Spain: Greek-Style Populist Upset Unlikely
Despite rise in polls, Podemos remains far behind pro-European parties in Spain.
- Does the rise of the radical left-wing party Podemos mean that Spain will follow the bad Greek example?
- Links to Venezuela have stalled the rise of the Spanish radical left-wing party Podemos.
- Even if Podemos wins in Spain, it will be forced to form a coalition with a pro-EU party.
Could Spain follow the bad Greek example? The radical left Podemos party has risen to prominence in the polls with demands quite similar to those of Alexis Tsipras’s Syriza, including debt haircuts, nationalization of banks and strategic industries, unconditional minimum income and more power to the unions.
With Spain currently independent of Eurozone financial assistance, Podemos could theoretically implement its policies if it can convince investors to continue funding Spain’s budget deficit, expected to be 4.5% of GDP in 2015. A very big If.
It is very unlikely that Podemos’s Pablo Iglesias will be able to run a populist government like Tsipras in Greece for a number of reasons:
1. Podemos’ rise in the polls has stalled since December, as rising media attention has uncovered financial irregularities and Venezuelan links.
2. The pro-European mainstream was splintered but ultimately strengthened by the overdue emergence of a liberal protest party with sensible economic policies, Ciudadanos.
3. Even if Podemos does come first, it would be nowhere near an absolute majority as there is no winner’s bonus as in Greece. It would need a coalition partner for which only pro-European parties are available.
4. The Spanish parliamentary seat distribution system favors regionally focused parties, which helps PP more than Podemos.
5. Spain’s economic recovery is more advanced than Greece’s. By the time of the election, unemployment will have dropped from a peak of 26.3% to just above 22%.
Syriza is a liability for populists across Europe. The economic disaster Tsipras & Co. have caused in Greece within a record short period of time should be a warning.
Whether Syriza now makes a complete and embarrassing U-turn to keep Greece in the Eurozone or takes the country with it into the abyss of Grexit, most voters in Spain and elsewhere will not want to emulate that example and endanger the unfolding upswing.