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In Spain’s Elections, the Left Wins, but the Economy Loses

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Tags Taxes and SpendingWorld History

04/29/2019

The center-left has been in decline all over Europe for several years. In countries like Germany, France, the Netherlands, and Italy, parties promoting “social democratic” policies have seen rapid declines in recent years. Indeed, the only party staying comparatively strong was the UK’s Labour, which on the way embraced full-on socialism under Jeremy Corbyn, though.

In this sense, Sunday’s elections in Spain are a clear outlier. The right-wing was hoping for a big loss for the ruling Socialists around Prime Minister Pedro Sánchez. With three choices, the traditional center-right Partido Popular (PP), the new far-right Vox, and the centrist Ciudadanos, three forces were hoping to replace - together as an alliance - the left-wing government.

Instead, they split the votes, and thus paved the way for a major win for Sánchez. The Socialists garnered 29 percent in total, increasing its parliamentary seats from 85 to 123 seats. They were followed by four parties between 10 and 17 percent: the PP with a historically bad result (17%), Ciudadanos (16%), the far-left Podemos (14%), and Vox (10%).

This makes a Sánchez government the only one possible, with him teaming up with Podemos and some smaller regional parties. This would be a very similar coalition to the previous one, which fell due to regionalists rejecting Sánchez’ 2019 budget. Despite receiving much support from the international community - he was very adamant about showing inclusiveness by having a cabinet which has been two-thirds female and making gender equality a focus of his campaigns - Sánchez was in danger of becoming the Prime Minister with the shortest time in office. He had only ousted the previous Prime Minister Mariano Rajoy in June of last year. Nonetheless, yesterday’s results showed him come out as the major winner.

This was not necessarily expected. Especially the Partido Popular had high hopes with its new leader, Pablo Casado. Casado reformed the party within his year as the new party leader by turning away from Rajoy’s technocratic, centrist policies. Instead, he became critical of a culture dominated by political correctness, and wanted to clamp down on abortion and immigration, arguing for a stronger border guard and the necessity for immigrants to adapt to Spanish culture. On economics, he proposed heavy tax cuts. Some saw behind this a “conservative revolution,” others just a turn to the nationalist far-right. Regardless of which, the approach seems to have failed. Casado is the big loser of the election, and it is not clear yet whether he can even hold on to power in the PP.

The other two parties usually considered right-wing both gained in the election, but not as much as expected. Ciudadanos was leading polls last year . In this sense, the result has been disappointing. But the number of seats for the party increased from 32 to 57. Ciudadanos and its leader Albert Rivera can be seen as a Spanish version of Emmanuel Macron’s En Marche: fanatically pro-EU, but domestically in favor of reforms that make doing business easier, reduce the tax burden and bureaucracy.

The far-right Vox meanwhile enters parliament for the first time in its short history (it was founded in 2013). In most regards , the party resembles most other new movements on the right in past years: being militantly anti-immigrant, while being overly vague and contradictory on everything else. Immigration should be constrained, mosques closed and Islam lessons in schools abolished. Economically, it wants to see major tax cuts, but without any reductions in government spending. Instead, it wants to increase the scope of the welfare state by introducing a monthly subsidy for each child in the amount of 100 euros, akin to the Polish model which has been failing there in the east. With so many promises that would send the economy down the gutter, it is surprising that the party only gained ten percent of the vote.

Then again, Spaniards simply found someone else for the position of Prime Minister that would make lots of promises . Pedro Sánchez will most likely continue to be Prime Minister. The winner of the evening happily proclaimed that “We’ve sent the world a message. We can beat the reactionaries and the authoritarians.” Whether the economy can survive it, remains to be seen.

Kai Weiss is the Research and Outreach Coordinator at the Austrian Economics Center and a board member of the Hayek Institute. Follow him on Twitter.

Note: The views expressed on Mises.org are not necessarily those of the Mises Institute.
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