Did we win yet?

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No, Mr. Tsipras, Spain Didn't Reject Austerity

Marc Champion writes editorials on international affairs. He was previously Istanbul bureau chief for the Wall Street Journal. He was also an editor at the Financial Times, the editor-in-chief of the Moscow Times and a correspondent for the Independent in Washington, the Balkans and Moscow. He is based in London.
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After Spain's fragmented election result over the weekend, Greek Prime Minister Alexis Tsipras was one of the few people who claimed to understand what happened: It was, he tweeted, a defeat for austerity.

I'm not sure what it was, but it wasn't that.

As expected, Prime Minister Mariano Rajoy's ruling Popular Party won the most votes and seats, while losing its majority. But in the contest between two newcomer parties -- the left-wing Podemos and pro-business Ciudadanos -- it was Podemos that came out top, surging in opinion polls during the final week as Ciudadanos slumped.

There is now no obvious combination available to form a stable coalition government -- Spain's two-party system is broken. Rajoy will make the first attempt, but without support from the main opposition Socialists it's difficult to understand how he can succeed. 

For Tsipras, though, it was enough that Podemos scored so well, with 20 percent of the vote, to argue that the Socialists might just therefore be able to cobble together a motley crew of populist and nationalist parties to govern.

Let's leave aside for a moment the question of whether austerity was defeated in Greece (Tsipras is now implementing the same austerity policies he once fought). There was no such triumph in Spain.

Of the four main parties to emerge from Sunday's vote, three favor sticking to the euro area's spending restrictions and avoiding demands that could jeopardize Spain's membership in the common currency. These three parties include the mainstream Socialists, and together they won 253 of the 350 seats in parliament. Podemos, the only one of the top four that would consider following in the footsteps of Tsipras and his Greek Syriza party, won 69 seats.

Moreover, even Podemos softened its rhetoric recently to distance itself from Syriza. And no wonder: Tsipras's anti-austerity charge turned a fragile Greek recovery and return to credit markets in 2014 into a re-bankrupting of the economy and his own capitulation in 2015.

Greeks admired Syriza's pluck in standing up to the German man; Tsipras won re-election on the strength of that performance. But it was an experience no sane nation should want to repeat.

With an economy growing at more than 3 percent and unemployment gradually falling, Spain has even more to lose from such an experiment than Greece did. If Podemos does end up in government, let's hope it skips Tsipras's fruitless anti-austerity crusade and goes straight to the part where the Greek leader realized that he had to work creditors on the best terms he could negotiate. Spaniards know their Don Quixote.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

To contact the author of this story:
Marc Champion at mchampion7@bloomberg.net

To contact the editor responsible for this story:
Jonathan Landman at jlandman4@bloomberg.net