BBC News - Business

Monday, 21 December 2015

Parties in Spain Wrestle to Form a Government

MADRID - The leaders of four political parties in Spain found themselves struggling on Monday with the question of which party could form a government, a day after fractious election in which support for the two establishment parties plummeted and voters flocked to two insurgent parties that might now be able to act as kingmakers.

The governing conservative party of Mariano Rajoy, Spain's incumbent prime minister, received the most votes on Sunday, but it lost its parliamentary majority, leaving Mr. Rajoy with an uphill task to stay at the helm of either a minority or a coalition government.

Mr. Rajoy's Popular Party won 123 of the 350 parliamentary seats, down from 186 in the last election, in 2011. The Spanish Socialist Workers Party got 91 seats, compared with 110 four years ago, when it was ousted from power. Two emerging parties - Podemos and Citizens - will enter Parliament for the first time. Podemos won 69 seats and Citizens took 40.

The election was a resounding manifestation of the political fragmentation in Spain, where mainstream parties have alternated control of the government since the restoration of democracy in the late 1970s.

Among various scenarios for a possible coalition government, the only one that would ensure a parliamentary majority would be an alliance of Mr. Rajoy's Popular Party and the opposition Socialist, led by Pedro Sanchez.

Such a "grand coalition" has governed in countries like Germany, but it would be unprecedented for Spain.

It would also require resolving a very difficult relationship, given a heated confrontation between the parties' leaders during the campaign. In the final televised debate before the election, Mr. Sanchez accused Mr. Rajoy of being dishonest, referring to the prime minister's failure to take responsibility for corruption scandals, including one centered around the Popular Party's former treasurer.

The Socialists insisted on Monday that they would stick to their electoral pledge and would not facilitate another term as prime minister for Mr. Rajoy. Cesar Luena, the secretary of the Socialists, said at a news conference that the executive committee of his party would demonstrate "prudence and responsibility" and would allow Mr. Rajoy, as leader of the party that got the most votes, to attempt to form a government. But Mr. Luena said that his party would "vote no to Rajoy" when Parliament reconvenes next month.

"What came out of the ballot boxes is a monumental mess," Bieito Rubido, editor in chief of the conservative newspaper ABC, told Spanish television on Monday, "Almost everybody has lost".

The one possible exception, Mr. Rubido and other commentators have suggested, is Podemos, which established itself on Sunday as the largest anti-establishment party in Spain. Podemos was formed early last year as a far-left, anti-austerity party, modeled in part on the success of Syriza, the governing party in Greece. However, Podemos failed on Sunday to supplant the Socialists as Spain's main left-leaning group.

The leader of Citizens, Albert Rivera, forecast on Monday that a minority government could run Spain by striking a series of temporary, issue-by-issue agreements with other parties, including his. The Citizens party transformed itself last year from a regional party in Catalonia - fiercely opposed to the Catalan secessionist movement - into a national party with a pro-business economy agenda. But while Citizens also managed a breakthrough on Sunday, it came in a distant fourth, with too few seats to allow Mr. Rajoy to join with it to form a center-right coalition.

Pablo Iglesias, the leader of Podemos, said at a news conference on Monday that his party would "extend a hand" to those willing to push through major overhauls, but without committing to support any particular new leader. "All of us must do some thinking in the coming weeks, but particularly the old parties," Mr. Iglesias said. The election, he added, needed to result in "a new political system" in Spain.


Podemos and Citizens wanted the elections to end a political system dominated by two parties, and they came close to achieving that goal.


Together, Mr. Rajoy's conservatives and the Socialists won 50.7 per cent of the votes, their lowest combined total and down from 73.4 per cent in 2011.

But the election was also generational. Mr. Rajoy, 60, who was already a government minister in the 1990s, trumpeted his experience in contrast with that of untested challengers. Among his opponents, Mr. Sanchez, the Socialist leader, is 43; the Podemos leader, Mr. Iglesias, 37; and Mr. Rivera, the leader of Citizens, 36.

Mr. Rajoy also warned that any change of tack, after a 2012 bailout of Spanish banks and years of fiscal belt-tightening under his conservative administration, could once more detail Spain's economy, which is expected to grow 3 per cent this year, outpacing that of most other European countries.

The Socialists failed to shake off the legacy of their previous time in office, from 2004 to 2011, during which the global financial crisis helped push Spain into recession and caused jobless to soar. The party has also been entangled in corruption scandals, including a court investigation into the embezzlement of public funds earmarked for the unemployed.

Mr. Sanchez could struggle to remain in charge of his own party unless he can muster enough support to form an alternative coalition government, as his Portugest counterpart, Anotnio Costa, has done. In October, a center-right coalition won the most votes in Portugal's election, but it was then ousted from office in a parliamentary vote after Mr. Costa formed an improbable alliance with radical left-wing parties.

Mr. Rivera, the Citizens leader, told the television station La Sexta on Monday that the "hot potato" was now in the hands of the Socialists.

The Eurasia Group, a political consultancy, predicted in a research note that the most likely outcome would be for a Socialist minority government, "supported by Podemos on the left and Citizens on the right," with Mr. Sanchez responsible for holding together a highly tenuous and fragile coalition.

"In spite of the significant differences that separate the three parties, they could find some common ground on a number of areas, such as a drive against corruption and tax evasion, the introduction of income support measures for low-income workers and the unemployed, a revamp of active labour market policies and a reform of the electoral system," Federico Santi, a London-based political risk analyst, wrote in the Eurasia Group research note.

Source: http://www.nytimes.com/2015/12/22/world/europe/spain-elections-government.html?_r=0