Spanish Parliament in Disarray after Elections

December 22, 2015Spainby EW News Desk Team

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Prime Minister Mariano Rajoy's center-right Popular Party endured a heavy blow over the weekend, falling short of the seats needed to govern accordingly, but still maintaining a majority, notes USA Today. The ruling government will have to share power with opposition parties, but the process will remain contentious, as incumbent officials must govern alongside leftist parties. King Felipe VI will act as broker and nominate a prime minister for approval by parliament.

Spain has no cohesive government to speak of, and the state of the economy could grow worse if the political wrangling continues. The election defeat should come as no surprise, given the poor state of the economy, but to the government's credit, Spain made numerous reforms that fostered growth. However, unemployment remains staggeringly high, and many Spaniards remain stuck in low-paying jobs.

The unemployment rate remains over 20 percent, and certain structural reforms implemented over time worsened the plight of many working people. For instance, a reform that gave employers more leeway in laying off contract workers shoved many people out of the workforce on a permanent basis. The Spanish government has touted austerity as a model that yielded results, but overall output remains weak, and the IMF pointed to deep vulnerabilities within the economy.

Parliament Composition

The PP won 123 seats in parliament, but failed to win 176 seats that would have led to a majority rule. The Podemos Party gained 69 seats, with the Socialist Party attaining 90 seats, and the pro-business Ciudadanos grabbed 40 seats. Podemos is an anti-austerity party akin to the Syriza party of Greece, and Podemos leader Pablo Iglesias champions Spain's sovereignty over the will of Germany and the European Commission.

Ciudadanos won partly because its anti-corruption platform, a message that resonated with many voters in the wake of numerous political scandals. Meanwhile, the Socialists face growing pressure from the radical Podemos, a party that has already scared away many investors as Spanish bank stocks tumbled in reaction to the election results. A showdown with the European Commission is inevitable if the left gains a ruling majority, and a left-leaning Spain could shift the balance of power in the European Council and jeopardize German Chancellor Angela Merkel's influence within the organization.

What the future holds...

The makeup of parliament remains uncertain, but analysts suspect that leftist parties will indeed form a coalition against the PP. On the other hand, a fractured parliament would mean perpetual gridlock and a failure to achieve anything substantial. A leftist government would mean stable governance, much to the chagrin of austerity hawks, but the political pendulum is swinging in favor of the left as conservatives failed to improve the economy.

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