Will the Spanish Prime Minister’s economic reform be enough to win the next election?

Anna Sonny, 7 August 2015

Spanish Prime Minister Mariano Rajoy, of the right-wing Popular Party (PP), delivered a budget this week that he hopes will boost his chances in the general election later this year. The budget includes tax cuts, more government spending, and a 1% increase in public sector pay – the first since 2009.

During the 2008 financial crisis, Spain and Greece were lumped together (along with Portugal and Ireland) as the problem regions of the Eurozone, with both experiencing huge debt crises and rocketing unemployment. But this year the two countries have emerged on separate paths; Spain, after keeping to austerity and making the necessary structural reforms, has been recovering, with growth of 1% in the second quarter of this year. Greece, on the other hand, spiralled towards economic collapse, defaulting on its debt to the IMF.

But will economic reform be enough to keep the PP in power? Recurrent scandals and corruption in the previously dominant PP and the Socialist Party have made Spaniards look elsewhere for political representation. The rise of the radical, left-wing party Podemos over the past year, and the emergence of Ciudadanos onto the nationwide Spanish political scene has altered the dominance of the two-party system in Spain. In regional and municipal elections earlier this year, both the PP and the Socialist Party lost significant ground; it looks like Spain now wants a different kind of reform.

Podemos has seen a slight decline in support over the past couple of months; it was previously sharing the lead with the PP and the Socialist Party but has slipped back into third place with 15.7 per cent of the vote. Greece’s crisis caused division in the party, who have close ties with Syriza, and are split over whether Greece should be making a deal with its creditors.

Ciudadanos has been described as centrist and reformist party; while Podemos and Ciduadanos occupy different spheres of the political spectrum, both parties are calling for democratic reform, and are riding on an anti-corruption rhetoric.

Rajoy has treated Spaniards to a budget that will hopefully help them to experience the effects of economic recovery. But will his economic reform be enough to win him the election this year? The wide support base of both Podemos and Ciudadanos shows that Spain now wants democratic reform.