Spaniards to Give Election Verdict on Bailout, Crisis, Graft

  • Four-way race set to leave no party able to govern alone
  • Prime Minister Mariano Rajoy maintains lead in final surveys

Spaniards are voting in the tightest election since the country’s return to democracy, with four parties in the running and no clear winner in sight.

The election will show how much life is left in the two-party system that saw Prime Minister Mariano Rajoy’s People’s Party and its traditional rival, the Socialists, alternate in power for the past 33 years. After a six-year economic slump and a raft of corruption allegations against both, two new groups -- pro-market Ciudadanos and anti-austerity Podemos -- have emerged to challenge the status quo, part of a broader trend of disruption among traditional political powers in Western democracies.

“We’re going to get a snapshot of just how badly hurt the two-party system really is, and see whether the new parties can take over the establishment, or are simply part of a supporting cast,” Antonio Barroso, a London-based political analyst at Teneo Intelligence, said in an interview.

More than 36 million Spaniards are eligible to participate with 350 parliamentary seats at stake. Voting will end at 8 p.m. local time. Exit polls will give the first indication of the outcome as soon as ballot booths close and results will start to arrive shortly after. Rajoy said after voting in Madrid that he was told there was good turnout, while Socialist leader Pedro Sanchez said after casting his ballot that he could “smell change.”

37 percent of the electorate had voted as of 2 p.m. in Madrid, almost 1 percentage point below 2011 elections, according to the Interior Ministry.

Support Wanes

Spain’s disenchantment with its traditional political class is part of a wider phenomenon that’s seen voters embrace new faces. With candidates including Donald Trump and Bernie Sanders challenging mainstream party lines in the U.S., figures like radical anti-establishment Greek Prime Minister Alexis Tsipras and Canadian Premier Justin Trudeau and his youthful optimism have swept aside conventional opponents.

Rajoy is limping toward the ballot, with the 45 percent support he commanded in 2011 cut to as little as 26 percent in final opinion polls. He’s asking voters not to put the economic recovery at risk and has warned of the dangers of a pact between Podemos and the Socialists.

The traditional parties have been tainted by corruption allegations and economic mismanagement that have intermittently blighted Spain since its return to democracy in 1978. They’ve seen the unemployment rate soar to more than 20 percent three times in 30 years and failed to fix the divisions between temporary and permanent jobs in the labor market. Officials linked to both parties were at the heart of the savings banks system that collapsed during the financial crisis, bringing the economy to its knees.

Voter Frustration

Podemos and Ciudadanos have tapped into voters’ frustration in different ways. Podemos calls for the end of an elitist system while Ciudadanos is aiming to make Spain more competitive and more transparent. Neither have experience of governing at a national level.

“A wind of change is blowing in Spain,” said Geoffrey Minne, an economist at ING Bank in Brussels. “Traditional parties are likely to be challenged and could well lose their dominance. It is likely that a fresh approach could lead to important changes in the political system, and notably, on the accountability of the government.”

A Gesop poll published by El Periodic d’Andorra Thursday showed the PP at 26.2 percent with the Socialists in second place with 21 percent. Podemos had 20.4 percent, and Ciudadanos had 15.9 percent.

Throughout the campaign, 60-year-old Rajoy said the party winning the most votes should take the lead in forming a government. He warned against a grand coalition of “losers,” invoking the Portuguese election in October, where a left-wing alliance ousted a conservative government that had the most votes.

Party Positions

Without a clear victory, the People’s Party will need an ally in government. The Socialists and Podemos have made it their mission to oust the PP, while Ciudadanos leader Albert Rivera has repeatedly said he won’t enter a formal coalition if he’s not prime minister.

However, the 36-year-old has said it is important for Spain to remain a stable country and keep populists out. In a Dec. 18 interview, Rivera hinted that he’d offer some form of support to the PP rather than see an alliance including Podemos take power.

Economists surveyed by Bloomberg News this month said the best outcome for Spain would be a PP government supported by Ciudadanos. Fourteen of the 20 respondents said that combination would offer the best long-term prospects for the economy.

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