The rise of Spain’s final hope

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Something is lurking in Spain. The situation in Europe’s fifth largest economy has been bleak ever since its property bubble burst in 2008, causing a sharp contraction in Spain’s markets and a financial crisis that is still dragging on seven years later. Unemployment sits at around a fifth, with youth unemployment riding at around half, the second-worst in Europe after Greece. Government debt is 85% of GDP and its sovereign debt bonds are only two notches above junk. Even by the lowly standards of post-crisis Europe, Spain’s future looks exceedingly disheartening.

It was not always this way. The country was an economic success story and a fiscal model. After joining the European Union in 1986, it embarked on a period of strong economic growth, piggybacking generous European investment. It became a byword for good times; the economy grew, in real terms, strongly, year on year. Property prices doubled in two decades. Spain had held its first elections since 1936 in 1977, but by the beginning of the following century, it looked every bit the part of a functioning, stable democracy, alternating between left and right.

Supporters-of-Greeces-opp-009The hailed “elasticity” of Spain’s banks turned out to be an unmitigated weakness as bank after bank after bank went under and needed to be rescued, desperately exposed to and dependent on a property market that in places had lost 80% of its value. The economy plunged into recession as the government more than doubled its debt in four years holding up banks that had borrowed unsustainably themselves. As the economy worsened, tax receipts went into freefall, the social security bill into a dizzying ascent. Debt skyrocketed. In 1986, household debt was 35%. In 2005 it was 105%. People began to drown in debt and Spain’s social fabric seemed to be falling apart at the seams.

After three years of trying, the PSOE socialists were dumped unceremoniously from office in late 2011 as the exceedingly unpopular José Zapatero was cheered from office. Though no-one seemed to cheer his eventual replacement. Mariano Rajoy, the charmless leader of the right-wing PP party, with its origins in Franco’s dictatorship, won because of discontent with the socialists rather than because of an electorate enamoured with its policies. Spain, for almost the first time, began to look at all of its politicians with a kind of universal disdain.

Indeed, he turned out to be much of the same, except with an incredible penchant for political corruption. The whole country became embroiled in scandal after scandal, implicating everyone from the PP’s treasurer to tens of mayors to the King’s son-in-law (and, say some, the King himself). Political corruption became so rampant that it barely touched on people’s registers. Everyone became the same suit, tainted in one way or another by one scandal or another, never admitting anything and spouting the same politics in the same way.

Logo-PodemosIn the midst of this stood Pablo Iglesias, ponytailed and folky, in functional roll-neck jumpers singing group songs on stage. The University professor and political scientist, 36, had almost single-handedly created a party that, in 2014, rose from almost nowhere to startling success in the European elections. Podemos, “we can” in Spanish, his new party, were drastically different. They were neither the PSOE nor the PP. They espoused a radically different economic policy that sought to end the misery for ordinary Spaniards. The crisis, they said, had been caused by the elite and paid for by the masses. That, they said, was going to change.

When observing the workings of any party, the sheer functionality of Podemos is startling; almost nothing seems rehearsed. Speakers turn up on stage clutching scribbled notes, with the microphone already on, echoing the sound of being clunked onto a wooden lectern. All this might seem banal, but next to party appearances that seem polished to the point of alienation, this is exactly its appeal. Podemos is relatable not just in what it is saying but in the manner that it is saying it.

When observing the workings of any party, the sheer functionality of Podemos is startling; almost nothing seems rehearsed.

So what exactly is the party saying? After its startling success in the European elections, much was made of its policies, or, more precisely, its lack thereof. Podemos’s vision for Spain was grand but ill-defined. “More democracy” and “power to the people” abounded, but short of commitment to anything concrete other than a promise that its elected representatives would not be corrupt. The party had taken 1.2 million votes – nearly 8% – on a platform that barely seemed to exist.

Partly this lack of concrete policies lay in the party’s origins. The party was formed around meeting of ordinary people who congregated in some of Spain’s thousands of Plazas, or local squares, debating issues that affected their everyday lives. Podemos reflects down to its very core these hotchpotch, deeply working-class, extremely democratic origins. Its stylistic “o”, drawn on a purple background (a colour chosen simply to mark a difference with existing parties), reflects the circles people used to stand in and debate. Everything about it is traceably grassroots and authentic.

La-numero-dos-de-la-lista-de-Podemos-para-las-europeas--Teresa-Rodriguez--con-Pablo-Iglesias-al-fondo-This is one half of the dual draw of the party; a natural gravitation towards its openness and a jaded mistrust of those in authority. Podemos feeds on people’s discontent with the established elite in an almost identical fashion to UKIP and France’s Front National. It is a narrative that is all too familiar in an ailing Europe; optimistic, anti-establishment mavericks riding high in the polls. Their anti-elite, EU-cynical narrative is undoubtedly carved from the same wood. It plays on a common view that people have been sold down the river by a disinterested, self-aggrandising and frequently corrupt political class.

Podemos reflects down to its very core these hotchpotch, deeply working-class, extremely democratic origins.

Yet in some ways they are not so similar. It is anti-elitism at its best, yes. Their vote base, were the electorates swapped over, would be at least half the same. Nonetheless, they are selling different things. Farage is a little Englander, playing on people’s insecurities rather than their hopes. UKIP tells people they have much to lose. It is “look how scared you should be” politics. Podemos tells people that they have nothing to lose. It takes a brutally honest look at the state of the country and tells them that they can only do better.

The other half of its draw is its policies. Some are deeply local and, arguably, common-sense. It intends to create a register of all payments for politicians to tackle a pervasive culture of corruption that runs from local town halls to the country’s parliament. It wants to raise the minimum wage from the meagre €600 that is currently paid. Beyond that it gets far more radical. It wants a 35 hour week and people to retire at 60.

It is a narrative that is all too familiar in an ailing Europe; optimistic, anti-establishment mavericks riding high in the polls.

Podemos-asturiasBucking the existing consensus, it advocates a renegotiation of the country’s “unrepayable” debt. It wants to let banks fail, and for shareholders to lose invested money. It wants a renegotiation of the core purpose and powers of the EU. Buoyed on by the recent success of Syriza in Greece, it underlines that ordinary Spaniards should not have to suffer any more. Analysts draw parallels between the parties, but they underestimate the differences in circumstance.

Podemos, similarly to  Syriza, is a fascinating study in what can be achieved under direct democracy. It is also a cautionary tale of complacency amongst the political classes; “ignore us at your peril” is the party’s key, if obviously unspoken, message. It is sending a message to the heart of Spain’s broken political system in Madrid, just like Syriza in Athens. Soon, it will be sending, if polls are correct, the same message to Brussels.

The latest polls give the party 28% of the vote and 32% of the seats; a plurality, but short of a majority. That would put them in control of any future government. If it refused to meet its debt obligations, or wanted treaty changes, the EU would be in serious trouble; Spain is a major economic player and would hold considerable clout in negotiations in a way that Greece does not.

That should worry the European Union far more than it does. If Greece leaves the Euro, which, as negotiations hobble to a startlingly bleak conclusion, looks likely, the ceiling may well cave in. But the pillars would still be standing. The likelihood is that Europe could rebuild after a “Grexit”. That would not be the same with Spain.

Spain may still be laying low in Greece’s shadow, but if we continue to ignore it, that could be at our peril.

It should go without saying, but Spain is not Greece. If Podemos capitalise on their popularity, and, with their vote looking unlikely to slip significantly before the next elections, Greece could pale into insignificance. Spain’s economy is massive and its role in Europe far more significant. Podemos’ rise might be making the comment pages of The Guardian for now, but by the elections in December 2015, it will probably be making the front pages of every paper in Europe.

Podemos is aiming to change Spain. Yet it is Europe that should be extremely worried about the consequences of that change. Spain may still be laying low in Greece’s shadow, but if we continue to ignore it, that could be at our peril.

Stephen Rainbird

Photographs: Finacial Times,, and Vertele

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