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Don Quijones: Rajoy Horror Picture Show Nears Grisly Climax in Spain

Yves here. Don Quijones describes Rajoy’s record of misrule and how the major parties are jockeying in advance of its almost certain unraveling.

By Don Quijones, a freelance writer and translator based in Barcelona, Spain, and editor at Wolf Street, where this article was originally published

In Spain, the Eurozone’s fourth largest economy, the stage is set for a grisly finale of the Rajoy Horror Picture Show. In roughly seven or eight months (the exact date is still to be confirmed), Spaniards will vote in general elections that could dramatically reconfigure the country’s political landscape. For the first time in decades, the stranglehold of the two main parties over Spanish politics is under threat.

Spain’s establishment parties, Prime Minister Rajoy’s People’s Party (PP) and Pedro Sanchez’s so-called socialist party (PSOE), are facing sustained pressure from both sides of the political spectrum: two new parties – Pablo Iglesias’ anti-austerity movement Podemos and Albert Rivera’s Catalonia-based center-right grouping Ciutadans (or Cuidadanos in Spanish) – enchant the disenchanted masses. As I reported in November last year, if Spain’s new political forces continue to capture the hearts and minds of the disaffected that now represent a very large minority, if not the majority, they could hammer a deep nail into the country’s two-party system. While winning the elections is an almost mathematical impossibility, either party could become kingmaker, or kingbreaker!

Recent municipal elections in Andalusia, Spain’s most populous region, could offer an interesting foretaste of what’s to come. The PSOE came out on top despite losing a large number of seats, followed by the PP in second place with its worst ever electoral performance in the region. Podemos rounded out the podium with 15% of the seats, and Ciutadans came in fourth with 9%.

No party came even close to achieving an absolute majority. For the PSOE to continue governing the region, it will need the support of at least one of the other three parties. For the moment no such lifeline has been offered. And while Podemos remains the PSOE’s most natural partner, the new party has set make-or-break conditions that the PSOE seems loath to accept, including a purge of its most scandal-tainted representatives from the region.

If similar results were to occur at the national level, it would almost certainly spell the end of the Rajoy Horror Picture Show. Just as in Andalusia, the outcome would be a hung parliament or a relatively weak coalition government — either of which would be preferable to the current state of affairs.

Oh, The Horror!

After riding a tidal wave of public anger to landslide victory in the 2011 elections, Rajoy has come as close to absolute power as any political leader (a term I use in the loosest possible sense) could hope in an ostensibly democratic country. Rather than using that power wisely or productively, Rajoy’s government has thoroughly abused it, levering the absolute majority it has enjoyed in parliament for five main ends:

  • To insulate itself from the investigation of myriad political funding and banking scandals;
  • To preserve its own privileges;
  • To push through deeply unpopular austerity measures, including unprecedented tax hikes;
  • To serve the interests of the business and financial elite, either by changing laws or by granting taxpayer funded bailouts (see above);
  • And finally, as public anger begins to blossom, to resurrect the ghosts of Francoist repression.

Once the horror show is finally over, the legacy that Rajoy leaves behind will be one of heightened social and political division, economic and political repression, widespread unemployment and poverty, and endemic corruption. Without its comfortable absolute majority, his government would have imploded long ago. Indeed, in any self-respecting, semi-functional democracy (which unfortunately excludes a growing number of countries these days), the government would have been forced to stand down with the very first revelations of systemic, party-wide corruption.

Instead, Rajoy’s government, by far the most corrupt of Spain’s comparatively short democratic history, is able — with a straight face — to launch a new anti-corruption bill aimed at “regenerating” the country’s democracy. Among the bill’s provisions is one that bans rich individuals and companies from donating funds to Spain’s political parties. Yet in what can only be described as a gaping loophole, the very same individuals and companies are allowed by the same law to donate as much as they want to the parties’ foundations.

A Phantom Recovery

Meanwhile the government congratulates itself on saving the economy. Who cares if more than 50% of Spanish youth – the country’s supposed long-term hope – are without work? Those that do have jobs are lucky if they last more than six months; many less fortunate folk get trapped on the endless carousel of internships institutionalized by Rajoy’s labor reforms (read: No Country for Young Men). As for the country’s children, one in three live in extreme poverty or at risk of social exclusion.

Perhaps the most worrying aspect of the Spanish economy’s “recovery” (read: remission) is the explosive rate of debt creation. Between 2011, when Rajoy took over, and 2014 Spanish public debt grew from 69.2% of GDP to 97%; in other words, by almost half. And this despite the fact that the same government has raided 40% of funds from the nation’s pension reserves and begun including the proceeds of crime and prostitution in its GDP calculations.

Spain’s external debt – one of the primary causes of its initial financial collapse – is once again rising at an alarming rate after a brief dip between 2012 and 2013. According to El País, at €1.7 trillion (161.7% of GDP) Spain boasts the world’s second largest external debt in absolute terms (behind the U.S. of course) and the largest in relative terms.

In other words, even after suffering the worst financial crisis in living memory, Spain continues to repeat the same old mistakes. As the purse strings are loosened consumption of foreign-produced goods once again rises and Spanish corporations’ debt-fuelled M&A binges are back on the front pages of the financial press – almost all of it funded, of course, by foreign creditors.

As long as the faith of those creditors in Spain’s phantom recovery holds strong and conditions remain relatively stable elsewhere (especially in Latin America, where Spanish firms are heavily exposed), there shouldn’t be too much trouble ahead – at least not in the short term. But what if the European economy’s slowdown deepens?

Just as important, what if political instability on the domestic front begins to rise? What if, say, Spain’s richest province, Catalonia, were to hold new elections aimed at cementing the region’s separatist ambitions (as is scheduled to happen on September 27 this year)? Or if Spain’s next general elections returned no clear government? What if both of the two political newcomers (Podemos and Ciutadans) chose not to sully their clean image by joining forces with one of the two establishment parties? Naturally, every effort would be made by the establishment to bring them into line, but what if that failed?

If the solution is a coalition government between the deeply unpopular PP and PSOE — a possibility that has already been raised by a number of senior figures from both parties — the deeply disenfranchised and disaffected public might not react with apathy, but with rage.

Cleary, a great deal lies at stake in Spain’s forthcoming elections. The prospect of heightened uncertainty is unlikely to be welcomed in Brussels. Given how much turbulence has been generated by the recent elections in smallish Greece, just imagine what could happen if political instability were to suddenly rise in the euro zone’s fourth largest economy.

As such, while the Rajoy Horror Picture Show may be coming to a welcome end soon, its climax could still be difficult to stomach, and not just for Spain.

Banking mayhem spreads to Madrid and tax haven Andorra. Read…  Rich Man’s Bank Hit by Bank Run, Collapse, “Bail-In”

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25 comments

  1. Jay Moses

    all of this assumes that the national election occurs as scheduled. the “Francoist repression” alluded to by Quijones may easily lead to the assumption of “emergency” powers including delaying elections for some indeterminate time. Desperate times lead to desperate measures. I do not think Rajoy has any plans to leave office anytime soon.

    1. Maju

      Rajoy will leave office and be replaced by someone else but the Twin Party is well entrenched via the control of the PSOE by the NATOist leadership, Pérez-Rubalcaba notably, who has put a more handsome middleman named Sánchez, whose main worry seems to annihilate anyone in the party who may even remotely think in terms of social responsibility.

      The change will not come any time soon unless there are major surprises. Sure: each of the Twin Party brands alone won’t be able to rule but that has also happened in Italy and Germany, and in Greece before Syriza, and they resorted to the obvious grand coalition “solution”.

  2. Brooklin Bridge

    I’d be curious to know if Podemos is like Syriza? Is it doomed to be yet another bitter disappointment, eating it’s own promises and calling the escaping air of its self deflation, “honorable compromise”?

    Democracy doesn’t seem to well in these situations where the population has been repeatedly terrorized and abused by it’s own government in a captured and essentially fake process of self representation and self determination.

    1. Cugel

      Syriza is trapped between the desire of its citizens to remain in the Eurozone, and the refusal of the Troika to act in a rational manner and get rid of the Memorandum that cannot be implemented. They are trying to sell empty rhetoric not because they are “sell outs” but because they have no choice. It’s that or allow themselves to be forced out of the Eurozone, with catastrophic consequences for the already damaged economy. It’s easy for bloggers to sit and criticize them from distant lands, but it flat doesn’t matter what Syriza may attempt to do from here on out. They do not have the power to really capitulate and remain as Greece’s governing party, and they don’t have the public or the bureaucracy behind them to defy the Troika and be forced out amid withdrawal of the ELA and total economic collapse. Either way they would instantly lose virtually all support, their left wing will bolt and their party fragment, triggering new elections, the opposition will close in for the kill. They will follow the path of PASOK, and the extreme left and the Nazis will compete for whatever’s left of Greek public policy amid scenes of bloodshed.

      Spain’s economy is in nowhere near as bad shape as Greece’s despite the alarming youth unemployment figures, which gives them much more time. Syriza’s collapse may come in a couple of months. Podemos has a long way to go before they are given the power to form a government, but they are steadily gaining support and may soon be the largest single party. We are only in the intermission between Acts I and II in Spain.

      I would be surprised if Spain failed to hold elections. Even if the governing parties lose massive support, they may still be able to cobble together a coalition that excludes both Podemos and the extreme right. That would be the most likely scenario. And of course that will lead to more dissent and more repression, possibly eventually an outbreak of terrorist violence like in North Africa after the crushing of the Arab Spring. THAT might give the authorities the cover to impose some kind of rule by emergency decree but that won’t work out any better for Spain than it did in the 1930s Germany. A renewal of the Dictatorship is always a possibility, but will only lead to more chaos and violence.

      1. Santi

        Well, after the Andalusian regional elections commented in the article, in May we have elections in most regions and local. In those local a number of towns, possibly including Madrid, Barcelona and other big ones, will change. This is not sure but there are strong probabilities. This would shift the discourse, as marginalizing the alternatives would no longer be possible, and, further, people supporting “the winner horse” might change their vote. Later, in September, there are election to Catalonia parliament. And the General elections before November. There is a lot of action this year…

        Most people notices that the things are not working, even in the macro. For instance, GDP growth is forecast to 2.8% based on 2014Q4 0.8%. This last number was due to a deflator of -0.6%, which means that the GDP grew 0.2% (which would project to a 0.8% yearly in nominal terms). This while public deficit is officially 5.7% (60b€), but debt grew 67b€ in 2014… In the micro people sees things flat, not strange with a strong deflation (not so much as in Greece, but still more than 1% yearly).

        The looming perspective is that, even after parcels of power are won in local and regional elections, a Grosse Koalition between PP and PSOE (we call them PPSOE) keeps us four more years with our hands tied, much like happened in Greece. But let’s fight one battle at a time…

          1. Brooklin Bridge

            If Syriza’s, “Hope is on the way” has proved too close to American doublespeak, then, “We Can” or “We are Able” seems a tad close to, “Yes we can” for comfort no?

          2. Santi

            This is a tough question. They have given mixed signals. The best they offer is a very transparent environment and promises to fight corruption. See for instance their expenses documented, or the page for participation. They also are donating substantial portions of their salary as public charges. In practice they have done some very top level decisions that I didn’t like in terms of transparency. I think Syriza is far more mature in this respect.

            But even when they show strong leadership with disregard for the rules they themselves set up, often it works because people is tired of the very bland and anodine leadership from Rajoy, who incarnates the worst you would expect of a prototypical Property Registrar of a provincial town, which is what he was before he started his career as apparatchnik in the PP.

            A lot of people in Spain will vote Podemos just because they are better than the incumbents, and the incumbents have repeatedly shown they are greed and cannot be trusted. I guess the management of the Andalusian parliament, and later whatever results they get in the regional elections, will be very important. In their work as Europarlamentaries they are for the moment doing a good job.

            1. John Jones

              Santi

              very transparent environment and promises to fight corruption

              That is something that bothers me. It is the same thing SYRIZA does. Those things are obviously all well and good to implement and things that people want. But what about the problems of belonging to the E.U and Euro cause. The trade imbalances, the rolling back of labor rights, having a currency that does not reflect your economy and other neo-liberal economic policies. Deindustrialization etc etc. Do they address these? Do they offer alternatives to the E.U and Euro?

              Does Podemos want to belong to the E.U and Euro as much as the leadership of SYRIZA does?

      2. Brooklin Bridge

        Syriza is trapped between the desire of its citizens to remain in the Eurozone, and the refusal of the Troika to act in a rational manner…

        Syriza as pure victim is no longer credible. Have you been reading any of the NC posts on this?

        1. Oregoncharles

          Yes, and that remains the best description.

          Personally, I think their only good option is to hold a referendum: “This is the best we can do within the Euro; Yes or No?” Or, I suppose, a new election. But I’m not there, any more than you are.
          And once again: it’s a long game, more political than economic (something Yves is naturally inclined to forget). Everything’s a waiting game until elections in more countries put more balls in the air. Especially Spain, maybe France. Britain isn’t in the Euro, but they face game-changing elecitons, too.

      3. Calgacus

        Cugel: Syriza is trapped between the desire of its citizens to remain in the Eurozone, and the refusal of the Troika to act in a rational manner and get rid of the Memorandum that cannot be implemented.
        The problem is more that these criminally insane Memoranda have been implemented and caused catastrophes. Some polls going back to 2014 do show majorities of Greeks preferring the Drachma to the Euro.

        They are trying to sell empty rhetoric not because they are “sell outs” but because they have no choice. It’s that or allow themselves to be forced out of the Eurozone, with catastrophic consequences for the already damaged economy.
        So the real problem is this groundless belief, particularly among “educated” “elites”, like finance ministers, not ordinary people – that leaving, being forced out of, the Eurozone would be a catastrophe, rather than a blessing after a few months of transition. The closest comparison is Argentina, which did quite OK after it said g’bye to “basic economic errors”. As Mark Weisbrot notes, the differences of Greece’s situation to Argentina’s tend to be in Greece’s favor. Varoufakis’s critique of Weisbrot – just isn’t a critique – as “MMT” = ‘ not making “basic economic errors” ‘ shows.

        I think it is pretty clear that going from good to bad outcomes, the possible policies can be ordered thus: 1) Good Euro 2) Negotiated Grexit 3) Forced Grexit and then 4) Default within Euro 5) Status Quo, remaining in Bad Euro Suicide Pact.
        But 1, 2 and 3 are pretty close. And 4 & 5 are close to each other also. Number 4, which some imprudently extol – is doing exploratory surgery on an operable cancer. But making sure to leave half of it in so metastasis and death is merely postponed. The important thing is to exit austerity, to exit the sadism of the bad Euro, the faux monnaie (Parguez)- which is supposed to mystically benefit its victims. Whether 1, 2 or 3 is best is arguable – but not too important. They’re far better for everyone than 4 or 5.

        The thing to remember is

        “The sound internal economic system of a Nation is a greater factor in its well-being than the price of its currency in changing terms of the currencies of other Nations.”

        This is from the message of which FDR said in 1937 – “I’m prouder of that than anything I ever did.” His Wireless to the London Conference torpedoing the Euro-esque plotting of the day to impose worship of “fetish[es] of so-called international bankers” on the world. Except for some obsolete allusions, it is the best, most concise start to sensible thought and avoiding “basic economic errors” on international monetary economics.

  3. EoinW

    I’m puzzled how winning the election is a mathematical impossibility. if either reform party got every vote wouldn’t they win? So how does that make it mathematically impossible?

    Perhaps a better question to ask is if it is reasonably possible to bring about meaningful reforms in any of the western democratic systems? What must it take, murdering citizens in the streets? Even then, if the system is built to thwart change then what hope for reforms?

    Is it not time to call out our pseudo-democracies for what they are: a system for the 1% to rule the 99%.

    1. Santi

      It is not very well redacted, I guess. In Spanish we use “matemáticamente” in a similarly meaningless way as “literally” in English. What he means is that to win the elections either Podemos or Ciudadanos should get to 35% or 40% of the votes, and well distributed geographically, while the other gets around 20% and the mainstream parties get down to 10% each or so. Looks close to impossible not mathematically, but sociologically. See the opinion polls. I love the median graphic and how it evolves with time. Currently Ciudadanos is having its opinion honeymoon, but it will not last. PP has turned its cannons; they no longer point at Podemos but at Ciudadanos. :)

  4. paulmeli

    “Is it not time to call out our pseudo-democracies for what they are: a system for the 1% to rule the 99%.”

    This has been the reality for some time and the response continues to be “kick the can down the road” denialism.

    Virtually no one has any answers, so we will continue to drift into the iceberg, re-arranging deck chairs on a ship without lifeboats.

    1. Oregoncharles

      An answer: the Green Party, http://www.gp.org.
      Assuming, of course, that an electoral rebellion wouldn’t simply be overthrown. I think that’s a very real possibility, although it didn’t happen (yet) in Greece. I also think we need to know, and the only way to find out is to hold that election.

      Is that a “mathematical” possibility, in our system? they’ve certainly made it as difficult as possible, but the real barrier is in peoples’ heads. What would it take to overcome Americans’ complacency and habit? Probably about what it took in Greece. Not something we really want to wish for.

      On another approach: there are now calls for a Constitutional Convention, via the states, from the anti-corporate personhood movment – at least Move to Amend. This, also, would be a form of peaceful revolution (I think calling a Convention for a restricted purpose is spitting in the wind). It’s a high-risk strategy, but one I think is called for.

      I hope that wasn’t a rhetorical question.

  5. Oregoncharles

    ” In big cities, the sight of people raiding bins for food or things to sell – a rarity in pre-crisis Spain – is no longer shocking. ”

    From the Linked Guardian article on Podemos. Is this picture at all familiar?

    1. Santi

      the picture of misery is familiar for me. It depends a lot if where you want to look at, or even at which part of the town you live in (because Spain is very unequal right now, much more than before the crisis). I have seen three different people raiding the same waste bins (in my street) every night. I have seen two couples, one with a van literally flooded with trash, the other one with a baby cart with a fruit box, fighting for the expired products that a big supermarked had dropped, and one saying the others: “you want them to sell them, we want them to eat them” bitterly.

      I have seen often people raiding and smoking half consumed cigarettes that other people throw at the entrance of the underground. All those things were mostly impossible to see 5 years ago and are too common right now.

  6. Oregoncharles

    from the same Guardian article on Podemos, but describing Greece:

    “the scenes of deprivation that one regularly sees on the streets of Athens, such as the queues at charity pharmacies where those excluded from state medical care go for medicines.”

    How much worse could a Grexit actually be? There must be a lot of Greeks asking that.

  7. John Yard

    It appears that Podemos made a relatively poor showing in the Andalusian elections . I notice that the hope expressed above is for a paralyzed government after the national elections. Not exactly optimistic.
    Does anyone have any analysis of this ? It is striking that after so many years of no growth/failure/crisis/forlorn hope that so little opposition has appeared to austerity. Of course , it is the same in the US. The Obama years have very effectively stifled change in the US, except at the margin.
    Here in the US it is remarkable that the parties playing ‘good cop, bad cop’ have been effective at persuading the population to accept the worst of a bad bargain. I am showered with mail telling me that the world will end due to some Republican machination – vote for Hilary !

    1. Oregoncharles

      I blame complacency and ingrained habit, especially in the US (can’t say about Spain).
      I shudder to think what it will take to break those habits, but we’ll eventually have to.

  8. Phil

    What is it with Spain? As long as I can remember its been a basket case. Spain threw out its intellectual and middle class (Jews and Muslim Arabs) between the late 15th and early 17th centuries. Did Spain ever really recover from that? Look like it hasn’t.

    Spain forced out the Jews in the same year that Columbus was sponsored by Ferdinand. Jews and Muslims either had to convert or leave. Most left. Another stupid move by Spain.

    The Moors (Muslims) took a bit longer to extirpate. Spain made the Moors stop bathing; they destroyed the great Moorish baths. Isabella insisted that the “barbaric” native practice of bathing in the New World be wiped out; she boasted about having taken only two baths in her entire life.

    Ignorance seemed to accelerate after those expulsions. Illiterate and largely crude Catholics took charge; those were the ones that settled the New World – basically, barbarians.

    Today: Bullfights. Stupid, city-wide tomato slinging contests. Small village contests where horsemen try to pluck the heads from live chickens suspended upside-down from a clothesline-like wire.

    Sure, they’ve got Cervantes, Grenada, Gaudi, the Alhambra, Segovia, de Falla, Machado, Lorca, etc., but there is something that appears to be almost stupidly self-destructive about Spanish culture.

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