27 April 2016

Looking at the calendar, there are still a few days left until May 2 – when the constitutional deadline for Spanish MPs to vote in the new Prime Minister expires. However, after a last-ditch round of talks between King Felipe VI and political leaders failed to yield any result, it is now certain that Spaniards will have to re-vote at the end of June (in fact only a couple of days after the UK’s EU referendum).

How are the main parties shaping up for the new Spanish election campaign?

The centre-right Partido Popular (PP) of caretaker Prime Minister Mariano Rajoy wasn’t involved in most of the exhausting discussions that followed the inconclusive December election. Rajoy saw his offer for a grand coalition shot down outright by the Socialist Party (PSOE), and therefore essentially decided to keep out of the fray and watch PSOE leader Pedro Sánchez fail in his own bid to become new Prime Minister.

As I argued on this blog before, this wait-and-see approach could well play to Rajoy’s advantage in the upcoming election campaign. He will be able to claim that he was ready to compromise in the interest of Spain, but Sánchez wasn’t. However, other factors could turn voters away from PP. More corruption cases involving members of Rajoy’s party have been unveiled since December. The ‘Panama Papers’ leak recently claimed the scalp of José Manuel Soria, the caretaker Industry Minister, who quit over his links to offshore companies. The stock argument that these are all isolated cases is getting increasingly harder to make.

PSOE leader Sánchez will most likely be in the toughest spot, as he will come under attack from both flanks. Rajoy will accuse him of putting his personal ambition before Spain’s political stability. The anti-establishment party Podemos will stress that Sánchez had the opportunity to muster a fully-fledged left-wing government – but simply refused to do so (although in reality the price was set too high for him by Podemos in the form of a binding referendum on Catalan independence). In addition, PSOE will hold an internal ballot to pick its frontrunner for Prime Minister in the June general election. Potentially another challenge for Sánchez, although he may well end up being the only candidate – a way for his fellow party members to show they still trust him to be the best person to run for the top job. Conversely, it currently looks pretty much certain that Rajoy will stand again.

As regards Podemos, the party led by Pablo Iglesias has begun to witness its first internal tensions and appears to be declining slightly in most opinion polls. However, Iglesias potentially has an ace up his sleeve: running on a joint ticket with the United Left party (Izquierda Unida, IU). This option was already being discussed ahead of the December election, but talks broke down. It is now on the table again, with a better chance of success. Such an alliance would pose a serious threat to PSOE – which would face the risk of being overtaken as the largest left-wing force.

Finally, the centrist newcomer Ciudadanos will hope to be rewarded by voters for trying to make PP and PSOE talk to each other over the past few months. The key challenge for party leader Albert Rivera will be to keep his aura of novelty intact – not least because Podemos will likely continue to depict him as just another member of the establishment.

Will the outcome be any different this time around?

Elections are unpredictable by definition. However, the latest opinion polls (the website Electograph helpfully collects all of them) suggest the outcome of the June election would be only marginally different compared to December.

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PP would again be the most voted for – perhaps with a slightly larger lead over PSOE, but still well short of an absolute majority. The key question would be whether a centre-right alliance with Ciudadanos, currently on an upwards trend, would command a sufficient number of seats in parliament this time around.

The Podemos-IU ticket also has the potential to change things. It is perhaps worth bearing in mind that, back in December, IU secured almost one million votes – but that translated into just two MPs due to the effects of Spain’s electoral law. It has been calculated that, if the two parties had run together in the December general election, they would have won 85 seats – only three fewer than PSOE. In other words, if Podemos and IU eventually agree to run together in the June election, this could increase the chance of a left-wing, anti-austerity majority in the Spanish parliament.

What happens if nothing changes?

Indeed, in two months’ time the polls may well deliver exactly the same outcome as four months ago. We would be looking to further rounds of tricky government formation talks, presumably not helped by what promises to be another pretty acrimonious campaign – where parties will blame each other for having to repeat the elections.

The precedent of Greece tells us that what was impossible after the May 2012 general election, a grand coalition between the centre-right New Democracy and the centre-left PASOK, became possible after the June 2012 re-run election – helped by the fact that New Democracy made gains in the second election compared to the first one, while PASOK experienced losses. The same could happen between PP and PSOE in Spain, although the fate of PASOK after joining that grand coalition would certainly make Sánchez think twice.

In the meantime, the Spanish Economy Ministry has already slashed its GDP growth forecasts for this and next year. A row with the European Commission appears to be round the corner, given that Spain will inevitably overshoot its deficit targets again. Furthermore, the separatist regional government in Catalonia is pushing ahead with its ‘roadmap’ to a breakaway from Spain. Challenges are piling up, and they are starting to look way too big for a caretaker government.