Down but Not Out

Yesterday, I was in New Haven having lunch with Juan Linz, the greatest social scientist Spain has produced, and other friends when the results from the regional elections in Andalusia started coming in.   It had been a given on the part of not just political commentators but also the pollsters that the conservative Partido Popular would win an historic victory in the region - likely with a comfortable absolute majority - and send the Socialists, the PSOE, into opposition for the first time ever.  Imagine how stunned we were, then, when with 50% of the vote counted, our smart phones lit up with the news that the PSOE looked on its way to winning the election. 

In the end, the PP, who came to power nationally in November, did manage to get its historic victory in the south. By the slimmest of margins – 40.7% to 39.5%, they beat the PSOE and increased their seats in the regional parliament by 3 for a total of 50.  In contrast, the Socialists suffered a large loss of 9 seats to end up with 47. The only other party to clear the hurdle to enter parliament was the former communists, the IU, who doubled their seats to 12.  With 55 being the magic number to govern in a majority, the hoped for victory turned into a bitter defeat for the Populares, given that the probability of the PSOE and the IU not forming a coalition is, according to another guest at lunch who is also a prominent political scientist in Spain, ‘precisely zero.’

 As the noted political journalist Iñaki Gablando explains in a terrific video blog, José Antonio Griñán, the head of the PSOE in Andalusia and current President of the region, won the triple crown in this election. By opting to call the elections off cycle from the national elections, he ensured that the PP’s electoral tsunami did not hit the south with its full force as it surely would have had the elections taken place last November.  Griñán will maintain the PSOE’s hold on the Presidency and deny the PP’s ‘reconquista’ of ‘infidel’ Andalusia.  And, finally, his own position within the party, which had been very weak, has been strengthened.

In part, these results may show how little room for maneuver exists for governments in this crisis. While Prime Minister Mariano Rajoy claims that the results – more than 425,000 fewer votes than the PP won in Andalusia in November and a 5 percentage point drop – will not change his intention to implement austerity measures, this may signal the support the Spanish are willing to give for a program of adjustment is more limited than imagined. 

They also raise the question of whether the corruption in the PSOE in the south will ever be addressed.  Even many people who are not committed PP supporters hoped the Socialists would be turned out, both because some alternance in power is healthy for a democracy and to force the PSOE to clean up its act.  Popular disgust at the ERE scandal, where Socialists in the region were accused of cronyism and the fraudulent channeling of more than half a billion Euros in retirement payments, was not enough to keep the PSOE from returning to power, though the perceived corruption of many of the party’s regional leaders accounts for some of the decline. However, the question now is whether the addition of IU to the regional government will provide some sort of transparency or if Griñán will heed the message delivered at polls and attempt to reform the party.

Fade to Grey

Last week, I was in Sevilla, the capital of Spain’s southern region, Andalucia, where a political earthquake is expected in March.  Recent polls suggest that the conservative Popular Party will win an absolute majority in the regional elections with 45% and hand the governing Socialists, the PSOE, a massive loss in the part of the country that has always been considered their stronghold and where they have governed continuously since 1982. This is on top of the PP’s big win nationally in November.

The mood among PSOE members in the south is rather grim. One former elected official told me he thought the party could disappear.  While such a fear is unwarranted – this is not a replay of the utter collapse of the governing UCD in 1983 – there are good reasons to be concerned about the state of the party.

The party is hemorrhaging members.  The latest party census shows that they have fewer than 220,000 members, about a fifth of what the PP has, a very different situation from Northern Europe where social democratic parties dwarf others in size as in Sweden or are roughly equivalent to their main conservative opponents as in Germany. Half of the PSOE’s members are between 46 and 65 years old while merely about six and a half percent are under thirty, suggesting that it is neither renewing itself generationally nor appealing to young people.

And while across Europe, the governing parties seen as responsible for the economic crisis have been thrown out of office, it is interesting that in Spain at least, the distribution of votes shows that the masses of unemployed Spaniards were just as likely to vote for the PP as everyone else.  Of course, maybe it's not surprising that the left, in this case the PSOE, did not get a slight bump as one would normally expect from those most affected by the crisis and cuts in social spending.  This is part of the prevailing 'throw the bums out' mentality everywhere on the continent.

Still, I think the implications of the crisis are somewhat different for social democrats in Southern Europe than in the North.  For the parties in the South, the road ahead, and back to power, is likely to be more difficult. The PSOE, the PS, and PASOK were formed after the democratic transitions of the late 1970s and do not have a history of being mass, class-based parties in the way, say, that the German SPD does.  Especially in Spain and Greece, where they came to power quickly, they have been electoral and patronage machines with few roots in civil society.  In Portugal, the PS's weak social ties are explained by slightly different factors but they nonetheless are a fact.

It is noteworthy in the Spanish data presented above that students are the one group where support for the conservative PP was well below average.  Students, of course, form one of the sectors hit hardest by both the crisis and potential cuts, given a high youth unemployment rate, rising university fees and a strongly dualistic labor market. But the PSOE did not pick up their votes either; indeed, students were also less likely on average to vote for the Socialists. Their votes went disproportionately to the communists and the recently formed UPD, a sort of liberal party. This rather highlights one of the problems the left in the south may face in terms of their social base. For reasons related to patterns of party formation and organization stemming from their transitions, the left in the South has a double task. In contrast to northern European socialists who must convince their members and supporters about the viability of a left program in an age of austerity, those in the South have the added complication of figuring out who their base is. 

The Pain in Spain

Today Mariano Rajoy, Spain’s newly elected President, gave his first speech in his new role before Parliament and laid out his plans to deal with the crisis. Like Monti, his counterpart in Italy, Rajoy’s proposed cuts fall at the lower end of estimates these countries were assumed to need. In the case of Spain, that amounted to a deficit reduction of somewhere between €15 and €30 billion in cuts and taxes. There is extensive coverage in El País of Rajoy’s plan, which offers €16.5 billion in cuts to the Administration and other measures.

Some of the highlights of Rajoy’s plan include:

·         Linking pensions to the consumer price index, the only increase in the proposal

·         Freezing public sector employment except for the armed and security forces and basic public services

·         Reform of regulatory bodies

·         Eliminate early retirements to bring the real age of retirement into line with the official age and not repeal the law raising the retirement age to 67 (that the PP had opposed while in opposition)

·         Shifting public holidays to the nearest Monday to avoid the ‘bridge’ holidays where any holiday now typically turns into stretch of days off to the closest weekend

But the biggest change is the Administrative cuts that he views as a fundamental restructuring of the State. Without elaborating the mechanics or specifics of cuts, this reform promises what all current plans in Europe intend to do to deal with the crisis, whether they come from parties in power or the opposition.

There is a focus on eliminating waste, reducing costs and improving services but without real proposals, that is the sort of meaningless rhetoric that often characterizes these debates and that the markets punish because they mask the lack of resolve. The devil is in the details and presumably over the next few months, the specifics will become clearer but there is little evidence that efficiency gains will be sufficient to tackle the deficit. There are fewer proposed tax increases than the new Italian Prime Minister offered in his budget that is to be voted on in Rome later this week. Rajoy has proposed however, similar to the Italian plan, a tax cut for firms that hire young workers and women in order to tackle the high unemployment among those groups.

For its part, the main opposition party the PSOE has been relatively supportive while at the same time underscoring both doubts and concern for the concretization of the plan. The lack of new taxes raises questions for the Socialists about where the money to pay for this plan will come from and they are insistent that the welfare state in Spain must be defended and not dismantled.

For everyone, the lack of specificity ought to make us wonder whether, when the details finally do become clear, the pain in Spain will be considerably higher than this first speech suggests.

20-N was not the Worst Election Ever for the PSOE



PSOE

Contrary to the breathless headlines on virtually every story covering last week's Spanish elections, it was not the Spanish Socialists' worst election ever. True, they lost 4 million votes, 59 seats, the election and handed the conservative PP an absolute majority for the first time in history. But this was an election the PSOE expected to lose. No governing party would have survived having to make the cuts that the debt crisis forced them to; let's not forget this was the 5th European government to fall victim to the crisis. And it's not over: the outgoing Zapatero government cut €10 billion but to meet the target deficit of 4.4% of GDP next year, the new Rajoy team will need to find up to €30 billion in cuts and taxes that will be wildly unpopular. This is not a bad time to go into opposition.

Still, the party faces challenges on its road back.  They need leadership badly and the party will be electing a head in February; Rubalcaba, the party's sacrificial lamb of a candidate, can't be blamed for the election but he is too associated with the government blamed for the crisis. Others come with baggage: Carmé Chacon, former defense Minister, said recently "Let's see if anyone dares say that a Catalan woman cannot lead the Socialist Party," but the disqualifying word in that sentence may be 'Catalan'. Other regional leaders like Tomas Gomez or Jose Antonio Griñán are not doing well electorally on their home turf.  The best candidate by far, Patxi Lopez of the Basque Country, has made it clear he's not interested in the job.

Equally though, they need a credible program. Both the PSOE and the PP virtually ignored the indignados movement but one not need embrace the youthful protesters to understand that the lack of faith in the future resonates with both the young and the middle class.  Providing a response to that, once the immediate turmoil with the euro and the bond markets is past, will be the key to future electoral success . The PSOE, and this is true of much of the European left, is going to have to come up with a credible take on managing and encouraging growth in what is likely to be a prolonged period of stagnation. They cannot over-promise in terms of spending or social programs, tempting though that is for a party trying to get elected, but need to offer a plan of both cuts and sensible expenditures like long term investment in infrastructure, targeted education investment, reforming the dual labor market and pension system in ways that will eventually create jobs.

To do that, they are probably going to need to rethink their relationship with the trade unions and push for reforms to the collective bargaining structure and severance payments that helps those with jobs covered by agreements, but do not allow a substantial reduction in the unemployment rate or create conditions for external investment. This is not an easy thing to do, of course, especially for a party on the center-left. But these kinds of electoral defeats are precisely the time when parties have an opportunity to regroup. 

So what was the PSOE's worst election? 1979.  They had expected to win and were thrown into chaos when they did not.  What followed was a reconfiguration of the party, a purge of much of the left, a move toward the center and a platform that allowed them to come to power in 1982. Clearly the challenges they face now are different, as are the policy prescriptions to move the country forward. But this election does not mean that the PSOE need be consigned to a period of  long-term opposition if they take advantage of what the defeat offers them.