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What’s at Stake in Spain

A guide to tomorrow's Spanish election.

The outcome of tomorrow’s Spanish general election is uncertain.

Unidos Podemos — the coalition between Podemos and the United Left (IU) — has increased its chances of governing. With this alliance, Podemos has defined itself as a party of the Left.

Leader Pablo Iglesias has declared that Unidos Podemos carries the banner of social democracy that most European socialist parties have abandoned.

Unidos Podemos aims to expel Mariano Rajoy from the Palace of La Moncloa and — with the support of the Socialist Party (PSOE) — form a government of the Left. This alliance is the only option the coalition will consider.

If elected, Unidos Podemos promises to increase social expenditure by €60 billion (6 percent of GDP) over the next four years.

It plans to pay for this expansion with a fiscal reform package that includes implementing progressive taxation, with sharp raises in corporate taxes for large companies, fighting tax fraud and evasion, and imposing a financial transactions tax.

It also plans to audit the public debt and to extend the period of fiscal consolidation beyond what the European Commission imposed.

Further, Unidos Podemos is the only force that declares Spain a pluri-national state. It has promised to hold a referendum on Catalan self-determination, a central element in its alliance with En Comú Podem (the Catalan coalition of Barcelona En Comú, the Greens, United Left, and Podemos).

In the previous election Podemos, IU, and the regional coalitions won 20 percent of the vote, winning 71 seats. Right now the polls give Unidos Podemos 24­–26 percent, with 80 to 90 (out of 350) seats.

It has a serious chance to overtake PSOE. Unidos Podemos is the most-backed formation among people younger than thirty-five and those who live in medium-size and large cities.

The Social Democrats

The Socialist Party (PSOE) finds itself in a deep crisis.

Its campaign strategy has been to blame Podemos for the new election. But in fact Podemos — with the support of the Catalan independentist parties — offered to form a government with PSOE in December.

But the Socialists rejected it, arguing that it could not govern with separatists.

This move forced Podemos to pick between supporting a government alliance of PSOE and the neoliberal Ciudadanos or forcing new elections. They chose the latter.

PSOE’s accusation has not been persuasive. Right now, the public assumes that the Socialists will come in third: the first time in decades that the once-mighty PSOE will not finish in the top two.

There is also a deep internal division within the party. The majority of its voters and militants would like to join Unidos Podemos in a coalition government.

However, the Socialist Party apparatus — which has close ties with the Spanish financial and media establishment — sees the new leftist alliance as its worst enemy. They would prefer a partnership with Ciudadanos and, if necessary, the conservative Popular Party (PP).

Susana Díaz, president of the Andalucían regional government, represents this current. She has inherited the power of the PSOE de Andalucía, best represented by former prime minister Felipe González and his right hand Alfonso Guerra.

This political faction faces strong resistance, as corruption investigations have implicated former Andalucían presidents Manuel Chaves and Jose Antonio Griñan. Despite this, Díaz wants to take over as PSOE secretary general immediately after the election.

For Pedro Sánchez, the current secretary general, an alliance with Unidos Podemos might be the only way to survive politically. He could organize an internal referendum to ask PSOE militants whether they prefer a left alliance with Unidos Podemos or a right-wing agreement with PP and Ciudadanos. Former PSOE prime minister, Rodríguez Zapatero, has good relations with Pablo Iglesias and would support such a move.

However, despite any other internal conflicts, PSOE unanimously opposes any referendum or recognition that Catalonia, the Basque Country, and Galicia are nations within Spain.

This position might torpedo a potential alliance with Unidos Podemos, which relies on the twelve parliamentary seats belonging to En Comú and seventeen from Catalan independentist forces.

PSOE’s current stance on independence betrays their history. When it clandestinely resisted Franco’s dictatorship, PSOE defended the right of self-determination for Catalonia and the Basque Country.

In the previous election PSOE garnered 22 percent of the vote and won ninety seats. Now it is expected to receive 20–22 percent of votes with seventy-eight to eighty-six seats.

It is ranked first among voters without any school education, and second among people older than sixty-five.

The Conservatives

The campaign has become polarized between the Popular Party and Unidos Podemos, which in principle should have helped the conservatives regain the voters it lost to Ciudadanos (who won forty seats). Recent polls showed that the threat of a left-led government had brought some ex-PP voters back into the fold.

However, a huge case of corruption exploded on Tuesday, just six days before the election. Incriminating audio recordings were published showing that the PP’s minister of interior, Jorge Fernández Díaz, was conspiring in 2014 with the director of the anti-fraud and corruption office of Catalonia to fabricate corruption cases against Catalan independentist leaders.

In the recording, Díaz states that Prime Minister Rajoy knew about the operation. The case promises to change the last leg of the campaign, as had happened after the terrorist attacks of March 11, 2004, just three days before that year’s general election.

The revelation hits a conservative weak point. Corruption is one of the main reasons voters abandoned PP in the last election. More than two hundred party members stand accused — eighty of these are elected figures.

Another important scandal implicates the party’s accounting. Although it hasn’t been proven yet, it looks like the Popular Party organized a network to illegally receive financing from business groups in exchange for big public contracts and other favors.

The party’s treasurer, Luis Bárcenas, is currently in prison, accused of masterminding this scheme. But he claims he was only the treasurer — this had been going on long before him. And, in fact, the previous two treasurers are also under investigation.

Bárcenas also claims that Rajoy knew everything about the parallel accounting and even received dirty money — as most members of the party did. Bárcenas promises that he has evidence of it all.

Rajoy — who initially defended Bárcenas, even leaving him a telephone message encouraging him to stay calm and resist — now says that the former treasurer is a rotten apple and denies knowing anything about the shady accounting.

Beyond that, PP seemed to be successfully resisting Unidos Podemos’s onslaught. Its electorate doesn’t seem to care about its austerity policy. Instead, they worry about the possibility of Catalan independence or hope that the conservatives will leave their pensions untouched.

The Popular Party says that they have put Spain back on the right path after the mess created by PSOE prime minister José Luis Rodríguez Zapatero, whom it blames for the real estate crisis.

It reminds its voters that its government avoided a European bailout and have recovered international credibility while keeping austerity at a minimum. It has protected pensions, generated relevant economic growth, and reduced unemployment.

But the rest of the parties accuse PP of hiding Spain’s economic reality — over 90 percent of new employment contracts are temporary, lasting no longer than three months.

Yet the PP is by far the most popular party among voters older than sixty-five and those from towns and villages with fewer than two thousand inhabitants.

Conservative, older voters in the Castillas are the party’s main political base. Spain’s system of proportional representation — in which rural votes count almost double — gives the party a huge advantage.

Indeed, the conservatives will probably regain many votes that went to Ciudadanos in the last election if the current corruption case doesn’t spin beyond control, as the new neoliberal party has proved useless at facilitating a right-wing government.

The victory may end up being short-lived for Mariano Rajoy, however. He might have to step aside after the election to allow the formation of a government led by his party. Both Ciudadanos and PSOE have said that they will never keep Rajoy as prime minister.

His likely successors are Cristina Cifuentes (president of the Madrid region), Soraya Sáenz de Santamaría (current deputy prime minister) or former member of the governing council of the European Central Bank, José Manuel González de Páramo, a candidate to a technocratic government of consensus similar to the one presided over by Mario Monti in Italy.

Still, that the conservatives are in a strong position cannot be denied. PP got 29 percent of the vote and 123 seats in the last election. The polls before the explosion of the latest corruption case expected them to capture 30 percent of votes and between 120 and 130 seats.

The Confused

Ciudadanos, the party created by the IBEX 35, is struggling to present itself as important in this election. One element of its aggressive strategy is to defame Podemos, accusing it of being financed by Venezuela and Iran and of wanting to launch a communist revolution that will destroy the eurozone.

It also reminds voters that Iglesias supports Alexis Tsipras, who is now cutting Greek pensions. Because Spain’s electorate skews older, pensions will play a central role in the election. Ciudadanos uses this issue to portray itself as the anti-Podemos.

But Ciudadanos has been an electoral disappointment. Before the December election everyone called Ciudadanos “the Podemos of the Right” — borrowing the phrase from the Bank of Sabadell’s president, who in 2014 declared that the business class needed its own Podemos.

Polls leading up to December’s election predicted that Ciudadanos would come in second — maybe even first — with above 20 percent of the vote. But the polls were guided more by desire than reality: Ciudadanos won just 13 percent and forty seats.

This was not enough to help PP — which won 123 seats — reach the 175 seats necessary to form a government. Right after the election Ciudadanos instead entered into a pact with PSOE, preventing Sanchez from joining forces with Podemos and Catalan separatist forces.

The PSOE and Ciudadanos coalition asked PP and Podemos to support them and make Pedro Sanchez president. Rajoy and Iglesias both rejected such an option, which has been the main cause of the last few month’s political blockage.

The Catalan Question

Catalonia will be decisive in Spain’s future. The majority of the Catalan people are moving toward leftist anti-austerity positions — seeking to either define Catalonia as a nation federated with Spain or declare their independence.

This explains the erosion in support for Convergència i Unió, the coalition that has governed Catalonia for almost thirty of the last forty years.

Convergència i Unió has traditionally supported PP and only became an independentist party three years ago. The coalition split over the issue, with Christian democrat Unió rejecting the independentist strategy.

Unió has since disappeared from both the regional and national parliaments. Convergència fell from first to the fourth place among Catalan voters in December’s election, winning only eight seats (down from sixteen in the 2011 election).

The new political force is En Comú Podem, a party with leftist, nationalist, and libertarian roots. Last year, it won control of Barcelona, and it has the chance of coming in first in Catalonia again. In the last election it won 25 percent of votes and twelve seats, a remarkable debut.

The polls give En Comú between thirteen and fifteen seats in the coming election.

The independentist Esquerra Republicana de Catalunya (ERC) — which came in second in December — got 16 percent of votes and nine seats. It might win more votes on June 26 from Convergència’s liberal and independentist electorate and end up with ten seats.

PSC (the Catalan PSOE) garnered 15 percent of votes and eight seats in the last election, six less than in 2011. Its position on Catalonia’s territorial issues have split the party, giving strength to ERC and En Comú, which hold more democratic positions on the issue. Catalan independence will continue to trouble the Socialists.

It’s also important to note that Ciudadanos and PP — both of which are deeply anti-Catalan — only got five and four seats respectively, coming in fifth and sixth among Catalan voters in the last election. Their results are expected to remain similar.

The Uncertain Future

The coming election will irreversibly change Spanish politics.

Spain might end up with a government of the Right, which will probably continue to enact austerity policies that exclude a whole generation and eliminate the prospect of a sustainable domestic demand.

Sooner or later, these policies might take us to disaster. The election’s aftermath might also lead to the PSOE’s suicide: the Socialists would have to support such a government for it to form.

On the other hand, there is the possibility of a leftist government. Unidos Podemos would lead, but only with PSOE’s hesitant support and the Catalan separatists’ conditional one.

Such an administration might oppose the European status quo. Unidos Podemos prefers to point to Portugal — rather than Greece — when asked about a possible confrontation with the troika, which means that Unidos Podemos prefers calm reforms rather than direct confrontation to the EU austerity hawks.

If such a strategy were not allowed, such a government would need large support and mobilization across the European Union.

In fact, it is possible that Germany would aim at crushing a government of this kind as soon as possible, like it did with Syriza in Greece. The deteriorating global economy might also make Unidos Podemos’s expansionary economic plans difficult to realize.

However, a government of the Left could also mean a new era in Spain, one that would face fierce opposition from the Spanish elites. Whatever happens tomorrow, we know there are difficult roads ahead.