Posted on March 23, 2015 by the XM Investment Research Desk at 10:16 am GMT
The Sunday elections for the region of Andalusia, in Southern Spain, were keenly watched in order to check how the country’s anti-establishment parties were faring. Spain will go through a general election which is scheduled to take place by the end of the year. Andalusia is the country’s most populated region but is not necessarily indicative of Spain as a whole as it is a largely agricultural and tourist-dependant region with an older population – traditionally a stronghold of Socialists. The region also has the country’s highest unemployment rate.
In the event, the two main traditional Spanish parties; the Socialists and the conservative Popular Party, came in first and second respectively, leaving behind parties such as the far left Podemos and the centre-right Ciudadanos. Podemos and Ciudadanos came in third and fourth respectively. Therefore although the new parties made a strong showing, it was not enough to win the elections.
One significant change was that the two ‘establishment’ parties that have ruled Spain since the 1980s, together polled around 60% compared to 80% in the previous election. Therefore, the role of the alternative parties could become important in participating in coalitions and becoming junior partners in government come an inconclusive General Election.
Both Podemos and Ciudadanos are strongly against corruption, but where they differ is that Ciudadanos has much more moderate economic proposals that are not as revolutionary as Podemos. Podemos is riding high as Spaniards have become disenchanted with years of austerity and high unemployment.
The loser from the election was the ruling Popular Party, which saw its share of the popular vote fall to around 26% from 40% three years ago.
Andalusia will also be a test of how the smaller anti-establishment parties are willing to cooperate with the larger establishment political forces. This is because the Socialists, although they have won, have not managed to capture an overall majority in the local parliament and will therefore have to count on alliances with smaller parties in order to get things done.
To sum up, Spanish politics seems to be changing away from the traditional 2-party system without however getting rid of the old guard, which is still largely calling the shots. The chances of Podemos imitating the success of its ideological cousin SYRIZA in Greece do not appear high right now, although there is still a long way to go until the general election. The ruling conservatives have also paid a heavy price for their economic reforms, which might have saved Spain from an even worse downturn but have not translated into a lower unemployment rate and rising living standards. Overall, the domino theory that says that after SYRIZA in Greece other anti-establishment parties will capture power in peripheral countries and threaten the existing arrangements within the Eurozone has not received a boost after the Andalusian elections.