the PP or the PSOE, whether nationally or locally.  The justifiable perception amongst the Spanish about both parties is that they are self-serving, endemically corrupt and quite incapable of providing good governance.  This covers the actions of the political parties right through to their administrations of the local Town Halls, the Autonomous Regions and the national government itself.

In short, the Spanish are utterly fed up with their political parties and the seemingly endless economic crisis and the perfidious nature of political corruption.  So they want a change.  To them, the system is clearly not working and, like the Stygian stables, needs a thorough and complete cleaning out.  Thus the astonishing popularity of Podemos, a party that has been in existence for less than two years.

Of course, the impact of the Greek elections on Spain are profound – they have shown that a brand new party can have electoral success.  This has given a terrific boost to Podemos and has shaken the traditional Spanish political parties (the PP and PSOE) to the very core.  Indeed, I suspect that the PP and PSOE must be looking carefully at Greece now and hoping that before the local and national elections in Spain this year that Syritza will somehow lose all credibility and prove to be utterly incompetent and unable to deliver on their promises.  This may turn out to be the case – however it is probably one of the only hopes for electoral success that both the PP and PSOE have.

Needless to say, the macroeconomic news for Spain is good with reports coming out that Spain is making an economic recovery.  However, I think this needs to be put into perspective.  Spanish government statistics are often dubious and any ‘good’ governmental news during an election year needs to be treated with the greatest caution.  Certainly, on an anecdotal basis, I see no real signs of recovery in my own area of Spain (the Valencia region).  Unemployment remains appallingly high, young people have little or no hope of finding meaningful work, money is very hard to borrow, salaries remain pitifully low and Spanish housing prices are at rock bottom.  I may be missing the bigger picture – but I doubt it.

So – what are the chances of Podemos having a similar electoral success to that of Syritza in Greece?

At the time of writing, I would suggest that the chances are good.  Hardly anyone who I meet, even long term supporters of the traditional parties, wants to vote the way they did in the past. To some extent this is what is most shocking – a universal dislike of the PP and PSOE and, along with it, a genuine perplexity about who to vote for, come the day of an election.

Of course, many people are troubled by Podemos and their hard left philosophy, their unproven ability to govern and the reality of putting into action their promises.  But who else is there to vote for?  That is a question that confounds most people and will probably allow, even just by default, Podemos to have electoral success or, at least enough success to become a major power broker in Spain.

One thing is for sure, Spanish politics is likely to be stirred up this year in a way that it has not been since the death of General Franco in 1975.   Indeed, for good or bad, the impact of the Greek elections on Spain may reverberate throughout Europe if Podemos have the same success as Syritza.  This may herald a radical change to politics in Europe – although whether it will be for the better, only time will tell….

NICK Snelling

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  4 Responses to “The impact of the Greek elections on Spain”

  1. You wrote “poisoned chattel”, I think you mean a “poisoned chalice”.

    You have a tendency to believe bad news about Spain and dismiss the good news. Spain is clearly coming out of the recession and credible national and international commentators agree on this.

  2. Thank you for your correction – I am most grateful! I am looking forward to coming across ‘credible national and international commentators’. The latter did not foresee the crash and had no idea about the level of debt in Spain (or the generalised credit crisis across the world) that was apparent during the boom. Meanwhile, the ‘white noise’ created by vested interests needs to be assessed very carefully, particularly in the light of the forthcoming elections and the potential for disruption of the new parties across Europe. Meanwhile, no-one would be more pleased than me to see Spain come out of the crisis (perhaps it is) – but there is little evidence of any positive impact upon the population at large…

  3. Nick, it is true that some pundits in are optimistic about recovery in Spain. Take this, for instance, from the I.M.F.

    “The global economy continues to recover, albeit at a slower pace than expected. In this context there are some shadows, like sluggish growth in some economic areas, but some lights as well. The Spanish economy, for example, has managed to outpace growth expectations and create employment despite
    weak growth in the region. The ambitious reform program initiated in 2012 and the strong will to fundamentally transform the Spanish growth model are now bearing its fruits.”

    Statement by the Hon. Luis de Guindos, Governor of the Fund and the Bank for Spain. 2014 Annual. Meetings. October 10, 2014

    That’s all right then.

    But before we all dance around, throwing our somberos in the air, we must remember who this guy is and where he came from:

    “Luis de Guindos Jurado is a Spanish politician, a member of the Spanish People’s Party, and currently the Minister of Economy and Competitiveness of Spain. Mr de Guindos, 51, is an economist who headed Lehman Brothers in Spain”

    So, that’s NOT all right then.

    From what I observe from punditry, there is growth in the property and construction market, from a starting point of pretty much zero [in other words, any sign of movement at all had to be ‘up’] in commercial property and blue-chip developments. Standard & Poore reckons that residential property is still 10% overvalued, judged by affordability of Spanish incomes.

    I can see that a multinational wishing to set up or move its European HQ somewhere cheaper would look at Spain most favourably. Cheap property and a huge pool of well educated, unemployed graduates to staff it. Sort of Bangalore-by-Med.

    There are some who must be doing quite well in Spain. The companies who print the “Rebajas!” posters for all the shops are going gang-busters. The windows of the shops on Calle de Colón, Valencia’s Regent Street or 5th Ave NYC, are a wall of posters – “Sale!”, “Reductions! 50% / 60%!” The biggest reductions sign I saw last month was in a posh jewellery shop – 70% !

    Things on the street are not good.

    The banks are not helping. I tried to make an appointment to view a flat being sold by a bank. Because the previous owner had walked away having defaulted on mortgage and utilities – a situation with most bank properties, we can assume – the water and electricity had been cut off, so the flat did not have a Cédula de Habitabilidad = Certificate of Occupancy.

    My lawyer contacted the agents marketing the flat. She was told that the bank had no interest in providing a Cédula de Habitabilidad. Any buyer would then, having committed to buy, either have to go through the rigmarole of getting one or live there illegally. My lawyer told me that the banks are positively obstructive when dealing with properties they ‘own’. She said that, in her experience, the attitude of the banks is uncooperative, intransigent, dilatory and, in short, a nightmare to deal with.

    Funny, that, in the depths of a property crash, no?

    I have come to the conclusion that there are two Spains. One is made up of the Spanish people, their way of life and their cultural heritage. The other Spain is made up of Spanish institutions – all those concerned with governance, national and local, the banks and financial institutions and the institutions concerned with the law. What is difficult to understand, from a northern European perspective, is how grossly divergent these two Spains are from each other.

    But the fact remains that the institutions that seem to be the reason why Spain is in such difficulty, is so likely to do precisely the opposite of what appears to be the sensible thing [Valencia puts up property purchase tax from 8% to 10%in a property crash], is so burdened with incompetence and a culture of institutionalised corruption – all these institutions are populated by the very people who, as people, are so admirable.

    Podemos recognises this and has put forward a case for change. At the root of this change is the proposition that the ‘good guys’ must replace the ‘bad guys’, continue to be the good guys, do the right thing by Spain, and not revert to previous type. A tough ask, in Spain, but I wish them every success in the attempt.

  4. Chris – thank you and there is nothing I can argue about from what you have written. Well done, indeed – and your point about Guindos, his comments and Lehmans is wonderful…

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