Spain's elections: a right turn?


Spain's new Prime Minister Mariano Rajoy was smiling last night. How long will that smile last, given the awesome scale of Spain's economic crisis?


Denis Doyle

Madrid - Spain's right-wing Popular Party won an easy victory as expected yesterday. Mariano Rajoy, their leader, will become Prime Minister. The PP took 44 percent of the vote, the Socialists 29 percent and the rest was divided among smaller parties. So a landslide for the right, right?

But voters were not really turning rightwards, more likely they were looking heavenwards and hoping. This was very much an election about giving the "other guys" a chance rather than embracing a new political program.

And speaking of political programs, the PP managed to win its landslide without really revealing much about what it plans to do to lift Spain out of its economic crisis: unemployment is 21.5 percent and rising; last Friday Spain was having to pay close to 7 percent interest on its bonds.

In the crowd of supporters dancing to 1970's disco tunes outside PP headquarters last night, it was difficult to pin anyone down on just what Rajoy's plans are.
A group of three young women in their mid-20's were giddily texting friends and waving flags when I asked them what they expected Rajoy to do to ease youth unemployment, currently 45 percent. Their designated spokesperson, Cristina, said, "He will do something." What? "I don't know." Then she added, "We trust him."

The problem for Rajoy is that Spain's outgoing prime minister, Jose Luis Rodriguez Zapatero, has already started Spain down the path of austerity. The result, predictably, was a rise in unemployment and a growth slowdown that leaves the country poised on the brink of recession.

Misael Morate, a small businessman from Majorca, said that Rajoy definitely had a program, aimed primarily at loosening up the labor market and lowering taxes on Spain's small to medium-sized businesses. 80 percent of the country's economy according to Morate is made up of these smaller types of enterprise.

Challenged about how Rajoy can lower taxes given Spain's national debt, Morate acknowledged the tax cuts may not come into place right away. His country is like an unconscious patient in the emergency room, "In order to resuscitate the man in the emergency room takes time," Morate said.

The other thing is the doctor needs to be in the emergency room overseeing patient care and in Europe today prime minister's are not the ones who administer the medicine. The fate of euro zone countries overwhelmed by the financial crisis is in the hands of the European Central Bank and other institutions based in Brussels. Rajoy cannot cut taxes because he needs revenue to pay down Spain's debt, but he can cut government spending - adding to the unemployment figures which will reduce tax revenue anyway and increase government spending in the short term as it pays off workers.

No wonder he hasn't revealed his plans. There is really nothing much that can invent to help Spain as things stand now.