Spain’s Insurgents Gear Up for New Attempt to Oust Rajoy

  • New parties’ gains in December created deadlock in parliament
  • Polls suggest Podemos may gain the most from repeat ballot

Spain’s insurgents are gearing up for another crack at the establishment.

Six months ago the anti-austerity group Podemos and the pro-market reformers of Ciudadanos won so many seats in their first general election that no one could form a government. When Spaniards go back to the polls on June 26, the newcomers will be looking to get into power.

Podemos has a new ally, Ciudadanos has a new strategy. And with the parliament delicately poised in a perfect deadlock after December’s vote, a handful of extra seats for either group could make a major difference to the outcome.

“The election will show just how entrenched is this new four-party system in which no one can govern on their own,” said Francisco Camas, a Madrid-based analysts at pollster Metroscopia. “Relatively small changes in certain districts could lead to decisive shifts when it comes to forming a government.”

Leader of left wing party Podemos Pablo Iglesias leaves a press conference at the Spanish parliament in Madrid

Leader of left wing party Podemos Pablo Iglesias leaves a press conference at the Spanish parliament in Madrid

Photographer: Gerard Julien/AFP via Getty Images

While Brits, French and Austrians have turned to Euroskeptic parties to express their frustrations, Spaniards shut out of the labor market by the economic crisis or angered by an epidemic of corruption have been divided between the Marxist university professors running Podemos and the business-school analysis of Ciudadanos. After public outrage at a party bribery ring cost caretaker Prime Minister Mariano Rajoy a third of his seats in December, the parliament suffered its first stalemate in the country’s democratic history.

For more on the historical shifts taking place in Spain, click here.

The result this time will determine whether the euro area’s fourth-biggest economy continues to play along with European budget rules or adopts the more confrontational approach favored by Podemos. The anti-austerity group wants to negotiate debt relief from creditors after government liabilities spiraled to more than 100 percent of output.

Investors are already getting twitchy and the extra yield they demand to hold Spanish 10-year bonds instead of German bunds has increased by 29 basis points to 139 since the last vote. Spanish stocks have underperformed equities in Europe and the U.S.

The biggest change from December may come among progressive voters, with Podemos on track to overtake the 137-year old Socialist party to claim second place after signing an alliance with the former communists. Those two parties won 6.1 million votes between them last time compared with 5.5 million for the Socialists. By joining forces, they’ll increase the number of lawmakers they get for the same number of votes -- and make each of their rivals’ seats more expensive.

Rajoy’s PP, running on its record of turning the economy around, is set to slip to 118 seats from 123 in December despite raising its vote by almost 1 percentage point to 29.6 percent, according to an average of pools calculated by Electomania. Podemos and its ally may jump to 86 seats from 71, while Ciudadanos may get 40 seats, the same number as in December.

The Socialists would be the biggest losers, shedding 10 lawmakers to 80. Even in 2011, running as the incumbents after four years of economic crisis, the party managed 110.

If the polls are right neither the progressive bloc of Podemos plus the Socialists nor the center-right alternative of the PP and Ciudadanos would be able to form a majority. With a broad consensus in Spain that an unprecedented third election would discredit the political class, Rajoy would be under pressure to step aside to facilitate a deal between the PP and its rivals, while the Socialists and Ciudadanos would face demands from the business community to accept that prime minister’s result gives him the best claim on forming a much-needed government.

To get past that impasse one of the group parties will have to reach out beyond its core support.

In December the traditional parties retained the support from most of the over 55s, while Podemos was the preferred option for younger voters, according to data from state-pollster CIS. Those between 35 and 54 were most divided and they may hold the key to any shift in the balance of power, according to Antoni Gutierrez, a Barcelona-based political consultant.

To target those voters, Podemos is set to mail rural voters for the first time after Decembers result earned it a boost in its public funding. Ciudadanos leader Albert Rivera has shifted his strategy. Six months ago, he signaled a willingness to help the PP keep Podemos out of power. This time, he’s ruled out helping Rajoy because of his ties to the party graft scandal. Rajoy denies any wrongdoing.

“If Rajoy continues nothing will change,” Rivera said in an interview last week. “How is he going to fight corruption if he protects the corrupt in his own party?”

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