27 June 2016

Spaniards went to the polls for an unprecedented re-run general election yesterday. The first observation to make is that the vote failed to break the current political deadlock. In fact, the distribution of seats in the lower house of the Spanish parliament does not look very different from the inconclusive general election that took place on 20 December 2015.

Spanish general election, 26 June 2016 (seats)

Partido Popular (PP) 137
Socialist Party (PSOE) 85
Unidos Podemos (UP) 71
Ciudadanos 32
Others 25

Spanish general election, December 2015 (seats)

Partido Popular (PP) 123
Socialist Party (PSOE) 90
Podemos 69
Izquierda Unida (IU) 2
Ciudadanos 40
Others 26

As widely expected, the centre-right Partido Popular (PP) of acting Prime Minister Mariano Rajoy was again the most voted for and secured 137 of 350 seats – 14 more than six months ago, but still 39 short of the 176 needed to command an outright majority. The Socialist Party (PSOE) finished second with 85 seats, down from 90 in December. The new Unidos Podemos (UP) alliance, comprised of the anti-establishment party Podemos and the hard-left Izquierda Unida (IU), came third and won 71 seats – unchanged from the December election. The centrist Ciudadanos finished fourth with 32 seats, eight fewer than six months ago.

One big winner…

Rajoy was undoubtedly the big winner of the night. Compared to the December election, the total number of votes cast countrywide fell by nearly 1.3 million (see the table below). Yet, PP saw its vote tally improve by nearly 670,000. A remarkable result, not least because the party had been hit by more corruption scandals in the interlude between the two general elections. However, as I noted on this blog, Rajoy had been quite clever in keeping out of the fray and let the other big parties waste time and energy in exhausting – and, from a certain stage onwards, clearly pointless – government formation talks after the December election. Furthermore, Rajoy did pretty well at playing the card of experience and stability during the second election campaign. The market turmoil that followed the UK’s vote to leave the EU on Friday morning may well have given him a last-minute boost.

…and several losers

The other Spanish political leaders have very little to celebrate. PSOE managed to did worse than what had already been a historically bad result back in December – losing a further five seats and some 120,000 votes. As a result, the leadership of Pedro Sánchez is looking increasingly fragile and the party’s negotiating leverage is also diminished. Socialist voters have probably punished their leader for rejecting the possibility of a leftist coalition after the December election and instead striking a tentative deal with Ciudadanos – a party that Sánchez himself had repeatedly labelled as ‘right-wing’.

Podemos leader Pablo Iglesias must be very disappointed too. The UP ticket hugely underperformed opinion polls and failed to overtake PSOE as the main left-wing force. The alliance managed to secure the same number of seats as in December, but lost over one million votes compared to six months ago. It had no multiplier effect – quite the contrary. The explanation is not immediately obvious. Some voters may have bought into the Socialist narrative that it was ultimately the intransigence of Iglesias that allowed Rajoy to stay on as caretaker Prime Minister for so long and pushed Spain into repeating the election. It is also possible that some longstanding IU supporters were not entirely happy about the merger with Podemos – and therefore opted for abstention this time around. More generally, Iglesias did face a harder second election campaign. He came a lot more under attack from all other party leaders compared to the previous campaign – precisely because literally every opinion poll was predicting that UP would finish second and potentially even muster a parliamentary majority together with PSOE.

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Finally, Ciudadanos suffered losses too – in terms of both votes and seats. My impression is that, throughout the inconclusive government formation talks, the party led by Albert Rivera ended up coming across as little more than an (unsuccessful) intermediary between PP and PSOE – whose participation in a hypothetical new government would not be decisive anyway. This sounds like a plausible explanation as to why Ciudadanos lost nearly 400,000 votes in this re-run election, most certainly to PP.

What happens next?

The main scenarios are broadly the same. The key difference is that PP now holds 52 seats more than PSOE – up from 33 after the December election. This certainly strengthens Rajoy’s case that he should therefore stay in power, and increases the pressure on Sánchez to let PP at least form a minority government and get on with business. Even more so now that the post-Brexit negotiations have come to feature prominently on the list of challenges Spain will face in the coming weeks and months – along with the possible fine for breaching EU deficit rules and the Catalan independence push.

Such a decision would almost inevitably come with a cost in terms of further eroding the Socialists’ core support. However, the other options (a three-way coalition PSOE-Ciudadanos-Podemos and a leftist alliance relying on separatist parties) all proved unviable during the previous coalition talks. With even fewer seats than six months ago, I am not sure Sánchez will want to embark on the same painful negotiating process again.

As regards Rajoy, he has already made it clear that the grand coalition with PSOE remains his preferred option. However, the numbers tell us that he would potentially also have another alternative: a four-way alliance involving Ciudadanos, the Basque Nationalist Party (which already backed the centre-right government of José-María Aznar in 1996) and the Canarian Coalition. Together, the four parties would hold 175 seats in the lower chamber of the Spanish parliament – only one short of an absolute majority. Clearly not your archetype of long-term political stability, but perhaps just about workable.

In any case, a weak government is again the least bad outcome Spain can hope for – exactly like six months ago.