Lessons from Spain for the Left

Spanish Elections

Dispatches From The Edge

May. 10, 2019

 

There were several lessons to take from last month’s Spanish elections, some special to Spain, others that resonate continent wide. Since the 28-member European Union is preparing to vote on the makeup of the European Parliament at the end of May, those lessons are relevant.

 

On the surface the outcome seemed pretty straightforward: Spain’s Socialist Workers Party (PSOE) picked up lots of seats—but not enough to form a government—the country’s traditional center-right Popular Party (PP) took a pounding, the ultra-right edged into parliament and the center did well.

 

But Spain’s politics are as complex as the country’s geography, and certainly not as simple as the New York Time’s analysis that the outcome was a “strong pro-European Union vote” that will allow Socialist Prime Minister Pedro Sanchez “to tackle Spain’s neglected economic challenges.”

 

For starters, the majority did not vote for the EU, but, to the contrary, against the devastation the huge trading bloc has inflicted on Spain through a decade of austerity measures. The Spanish Socialists ran on a platform of jobs creation, implementing a US-inspired “Green New Deal,” a 22 percent jump in the minimum wage and greater funding for education and science, all issues that run counter to the tight-fisted policies of the EU.

 

Indeed, if the European Union had been on the ballot it might have gone badly for Brussels, not exactly a Spexit, but hardly a ringing endorsement.

 

Part of the Socialist victory reflected the profound ineptness of the opposition on the right.

 

For more than 40 years, the Popular Party has been an umbrella for the Spanish right, ranging from conservative businessmen and small farmers to unreconstructed supporters of the fascist dictator, Francisco Franco. But when the left-wing Podemos Party won 20 percent of the vote in 2015, it unleashed centrifugal forces that smashed up the old two-party system that had dominated the country since the death of Franco in 1975.

 

Besides opening the political landscape to multiple parties, including the center right Ciudadanos , or “Citizens” Party, it put immeasurable strains on the Socialist and Popular parties.

 

In the case of the latter, the PP’s extreme right jumped ship and formed “Vox,” whose policies are little different than Franco’s: opposition to abortion, equal rights for women, gay rights, immigration, and regional autonomy. The Party won almost 11 percent of the vote in a recent election in Andalusia, Spain’s most populous province. It is currently part of the province’s ruling coalition, which includes the PP and Citizens, but underperformed in last month’ vote.

 

The PP’s turn to the right as a strategy to peel off Vox votes was a disaster. Women, in particular, felt threatened by some of the Party’s anti-abortion talk, and the PP’s candidates handpicked by Party leader Pablo Casado were underwhelming.

 

The Socialists also had their divisions. In 2016 the PSOE’s rightwing engineered the ouster of Sanchez after he considered forming a government with Podemos and several small regional parties. The rightwing of the Socialists then allowed the PP to form a minority government, a move that did not sit well with the Party’s rank and file.

 

Sanchez barnstormed the country, rallying the Socialist’s left wing and taking back the Party’s leadership seven months later. In this last election the PSOE stayed united, a major reason why Sanchez is in a position to form a government.

 

Was the election a victory for the center? There is not a lot of evidence for that. While Citizens did well—it bypassed Unidos-Podemos to become the third largest party in the parliament with 57 seats—most of its votes came from former PP members alienated by the Popular Party’s sharp turn to the right and the profound corruption that has enmeshed many of its leaders.

 

The PP, Citizens and Vox all pounded away at the Catalan independence movement and immigration, two issues that did not resonate very strongly with the electorate. A poll by Spain’s Centre for Sociological Research showed that voters were most concerned with unemployment (61.8 percent), corruption (33.3 percent) and the state of the political parties (29.1 percent). Only 8.9 percent felt immigration was a major issue, and Catalan independence was a concern for only 11 percent.

 

In short, when the right was railing away at the Catalans and immigrants, most of the voters tuned out.

 

The leftist UP also took a beating, dropping from 71 to 42 seats, but that was partly due to a falling out between the two major Podemos leaders, Pablo Iglesias and Inigo Errejon, and disagreements on how closely the leftist alliance should align itself with the Socialists. In contrast, the leftwing Catalan parties did well.

 

The Socialists now face two major problems.

 

First, there is the PSOE’s program that, if instituted, would certainly ease the austerity policies of the EU and the PP that have inflicted such pain on the bulk of Spaniards. While unemployment has come down from its height during the years following the 2008 financial crash, many of those jobs are low paying, benefit-free, temporary gigs.

 

A Green New Deal would confront climate change and create new jobs. Repairing the social safety net that the PP and the EU have shredded would not only make people’s lives easier, it would stimulate the economy.

 

But the EU is pressing for almost $28 billion in government spending cuts, that, if agreed to, would make much of the Socialists’ program stillborn. Faced with the demands of capital, on one hand, and the misery of yet more austerity, many socialist parties—with the exception of Britain’s and Portugal’s—have gone along with the strictures of the EU.

 

When they do, they pay the price: center-left parties all over Europe have been decimated for buying into the debt reduction strategy of the EU. Socialist parties tend to run from the left and govern from the center, but if Sanchez does that, the Party’s support will evaporate.

 

Secondly, there is the Catalan problem. While Sanchez has pledged to open a dialogue with the Catalans, he has steadfastly refused to consider their demand for a referendum on independence. The Socialist leader argues that he is constrained by the Spanish constitution that explicitly forbids provinces from seceding. But the constitution was drawn up only a few years after Franco’s death and is deeply flawed on a number of different levels, including giving rural regions greater representation than urban areas.

 

The refusal of Sanchez to consider a referendum makes “dialogue” an empty phrase. It is not even clear if the majority of Catalans would vote for independence, although the policies of Madrid—in particular the brutal crushing of a referendum effort this past October, and the arrest and imprisonment of Catalan leaders—certainly seems to have increased separatist sentiment. In the recent election Catalan independence parties won a majority in the Provence.

 

Sanchez may try to construct a coalition without the Catalan parties, which would be a major mistake. Many of the Catalan parties are more simpatico to the PSOE on economic and social matters than some of the other regional parties the Socialists will try to recruit to form a government. And, as the recent election showed, people want some answers to their economic problems.

 

The Socialists will certainly be attacked by the right if they allow a referendum, but the PP labeled them “terrorists” in this last election and the majority of voters didn’t buy it. The referendum could require a super majority—maybe 60 percent—to pass, because it would be folly to take the province out of Spain on the basis of a narrow win.

 

But the Catalan question cannot be dispersed with tear gas, billy clubs or prisons, and constitutions are not immutable documents.

 

For European parties on the center-left, Spain’s elections had a message: the old days of campaigning on left social democracy when you’re running for office and ruling with careful centrism once you get into power are over. People want answers.

 

—30—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Brexit and Spain: Europe On The Edge

The Brexit & Spain: Europe On The Edge?

Dispatches From The Edge

July 5, 2016

 

On the surface, the June 23 Brexit and the June 26 Spanish elections don’t look comparable. After a nasty campaign filled with racism and Islamophobia, the British—or rather, the English and the Welsh—took a leap into darkness and voted to leave the European Union (EU). Spanish voters, on the other hand, rejected change and backed a rightwing party that embodies the policies of the Brussels-based trade organization.

 

But deep down the fault lines in both countries converge.

 

For the first time since Margaret Thatcher and Ronald Reagan rolled out a variety of free market capitalism and globalization that captured much of the world in the 1980s, that model is under siege. The economic strategy of regressive taxes, widespread privatization and deregulation has generated enormous wealth for the few, but growing impoverishment for the many. The top 1 percent now owns more than 50 percent of the world’s wealth.

 

The British election may have focused on immigration and the fear of “the other”—Turks, Syrians, Greeks, Poles, etc—but this xenophobia stems from the anger and despair of people who have been marginalized or left behind by the globalization of the labor force that has systematically hollowed out small communities and destroyed decent paying jobs and benefits.

 

“Great Britain’s citizens haven’t been losing control of their fate to the EU,” wrote Richard Eskow of the Campaign for America’s Future, “They’ve have been losing it because their own country’s leaders—as well as those of most Western democracies—are increasingly in thrall to corporate and financial interests.”

 

While most of the mainstream media reported the Spanish election as a “victory” for acting Prime Minister Mariano Rajoy’s Popular Party (PP) and defeat for the left, it was more a reshuffle than a major turn to the right, and, if Rajoy manages to cobble together a government, it is likely to be fragile and short lived.

 

It was a dark night for pollsters in both countries. British polls predicted a narrow defeat for the Brexit, and Spanish polls projected a major breakthrough for Spain’s left, in particular Unidos Podemos (UP), a new alliance between Podemos and the Communist/Green party, Izquierda Unida.

 

Instead, the Brexit passed easily and the UP lost 1 million votes from the last election, ending up with the same number of seats they had in the old parliament. In contrast, the Popular Party added 14 seats, although it fell well short of a majority.

 

A major reason for the Spanish outcome was the Brexit, which roiled markets all over the world, but had a particularly dramatic effect on Spain. The Ibex share index plunged more than 12 percent and blue-chip stocks took a pounding, losing about $70 billion dollars. It was, according to Spain’s largest business newspaper, “The worst session ever.” Rajoy—as well as the Socialist Party (SP)—flooded the media with scare talk about stability, and it partly worked.

 

The Popular Party poached eight of its 14 new seats from the center-right Ciudadanos Party and probably convinced some UP voters to shift to the mainstream SP.

 

But Rajoy’s claim that “We won the election. We demand the right to govern” is a reach. The PP has 137 seats, and it needs 176 seats to reach a majority in the 350-seat parliament. The Prime Minister says he plans to join with Ciudadanos, but because the latter lost seats in the election such an alliance would put the PP seven votes short. An offer for a “grand alliance” with the SP doesn’t seem to be going anywhere. “We are not going to support Rajoy’s investiture or abstain,” said Socialist Party spokesman Antonio Hernando. An abstention would allow the PP to form a government.

 

Which doesn’t mean Rajoy can’t form a government. There are some independent deputies from the Basque country and the Canary Islands who might put Rajoy over the top, but it would be the first coalition government in Spain and a fragile one at that.

 

Part of that fragility is a scandal over an email between Rajoy and Jean-Claude Juncker, head of the European Commission, that was leaked to the media. The Commission is part of the “troika” with the International Monetary Fund and the European Central Bank that largely decides economic policy in the EU.

 

During the election Rajoy promised to cut taxes and moderate the troika-imposed austerity measures that have driven Spain’s national unemployment rate to 22 percent, and a catastrophic 45 percent among young people. But in a confidential email to Juncker, the Prime Minister pledged that, “In the second half of 2016, once there is a new government, we will be ready to take further measures to meet deficit goals.”

 

In short, Rajoy lied to the voters. If the PP had won an absolute majority that might not be a problem, but a coalition government is another matter. Would Ciudadanos and the independents be willing to associate themselves with such deceit and take the risk that the electorate would not punish them, given that such a government is not likely to last four years?

 

Unidos Podemos supporters were deeply disappointed in the outcome, although the UP took the bulk of the youth vote and triumphed in Catalonia, Spain’s wealthiest province, and the Basque country. What impact UP’s poor showing will have on divisions within the alliance is not clear, but predictions of the organization’s demise are premature. “We represent the future,” party leader Pablo Iglesia said after the vote.

 

There is a possible path to power for the left, although it leads through the Socialist Party. The SP dropped from 90 seats to 85 for its worst showing in history, but if it joins with the UP it would control 156 seats. If such a coalition includes the Catalans that would bring it to 173 seats, and the alliance could probably pick up some independents to make a majority. This is exactly what the left, agreeing to shelve their differences for the time being, did in Portugal after the last election.

 

The problem is that the SP refuses to break bread with the Catalans because separatists dominate the province’s delegation and the Socialist Party opposes letting Catalonia hold a referendum on independence. Podemos also opposes Catalan separatism, but it supports the right of the Catalans to vote on the issue.

 

Rajoy may construct a government, but it will be one that supports the dead-end austerity policies that have encumbered most of the EU’s members with low or flat growth rates, high unemployment and widening economic inequality. Support for the EU is at an all time low, even in the organization’s core members, France and Germany.

 

The crisis generated by the free market model is hardly restricted to Europe. Much of Donald Trump’s support comes from the same disaffected cohort that drove the Brexit, and, while “The Donald” is down in the polls, so were the Brexit and the Spanish Popular Party.

 

The next few years will be filled with opportunity, as well as danger. Anti-austerity forces in Spain, Italy, Greece, Portugal and Ireland are organizing and beginning to coordinate resistance to the “troika”. But so, too, are parties on the right: France’s National Front, Hungary’s Jobbik, Greece’s Golden Dawn, Britain’s United Kingdom Independence Party, Austria’s Freedom Party, Denmark’s People’s Party and Sweden’s Democratic Party.

 

Instead of reconsidering the policies that have spread so much misery through the continent, European elites were quick to blame “stupid” and “racist” voters for the Brexit. “We are witnessing the implosion of the postwar cultural and economic order that has dominated the Euro-American zone for more than six decades,” writes Andrew O’Helir of Salon. “Closing our eyes and hoping that it will go away is not likely to be successful.”

 

A majority of Britain said “enough,” and while the Spanish right scared voters into backing away from a major course change, those voters will soon discover that what is in store for them is yet more austerity.

 

“We need to end austerity to end this disaffection and this existential crisis of the European project,” said a UP statement following the election. “We need to democratize decision making, guarantee social rights and respect human rights.”

 

The European Union is now officially a house divided. It is not clear how long it can endure.”

 

—30

 

 

 

 

 

 

 

 

 

The Brexit: A Very British Affair

Brexit Vote: A Very British Affair

Dispatches From The edge

June 24, 2016

 

In the end, the Brexit—the vote on whether the United Kingdom should remain in the European Union (EU) or be the first in the 29-member trade group to bail out—was a close fought matter, but for all the sturm und drang about a pivotal moment for the EU, the June 23 referendum that saw the Brexit pass was a very British affair.

 

While the European Union is clearly in a crisis—countries weighed down with unpayable debt, economies virtually dead in the water, double digit unemployment, and a rising chorus of opposition to the austerity policies of the EU authorities in Brussels—those were not the issues that brought the British people to the polls.

 

Indeed, the whole affair started as an entirely homegrown matter, an internal split in the ruling Conservative Party. Back in 2013, Conservative Prime Minister David Cameron cut a deal with the euro skeptic part of his party that if they would close ranks until after the 2015 general election, he would hold a referendum on the EU.

 

At the time, Cameron was also looking over his shoulder at the rise of the extreme right wing, racist United Kingdom Independence Party (UKIP), which had begun using anti-immigrant issues to poach Conservatives. It is likely that Cameron never really intended to follow through on the 2013 pledge, but once he let slip the dogs of war he had little control over the havoc that followed.

 

When the Conservatives defeated the Labour Party last year, the “out” faction demanded their due, and what emerged was a deeply disturbing campaign that focused on race, religion and “sovereignty,” the latter a code-word for a particularly nasty brand of nationalism that is on the rise all over Europe.

 

Brexiters conjured up hordes of Turks pouring into Britain, even though Turkey is not a EU member—or likely to become one. In any case, the UK is not part of the Schengen countries, those members of the EU that allow visa less travel.

 

“Vote Leave” ran posters depicting crowds of Syrians and endless ads on Turkish birthrates. “None of this needs decoding,” wrote Philip Stephens of the Financial Times, “The dog whistle has made way for the Klaxon. EU membership talks with Turkey, we are to understand, will soon see Britain overrun by millions of (Muslim) Turks—most of them thugs or welfare scroungers.”

 

Last year Britain did process some 330,000 immigrants, but the overwhelming majority of them hailed from Spain, Poland, the Baltic countries, and Greece. The UK has accepted very few Syrian refugees and Turks, certainly not enough to “overrun” the place.

 

The openly racist and xenophobic character of the “Leave” campaign put the UK left in a difficult spot. While the left, including the Labour Party, has profound differences with current policies and structures of the EU, these are not over immigration and religion. How to express those critiques without bedding down with the likes of UKIP or the euro skeptic Conservatives was a tricky business.

 

Labour Party head Jeremy Corbyn chose to endorse the “remain” campaign, but also to point out that the EU is an undemocratic organization whose financial policies have spread poverty and unemployment throughout the continent. However, because the trade groups have a progressive stance on climate change, equal pay, work hours, vacations, and maternity leave, Corbyn argued—if somewhat tepidly—that all in all, it was best to stay in and try to reform the organization.

 

Part of the “leave” vote sprang from one of Britain’s most pernicious ideologies—nostalgia. Run through a few verses of “Rule Britannia” and a considerable portion of older Britains go misty eyed with the mythology of Trafalgar, Waterloo, and Omdurman. Polls indicate that support for the EU among people over 60 was just 33 percent. It was only 10 percent more among Conservative Party members of all ages.

 

In contrast, young Britains, Labour Party members, the Scots and Northern Irish supported remaining, though in the end they were not enough. The fallout? There will almost certainly be another referendum for Scottish independence. Will Northern Ireland do the same?

 

Is this the beginning of end for the EU? It is hard to imagine how the organization can continue as it is since the second largest economy in the trade group has debarked. But the European Union’s troubles have only just begun, and a far more important measure of the future of the organization will come when Spanish voters go to the polls June 26.

 

In that election the austerity policies of the “troika”—the European Central Bank, the International Monetary Fund, and the European Commission—will be directly confronted by a spanking new left formation, Unidos Podemos (United We Can). UP comes out of an alliance of Izquierda Unida (United Left) and Podemos. It is currently running number #2 in the polls and nipping at the heels of the ruling rightwing Popular Party.

 

The UP calls for rolling back the austerity policies of the troika, a public works program to create 300,000 jobs, and economic stimulation to tackle Spain’s horrendous unemployment problem. Joblessness is over 22 percent nationwide and 48.5 percent among young Spaniards.

 

A recent manifesto by more than 200 leading Spanish economists charges that the austerity policies of the EU have created an “economic crisis” that “has had devastating consequences for our country, as well as the euro zone as a whole” and “unnecessarily prolonged the recession across the continent and generated deep social fractures by increasing economic and social inequalities.”

 

The euro zone is the 19 members of the EU that use the common currency, the euro.

 

UP plans to link up with similar minded forces in Greece, Portugal, Italy and Ireland to demand that Brussels adopt fiscal stimulation as a strategy against the economic malaise plaguing most of the EU.

 

United Left leader and Communist Alberto Garzon, probably the most popular politician in the country, says “Brussels has to understand that if they continue to apply austerity politics in Spain our social emergency will get worse, which only helps the rise of fascism—as we have already seen in Austria and other EU countries.”

 

The Brexit vote was a British affair (and promises to be a messy one). The Spanish election is a continental affair that will have reverberations worldwide.

 

—30—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Spanish Elections: EU Watershed?

The Spanish Challenge

Dispatches From The Edge

June 8, 2016

 

For the past quarter of a century there have been few watershed moments in Spanish political history. Like a well-choreographed pas de deux, the center-left Socialist Workers Party (PSOE) and right-wing Popular Party (PP) have taken turns governing the country.

 

But the 2015 election changed all that. Upstart parties on the right and left crashed the ball, punished the two major parties, and forced another round of voting on June 26 that could be a turning point in a growing campaign to roll back austerity policies that have spread poverty and unemployment throughout the continent.

 

Last December’s vote saw the ruling PP drop 63 seats and lose its majority. But voters chastised the Socialists as well, with the party losing 20 seats. Many of the seats that formerly went to the two major parties shifted to the left-wing Podemos Party and, to a lesser degree, the rightist Ciudadanos Party. In the current parliament, the PP controls 123 seats, the Socialists 90, Podemos 69, and Ciudadanos 40. Regional parties of Basques, Catalans and Canary Island independents hold 28 seats. The parliament has 350 seats and a ruling majority is 176.

 

The new election was forced when none of the parties could form a working majority. The PP and Ciudadanos are on the same page politically, but together fall short of a majority. The Socialists, Podemos and the regional parties—most of which are leftist to one extent or another—could have formed a government, but the Socialist Party refuses to have anything to do with Catalan separatists.

 

While polls indicate that Spaniards are likely to vote pretty much the same way they did in December, a new kid on the block has altered the electoral terrain and raised the pressure on the center-left Socialists to make a choice: follow the lead of Portugal, where the Socialist Party formed a united front with the Left Bloc and the Communist/Green alliance, or imitate the Social Democrats in Germany and join a “grand coalition” and make common cause with the right?

 

The “new kid” is “Unidos Podemos” (“United We Can”), a coalition of Podemos and the United Left (UL). No one expects the new alliance to win a majority, but most analysts predict, that under Spain’s quirky election system the coalition could increase its representation by 25 percent, or somewhere between 15 to 20 seats. That would vault the new formation past the PSOE, making United Podemos (UP) the second largest bloc in the parliament. The PP is still number one and on track to slightly increase the 29 percent they received in the last election.

 

Spain’s election geography is heavily weighted toward rural areas, where the PP and Socialist Party are strong. While it takes 128,000 votes to elect someone in Madrid, it only takes 38,000 in some areas of the countryside. The rules also favor regional depth over broad support. In December, the UL won almost a million votes but only got two representatives. Other parties averaged one seat for every 60,000 votes.

 

United Podemos has internal tensions, but both parties have put these aside for the moment. For instance, Podemos supports continued membership in NATO, while United Left opposes the military alliance. The UL is also opposed to the current structure of the European Union and calls for a “refounding” of the organization.

 

What both agree on is ending Spain’s punishing austerity regime and confronting the country’s staggering unemployment. The national jobless rate is 21 percent, with a catastrophic 45.5 percent for youth 25 and under. The education system is in a state of collapse, and there is a national housing crisis. In the face of those conditions, the UP has decided to shelve disagreements over NATO and the EU and make common cause.

 

This is almost exactly what the left did in Portugal, where disagreements on NATO and the EU were sidelined in favor of freezing privatizations, rolling back tax increases, increasing the minimum wage and augmenting funding for education and medical care. There is no question that differences will eventually surface, but the Portuguese left has decided that when the house is burning down saving the inhabitants takes precedent. Whether the Spanish Socialist Party will take that step is an open question.

 

In some ways the divisions of the left in Spain are narrower than they are in the Portuguese alliance: part of the UP—specifically Podemos—backs NATO membership and the EU. But the PSOE’s opposition to Catalan independence is a major roadblock to an alliance with the UP. Podemos also believes Catalonia should remain part of Spain, but it supports the right of the Catalans to hold a referendum on the issue.

 

The Socialist Party’s hostility to Catalan independence allies it with the PP and Ciudadanos. The latter was formed to oppose Catalan independence, and the PP has led a mean-spirited campaign against Barcelona. When Catalans banned bull fighting, Madrid made bull fighting a “national cultural heritage” to thwart the ban. When Catalans flew their nationalist “Estelada” flag at the Copa Del Rey soccer match finals in Madrid, the government tried to block it. A court stopped the authorities from banning the flag, and Barcelona defeated Madrid in the match.

 

PP leader and acting Prime Minister, Mariano Rajoy, is pressing the Socialists to join a grand coalition that, so far, the latter has resisted. But the PSOE is deeply split. Some in the Party would rather bed down with the right than break bread with Podemos United. Others are afraid that, if the Socialist Party enters a grand alliance with the Popular Party, the Socialists will end up suffering the consequences. Center-left parties that join with center-right parties tend to do badly come election time.

 

The Greek Socialist Party was decimated by the left-wing Syriza Party after the former went into a grand coalition with the right. The Liberal Party’s alliance with the Conservative Party in England turned out to be a disaster. The Liberal Party barely exists today. And the German Social Democrat’s grand coalition with Chancellor Angela Merkel’s Christian Democratic Union has seen the once mighty Socialists slip below 20 percent in the polls. In Spain the mantel of “the left” would clearly shift to the UP alliance, something that many in the Socialist Party deeply fear.

 

There are profound differences among the European left, making unity difficult. The Socialist parties in Portugal and Spain, for instance, support paying off their countries debts to European banks and the International Monetary Fund (IMF). The Portuguese Socialist Party’s alliance partners, as well as the Spanish United Left, think the debt is unpayable and, in any case, unfair because most of the debt is the result of the 2008 economic crisis brought on by the irresponsible speculation of private banks. Speculators may have lost the money, but the taxpayers are picking up the tab.

 

There is a potential path out of the current situation, but it will have to overcome powerful interests and a deeply flawed economic system.

 

Those “interests” are the debt holders, ranging from governments to the European Central bank and the IMF.

 

The flaw is built into the eurozone, which is made up of the 19 countries in the 28-member European Union that use the common currency, the euro. As economist Thomas Piketty puts it, the eurozone has “a single currency with 19 different public debts, 19 interests rates upon which the financial markets are completely free to speculate, 19 corporate tax rates in unbridled competition with one another, without a common social safety net or shared educational standard—this cannot possibly work, and never will.”

 

Piketty argues the eurozone’s rigidity on debt and its strategy for solving it—austerity and yet more austerity—has “throttled” a recovery, particularly in Greece, Spain, Portugal, and Ireland. Even where countries economies are finally growing—Spain and Ireland—their debts are actually higher than when they instituted austerity regimes. And the “growth” is not due to the EU’s economic strategy, but rather to cheap oil and the declining value of the euro.

 

Piketty proposes a conference on debt, similar to the one that saved postwar Germany. Syriza has long called for such a gathering. Such a conference could cut debt burdens, lower interest rates and spread out repayments.

 

However, the eurozone would also have to be democratized. The current European parliament includes non-eurozone members and is largely powerless. Decisions are largely made by the unelected Troika—the IMF, the European Central Bank, and the European Commission. One thing that could be done immediately would be to institute a common corporate tax rate, which could be used to finance infrastructure improvements and education.

 

Germany is unlikely to support such an approach, but Germany only represents 25 percent of the EU’s population and GDP, while France, Italy and Spain combined account for 50 percent. Add in Ireland, Portugal and Greece, and Germany and its allies are a distinct minority.

 

Italy is openly advocating debt reductions and loosening of the eurozone’s rules, and France has already raised the issue of a more democratic and transparent EU political structure along the lines of what Piketty is proposing.

 

Can it be done? It won’t be easy, but Germany is increasingly isolated, and countries in the southern tier of the eurozone are desperate for relief from the endless rounds of austerity. They are also no longer convinced that such a strategy will lower their debt burdens and stimulate their economies. In fact, most the debt is unpayable no matter how much austerity is applied.

 

There are some wild cards in the upcoming election. Both the PP and PSOE have been tarred with the corruption bush, and two former Socialist governors of Andalusia have just been charged with illegal payments to supporters. Turnout will likely be lower than in the December election, but the left’s effective grassroots organizations may offset that.

 

The Spanish elections arrive at a critical time for the European Union, and a Madrid government that resists the increasingly discredited economic strategy of the troika could shift the balance in the direction imagined by Piketty.

 

That, however, will depend on whether the Socialist Party decides to join with the left or go into a grand coalition with the right.

 

A failure by the left to unite will open the door for Europe’s resurgent far right, whose xenophobia and racism have gained ground all over the continent.The only way to effectively counter the far right is to democratize the European Union and pursue economic policies that will provide jobs and raise living standards. Only the left can deliver such a program.

 

—30—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Socialists Rain On Spain

Socialists Rain On Spain

Dispatches From the Edge

March 5, 2016

 

The effort by Pedro Sanchez, leader of the Spanish Socialist Workers Party, to form a government on March 2 brings to mind the story of the hunter who goes into the forest with one bullet in his rifle. Seeing a deer on his right and a boar on his left, he shoots in the middle.

 

Sanchez’s search for a viable coalition partner began when the ruling right-wing Popular Party (PP) took a pounding in Spain’s Dec. 20 election, dropping 63 seats and losing its majority. Voters, angered by years of savage austerity that drove poverty and unemployment rates to among the highest in Europe, voted PP Prime Minster Mariano Rajoy out and anti-austerity parties in, although leaving the PP as the largest single party in the parliament.

 

The only real winner in election was the left-wing Podemos Party, which took 20.6 percent of the vote. The Socialist Party actually lost 20 seats, its worst showing ever, and at 22 percent, barely edged out Podemos. And if the Spanish political system were not rigged to give rural voters more power than urban ones, Podemos would have done much better. The Socialists and the PP are particularly strong in rural areas, while Podemos is strong in the cities.

 

While a candidate in Madrid needs 128,000 votes to be elected, in rural areas as few as 38,000 votes will get you into the parliament. Podemos and the Socialists both won over five million votes, with the difference only 341,000. But the Socialists took 89 seats to Podemos’s 65.

 

Spaniards voted for change, but the Socialists, who ran an anti-austerity campaign, chose to form an alliance with the conservative Ciudadanos or Citizens Party, which refuses to have anything to do with Podemos—and the feeling is mutual. Ciudadanos also underperformed at the polls. Ciudadanos was predicted to get as much as 25 percent of the vote and surpass Podemos, but instead came in under 14 percent with only 40 seats.

 

On the surface the only thing the Socialists and Ciudadanos have in common is their adamant opposition to Catalonia’s push for a referendum on independence. Podemos is also opposed to a Catalan breakaway, but supports the right of the region to vote on the matter.

 

Catalonia’s drive for independence is certainly controversial and would have a major impact on Spain’s economy, but exactly how the Spanish government thinks it can block a referendum is not clear. And if Catalans did vote for independence, how would Madrid stop it? One doubts that the government would send in the army or that such an intervention would be successful.

 

Indeed, the fierceness with which the PP, Socialist Party and Ciudadanos oppose the right of Catalans to vote is more likely to drive the province toward independence, rather than discourage it. At this point Catalonia’s voters are split slightly in favor of remaining in Spain, although young voters favor independence, a demographic factor that will loom larger in the future. In provincial elections last September, candidates who supported independence took 47.7 percent of the vote.

 

The Socialists had a path to form a government, but one that would have required the party to modify its position on a Catalan referendum. If it had done so, it could have formed a government using Podemos, the Republican Left of Catalonia (ERC), the Basque Nationalist Party, (EJA-PNV), Canary Islanders, and a mix of independents. Had the Socialists compromised on Catalonia, they might even have picked up the votes from the center-right Democracy and Freedom Party (DIL).

Left parties in the Parliament can put together 162 votes on their own, which is short of the 176 needed to form a government. But it would not have been impossible to pick up 13 more votes from the mix of 14 independents and eight seats controlled by the Catalan DIL.

 

Choosing Ciudadanos as a partner makes little sense. Podemos immediately dropped cooperation talks with the Socialists and sharply criticized Sanchez for not building a genuine left government. Ciudadanos’ economic policies are not much different than the PP’s, plus it opposes abortion, and is hawkish on immigration. In any case the party did poorly in the national elections. The merger “prevents the possibility of forming a pluralistic government of change,” according to the parliamentary deputy and Podemos spokesperson, Inigo Errejon.

 

“Negotiate with us,” Podemos leader Pablo Iglesias told Sanchez, “stop obeying the oligarchs.” The Socialist Party leader pleaded with Podemos to vote for him so that the Socialist-Ciudadanos alliance could pass “progressive” legislation like raising the minimum wage and addressing the gender wage gap. The Socialists also presented a plan to tax the wealthy, improve health care, and try to stop the growth of “temporary” worker contracts that have reduced benefits and job security.

 

But those issues do not really address the underlying humanitarian crisis most Spaniards are experiencing, like poverty and growing homelessness, and the damage austerity has inflicted on education and social services. And Ciudadanos’ views on abortion, immigration and privatizing public services are repugnant to Podemos.

 

Spain’s unemployment rate is still over 20 percent—far more among the youth in the country’s south—and many of the jobless will soon run out of government aid. While the economy grew 3.1 percent in 2015 and is projected to grow 2.7 percent in 2016, it is not nearly where it was before the great 2008 financial crisis and the implosion of Spain’s enormous real estate bubble. On top of which, that growth rate had nothing to do with the austerity policies, but instead was the result declining value of the euro, low interest rates, and cheap oil.

 

If the Socialists have no success in forming a government, there will be new elections, probably in late June. Polls show the outcome of such a vote would be similar to the last election, but Spanish polls are notoriously inaccurate. In the last election they predicted Ciudadanos would eclipse Podemos. The opposite was the case.

 

The right-wing Popular Party is likely to do worse, because it is mired in a series of corruption scandals over bid-rigging and illegal commissions. In Valencia, nine out of the 10 PP councilors are considered formal suspects in the case. Indeed, the Party’s reputation for corruption makes it difficult for any other grouping in the parliament to make common cause with it. And even if Ciudadanos dumped its anti-corruption plank and broke its promise never to cooperate with the PP, such a government would still fall short of the 176 votes needed. The PP controls 119 seats.

 

In part, the Socialists are frightened by the growth of Podemos and the fact that it might replace them as the number two party in the parliament. In part, the Socialists also tend to run from the left and govern from the center, even the center-right. That is a formula that will simply not work anymore in Spain. The domination of the Spanish government by the two major parties since 1977 is a thing of the past, having been replaced by regional and anti-austerity parties like Podemos.

 

Before the recent election, the two major parties controlled between 75 percent and 85 percent of the voters. In the December election, they fell to just over 50 percent.

 

A more successful model is being built next door in Portugal, where the Socialists united with two left-wing parties to form a government. All the parties involved had to compromise to make it work, and the alliance might come apart in the long run. But for now it is working, and the government is dismantling the more egregious austerity measures and has put a halt to the privatization of public services like transportation.

 

Spain’s Socialist Party is riven with factions, some more conservative than others. Sanchez—whose nickname is “ El Guapo” (handsome)—has so far out-maneuvered his party opponents, but this latest debacle will do him little good. He did receive support from the party’s rank and file for the Ciudadanos move, but that led nowhere in the end. Sanchez got 130 votes in the first round and only picked up one more vote in the second round.

 

Another election will probably not produce a sea change in terms of party support, but voters may punish the Socialists for their unwillingness to compromise. Those votes are unlikely to go to Ciudadanos, and the PP is so mired in corruption that it will struggle to keep its current status as the largest party in the parliament. A recent poll taken after Prime Minster Rajoy passed on trying to form a government found that 71 percent of the voters felt that the PP did not have the best interests of Spain in mind. That refusal may come to haunt the PP in June.

 

Podemos will undoubtedly pick up some Socialist Party voters, but probably not enough to form a government. That will only happen if Socialists put aside their stubborn opposition to a Catalan referendum and help build what Podemos calls a “genuine” leftist government.

 

—30—

 

Conn Hallinan can be read at dispatchesfromtheedgeblog.wordpress.com and middleempireseries.wordpress.com

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Spain Says “No” to Austerity

Spain Says “No”

Dispatches From The Edge

Dec. 23, 2016

 

For the third time in a year, the tight-fisted, austerity policies of the European Union (EU) took a beating, as Spanish voters crushed their rightwing government and overturned four decades of two-party reign. Following in the footsteps of Greek and Portuguese voters earlier this year, Spaniards soundly rejected the economic formula of the Troika—the European Central Bank, the European Commission and the International Monetary Fund—that has impoverished millions of people and driven the jobless rate to almost a quarter of the country.

 

Greece’s leftist prime minister, Alex Tsipras said “Austerity has been politically defeated in Spain,” and that the election was a sign “that Europe was changing.” Italy’s prime minister, Matteo Renzi said, “As already happened in Greece and Portugal, governments which apply rigid austerity measures…are destined to lose their majorities.”

 

The big loser in the Spanish elections was the rightwing Popular Party (PP) that lost 63 seats and its majority in the 350-member parliament. The PP won more votes than any other single party, but its support fell from 44 percent in the 2011 elections to 28.7 percent. While PP Prime Minister Mariano Rajoy ran on a platform that the Spanish economy had recovered from its disastrous plummet following the 2007-08 worldwide financial crisis, voters were not buying.

 

The economy is indeed growing—3.1 percent this year and projections for 2.7 percent in 2016—but after four years it has yet to reach pre-crisis levels. Unemployment has remained at 21 percent nationwide and more than double that figure among youth and in Spain’s battered south.

 

Besides delivering a decisive “no” to austerity, Spaniards also turned out the two-party system that has dominated Spain since the death of dictator Francisco Franco in 1975. For 40 years the PP and Socialists Workers Party (PSOE) have taken turns running the country, racking up a track record of corruption and malfeasance. The Socialists also took a drubbing, albeit less so than the PP. PSOE lost 20 seats and fell from 28.8 percent support in 2011 to 22 percent in 2015.

 

The winners were two new parties, the left-wing Podemos (“We Can”) and the center-right Ciudadanos (Citizens), although it was former that really won the day.

 

In pre-election polls the Citizens party was projected to become the second largest party, but voters clearly decided that its free market economic strategies and backward positions on abortion and immigration made it look like PP-lite. Ciudadanos was supposed to win upwards of 25 percent. Instead it took less than 14 percent of the vote, although that translates into 40 seats.

 

For months the Spanish and European media have been filled with stories on Podemos’ falling support—one newspaper called it “No Podemos” (“No we can’t”)—and the New York Times essentially anointed Ciudadanos as the new up and comer. Voters had a different idea and gave the left party 20.6 percent of the vote and 69 seats in the parliament.

 

Spain’s political system is heavily weighted toward rural areas, where both the PP and the Socialists are strong. In Madrid, a candidate needs more than 128,000 votes to be elected. In a rural area that figure can be only a little over 38,000. The difference in votes between the Socialists and Podemos—both won more than five million—was only 341,000, but the Socialists have 90 seats and Podemos has 69.

 

Podemos came out of the 2011 plaza demonstrations by “Los Indignados” fighting against home foreclosures, social inequality, evictions, and massive cuts in support for education and health care. Its membership is mainly urban, although it has made gains in rural areas. Its grassroots organizing experience came in handy it when it needed to turn out votes.

 

Cuidadanos started as a regional party opposed to Catalan independence but, taking a page from Podemos’s book, went national last year.

 

Rajoy says he intends to form a government, but how that would work is not clear. Both Podemos and the Socialists—between them they control 159 seats—have made it clear they intend to fight any attempt by the PP to remain in power. Rajoy could try a coalition with the Citizens Party, but that would only amount to 163 seats, and one needs 176 seats to control the parliament. In any case, Citizens’ leader, Albert Rivera, says he won’t go into an alliance with Rajoy because of the PP’s history of corruption.

 

There are other members of the parliament representing the Basque regions and Catalonia, and Podemos emerged as the strongest party in both regions. However, it will not be easy for a Socialist Party/Podemos alliance to patch together a majority, and it will require navigating the tricky politics of Catalonia.

 

Catalonia, Spain’s richest province has 17 seats in the parliament, all of whom support either greater independence or outright secession. Catalonia became part of Spain after it was conquered by a joint French/Spanish army during the War of the Spanish Succession (1701-14). It has its own language and culture, which until recently was suppressed by Madrid. In September, 47.7 percent of Catalans voted for independence-leaning candidates, who now control the regional parliament.

 

The Socialists Party and Podemos are both opposed to Catalonian independence, although Podemos believes the issue should be up to the Catalans and supports a referendum on the issue. Ciudadanos is adamantly opposed to Catalan independence.

 

It might be possible to cobble together a government from the 159 seats that the Socialists and Podemos control with the 28 other seats representing Basques, Catalans, Canary Islanders, plus other leftish groups. While such a government looks fragile, it might be better than trying to forge a three-way alliance of Socialists, Podemos and Ciudadanos.

 

The latter party is opposed to government regulation, supports privatization of publically owned assets and, at its core, is socially conservative. The left, on the other hand, wants a strong role for government and is firmly opposed to privatization. And the election, says Socialist Party leader Pedro Sanchez, shows Spain wants “a move to the left.”

 

On January 13, King Felipe VI will most likely offer Rajoy the first shot at forming a government. If he does, it will be a short-lived minority one. Last month the right-wing Portuguese president appointed a minority rightist government, which only lasted a week. The Portuguese left is currently hammering together a three-way alliance that will run the country.

 

If Rajoy fails, and the Socialists can’t cobble something together, then there will have to be new elections. However, the left has the best chance of pulling a coalition together.

Whatever happens, the old two-party system is broken. Before this election, the two major parties controlled 75 percent to 85 percent of the votes. In this last election that fell to just over 50 percent. And that, as Podemos leader Pablo Iglesias says, means, “Spain is not going to be the same, and we are happy.”

 

The next hurtle is the EU. But while the Troika could beat up on Greece, Spain, with the fifth largest economy in the EU, is altogether another matter. The game is changing, and Spain is a new piece on the board, one that the Troika will not be able to bully quite as easily as Greece and Portugal.

 

—30—

 

 

 

 

 

 

End To Right’s Reign In Spain?

An End To Right’s Reign In Spain?

Dispatches From The Edge

Dec. 12, 2015

 

 

“Volatile” seems to be the adjective of choice for pollsters going into the Dec. 20 Spanish elections, a balloting that will likely not only change the face of politics in the European Union’s (EU) fifth largest economy, but one that will have reverberations throughout the 28-nation organization. Long dominated by two parties—the rightwing People’s Party (PP) and the center-left Socialist Workers Party—the political landscape has atomized over the past two years. “For the first time in general elections in Spain,” says Manuel Mostaza Barros of Sigma Dos poll, “We have four parties polling above 15 percent when it comes to voter intentions.”

 

What levers those voters pull is very much up for grabs. Polls indicate that 41 percent of the electorate has yet to make up their minds. But whatever party ends up on top, it will have to go into a coalition, thus ending the reign of the two-party system that has dominated the country since the death of fascist dictator Francisco Franco in 1975.

 

The latest polls indicate that the rightwing PP will take a beating, dropping from the 44 percent that it won four years ago to around 28 percent, but it will still win the largest number of votes of any one party. Behind the PP are the Socialists, with close to 21 percent, followed by the center-right Ciudadanos Party at 19 percent, and the left-wing Podemos Party at 15.7 percent.

 

However, with a chunk of the voters yet to make up their minds, “These are the most volatile elections of recent years,” says pollster Mostanza. Pablo Iglesias of Podemos says, “We’re expecting a bumpy ride with political turbulence.”

 

Spain is just beginning to emerge from five years of draconian austerity that drove the national jobless rate to 27 percent, and above 50 percent in the country’s south and among its young people. While growth has finally returned, unemployment is still 22 percent, and far higher for those under 35. The gap between rich and poor has sharply widened, and many workers have lost their modest state support, because they have been jobless for more than two years.

 

The PP’s Prime Minister Mariano Rajoy has been campaigning on a program of ‘stay the course because things are improving.’ The Party’s slogan is “Espana, en serio” (“Spain, seriously”). Opponents have added a question mark to the end of that sentence.

 

It is true that Spain’s economy is growing—3.1 percent in 2015, and projections for 2.7 percent in 2016—but the austerity program had little to do with that turnaround. The fall in the euro’s value has lifted Spain’s export industries, and the precipitous drop of world oil prices—from $114 in 2014 to $35 today—are the major reasons Spain has clawed its way out of recession.

 

Spain’s woes began with the American banking crisis of 2007-08, which crashed Spain’s vast real estate bubble and threatened to bring down its financial system. At the time, Spain had a budget surplus and a modest debt, but speculators drove borrowing rates so high that the country found itself on the edge of default.

 

The Socialists were in power at the time and accepted a “bailout” from the “Troika”—the European Central Bank, the European Commission and the International Monetary Fund. The term “bailout” is a misnomer, since most of the money went to the speculators: German, Dutch, French and English banks. And the “price” the Troika demanded in return was a savage austerity regime that threw Spain into a five year recession, impoverishing millions of its citizen, and driving the jobless rate to over a quarter of the country.

 

However, the Spanish did not go quietly into that good night. Starting in 2011, hundreds of thousands of “indignatos” occupied the plazas of Spain’s great cities, a massive outpouring of rage that eventually led to the formation of Podemos—“We can.” The Occupy Wall Street movement in the U.S. was an offshoot of the plaza demonstrations.

 

Podemos shocked the country in 2012 by winning 8 percent of the vote in the European parliamentary elections and eventually polling as high as 24 percent, making it the second largest party in the country. Since then its poll numbers have fallen for a variety of reasons, but it is still likely to win close to 50 seats in the 350-member parliament.

 

There are a number of complicating factors in the upcoming elections, some national, some regional, particularly in the case of Spain’s wealthiest province, Catalonia.

 

The Spanish newspapers and the international media are harping on Podemos’ declining support—some have been hard pressed to dampen their obvious glee—but the 27 percent was always a soft number. Indeed, Podemos activists charge that the figures were deliberately inflated so that when later polls reflected a decline in support, the media could claim that the left party was “out of steam.”

 

The mass media—dominated by Spain’s elites—have been relentless in their attacks, and Podemos, the most resource-poor of the four major parties, has struggled it get its message out. But the party is a grassroots organization, and it knows how to get out the vote. Plus, in last May’s regional elections Podemos-allied candidates were elected mayor in Madrid, Barcelona, Cadiz, Zaragoza and several other cities.

 

Ciudadanos is the wildcard in this election. Originally a Catalan-based party formed to oppose the push for Catalonian independence, it now has a national profile. It is also anti-abortion and anti-immigrant, and its economic policies are closer to the PP than the Socialists, let alone Podemos. It is, however, deeply critical of the PP’s corruption, and generally supports the kind of constitutional changes favored by the more left forces.

 

The Party’s telegenic leader, Albert Rivera, is hard to pin down on anything but Catalonia and taxes: he opposes independence and he wants to cut business taxes. Whether voters will be attracted to the party’s vague centralism remains to be seen.

 

Catalonia is another wildcard. In the Sept. 27 regional election, the pro-independence parties took 47.7 percent of the vote and 72 of the 135 seats in the regional parliament. While pro-independence parties hailed it as a major victory, the PP government in Madrid called it a defeat for the breakaway movement because the independence parties drew less than 50 percent of the voters.

 

Catalonia was conquered by a joint French and Spanish army during the War of the Spanish Succession (1701-14) and has never quite reconciled itself to rule by Madrid.

 

Podemos took some losses in the Sept. 27 vote, largely because they are caught in the middle. The Party does not want Catalonia to breakaway from Spain, but it also supports the right of the Catalans to hold a referendum to decide the matter. Standing on the sidelines is not a successful formula in polarized Catalonia.

 

Just as it did in the Greek and Portuguese elections, the EU has waded into the Spanish elections. Brussels has showered the PP government with praise, and the Troika has eased up on its austerity demands, allowing the PP to put forth modest spending increases for education and social services. The EU has also warned Catalans that if they break free from Spain, they cannot assume they will be able to maintain their membership in the organization. Similar threats were aimed at Scotland when it was considering breaking free from Great Britain.

 

The EU and the PP have also warned Spaniards that if they don’t support the PP’s economic program, they could end up like Greece. That line of argument didn’t work in last month’s elections in Portugal, where a coalition of center-left forces has taken control despite a massive media campaign warning the Portuguese that failure to support the rightwing government’s austerity policies would lead to ruin and damnation. Images of Greek pensioners lined up at banks flooded television ads.

 

 

But Portugal has now become a model for a center-left takeover. Initially the rightwing coalition claimed that, because it received the largest number of votes, it should continue to rule. The rightwing Portuguese president agreed and re-appointed the old government, a maneuver that lasted a little more than a week, when they were voted out of office by the progressive coalition.

 

The PP’s Rajoy supported the position of the rightist Portuguese government even though it had received only 38 percent of the vote. The final outcome in Lisbon may be a re-run of Portugal: Rajoy gets the most votes of any single party, but not enough to rule.

 

The difference in Spain is Ciudadanos. The Spanish party is much more conservative than the center-left Socialist Party in Portugal, and there is a possibility that it could go into coalition with the PP. That would give a center right government a majority in the parliament.

 

Ciudadanos leaders are coy about their intentions and also a little wary of being swallowed up by the more conservative Popular Party. When the English Liberal Party made a decision to join with the Conservatives, voters punished them in the next election go-around. Ciudadanos leaders are concerned that the same thing could happen to them.

 

Whatever the outcome, nothing is going to be quite the same in Spain after Dec. 20. The rightwing will almost certainly lose its majority, and that, in turn, will crimp Rajoy’s efforts to intimidate the media and criminalize mass demonstrations through the Citizens Security Law that the PP rammed through Parliament. It will also mean a setback for the policies of the Troika. And one hopes, an antidote to the growing strength of racist and xenophobic forces in Europe.

 

—30—

 

 

 

 

 

Portugal: The Left Takes Charge

Portugal: The Left Takes Charge

Dispatches From the Edge

Nov. 25, 2015

 

 

After several weeks of political brinkmanship, Portugal’s rightwing president, Anibal Cavaco Silva, finally backed off from his refusal to appoint the leader of a victorious left coalition as prime minister and accept the outcome of the Oct. 4 national elections. Silva’s stand down has ushered in an interesting coalition that may have continent-wide ramifications.

 

Portugal’s elections saw three left parties—the Socialist Party, the Left Bloc, and the Communist/Green Alliance take 62 percent of the vote and end the rightwing Forward Portugal Party’s majority in the 230-seat parliament. Forward Portugal is made up of the Social Democratic Party and the Popular Party.

 

Even though Forward Portugal lost the election—it emerged the largest party, but garnered only 38 percent of the votes—Silva allowed its leader, former Prime Minister Passos Coelho, to form a government. That maneuver lasted just 11 days. When Coelho introduced a budget loaded with austerity measures and privatization schemes, the left alliance voted it down, forcing the government to resign.

 

Rather than giving the left alliance a chance to form a government, however, Silva—a former leader of the Social Democrats—insisted that the alliance pledge in writing that it would maintain the country’s role in NATO and commit itself to euro zone financial rules. Portugal is a member of the 19-country euro zone, those countries in the 28-member European Union that use the euro as a common currency.

 

Silva’s threat was real. While the president’s term only runs until January, the constitution requires a six-month delay between the appointment of a new president and fresh elections. It would have been eight months before the left alliance could take power and roll back some of the more onerous austerity measures that Forward Portugal had installed.

 

In the face of growing outrage and a threatened general strike, however, Silva finally asked Socialist Party leader Antonio Costa to form a government.

 

Portugal is the victim of the great 2008 international banking crisis. At the time, Portugal’s debt was small and its public spending modest, but speculators drove up the price of borrowing beyond what the country’s small economy could manage. Through no fault of its own, Portugal suddenly found itself on the edge of bankruptcy.

 

In 2011, the “Troika”—the European Central Bank, the European Commission, and the International Monetary Fund—lent Portugal $83 billion, but in exchange instituted an austerity regime that raised taxes, slashed education and medical care, cut wages and pensions, and drove 20 percent of the population below the poverty line. The crisis forced almost half a million young people to emigrate, and Portugal ended up with one of the highest income disparities in Europe.

 

The left alliance government is unprecedented in Portugal, where the Communists and the Socialists have locked horns since the 1974 Carnation Revolution overthrew the 48-year old dictatorship. But four years of austerity have apparently convinced everyone on the left that there needs to be some immediate relief.

 

The Communists and the Left Bloc have agreed to temporarily shelve their demands to exit NATO and the euro zone, and the Socialists have agreed to roll back austerity measures, cut taxes, and raise pensions and wages. Privatization will be on hold.

 

There are still major differences within the alliance, however, and not just over dumping the euro and getting out of NATO. The Communists and Left Bloc want debt reduction because much of the country’s encumbrances are the result of private speculators, not profligate public spending. The Socialists did not mention debt reduction during the election and, at least for now, seem committed to repaying all debts.

 

However, the new government is pledged to loosen austerity’s grip and to challenge the Troika’s tight-fisted formula for economic recovery with one based on economic stimulus. If successful, that could model a new strategy for the rest of Europe, where, in spite of years of austerity, economies are still sluggish or in recession.

 

Even in countries that show growth, the rate is relative. Spain, for instance, is growing at a respectable 3 percent, but unemployment is over 20 percent—close to 50 percent for young people—and its gross domestic product has still not reached pre-2008 levels. Wages have declined in nine out of 14 quarters. According to Simon Tilford of the Center for European Reform, Spain’s recovery is not due to austerity, but rather, to low interest rates, the declining value of the euro, and a worldwide fall in oil prices.

 

Certainly the new Portuguese government will not be welcomed by Madrid, where the declining popularity of the rightwing Popular Party’s threatens its control of the Spanish Parliament. It is not unlikely that the Dec. 20 elections in Spain will produce a very similar outcome to Portugal’s: the Popular Party will lose its majority to the center-left Socialist Party and the left Podemos Party. Whether that will result in the kind of coalition that Portugal’s left has stitched together is not clear, in part because the centrist Citizen’s Party is a bit of a wild card and there are complex politics around Catalan independence.

 

However, even if the smaller Spanish parties cannot unite a’ la Portugal, they will put the brakes on the Popular Party’s austerity policies and its push to muzzle the media and curtail mass demonstrations.

 

The Portuguese model may end up having an influence on the rest of the European left, where conversations are going on about how to begin moving the continent away from the policies of the Troika. There are at least two major currents now engaging the left, the so-called “Plan A” and “Plan B.”

 

Plan A—supported by the United European Left/Nordic Green Alliance, the group representing the left parties in the European parliament—calls for democratizing the European Union and the European Central Bank, taxing the rich, raising wages, funding social services, and creating jobs through public investment. Plan A is backed by Spain’s Podemos, Greece’s Syriza, and Germany’s Die Linke (Left Party).

 

Plan B was launched Sept. 11 by five key figures in the European left—Oskar Lafontaine, a former leader of Die Linke, Italian parliamentary deputy Stefano Fassina, Jean-Luc Melenchon of France’s Left Party, and two former Syriza leaders, Zoe Kostntopoulou and Yanis Varoufakis. Plan B is somewhat more nebulous than Plan A, and not everyone who advocates it is on the same page. While it doesn’t contradict Plan A, most of its advocates are not sure the EU is really reformable.

 

According to Liam Flenady of Green Left Weekly, the September call “remains intentionally open to what this Plan B could look like.” For one thing, it comes off sounding a little wonky: “Parallel payment systems, parallel currencies, digitization of euro transactions, community based exchange systems…euro exit and transformation of the euro into a common currency.”

 

Not all of the five left figures are in agreement. Varoufakis, Greece’s former finance minister, is for staying with the euro, while the Italian Fassina is not. No one openly attacks Syriza, but most supported Popular Unity, the anti-euro split from Syriza that failed to win any seats in the last Greek election.

 

A Plan B summit is set for the end of the year.

 

The disagreements between—and within—the plans reflect the enormous complexity of the task facing Europe’s left, including how to present a united front while still searching for solutions that are not obvious. Is trying to democratize the euro zone like teaching a pig to whistle: can’t be done and annoys the pig? Can a country withdraw from a common currency zone without the Troika destroying its economy? Do countries within the euro zone have the right to experiment with different economic strategies?

 

Greece was forced to swallow the Troika’s medicine, in part because Syriza assumed that the Troika was essentially rational and actually interested in resolving the crisis. It was not, because the Troika saw Syriza’s resistance as the precursor to a continent-wide movement against its austerity policies.

 

Portugal is charting a somewhat different path than Syriza. Instead of head-on confrontation, the left is trying to maneuver while strengthening its base by improving people’s lives. Disagreements will eventually surface—hardly an unhealthy thing—but the Portuguese alliance has decided to kick that can down the road.

 

On Nov. 20, the Portuguese united left used its majority to approve a law allowing same sex couples to legally adopt children and permit lesbians to obtain medically assisted fertilization. That little act hardly shakes the foundation of the EU, and one doubts it caused the Troika to tremble. But suddenly Portugal is a little bit kinder place than it was a month ago.

 

Small things can lead to big things.

 

—30—

 

 

 

 

 

 

 

 

 

 

 

Europe’s Elections: A Coming Storm?

Europe’s Elections: A Coming Storm?

Dispatches From The Edge

Aug. 26, 2015

 

 

Between now and next April, four members of the European Union (EU) will hold national elections that will go a long ways toward determining whether the 28-member organization will continue to follow an economic model that has generated vast wealth for a few, widespread misery for many, and growing income inequality. The choice is between an almost religious focus on the “sin” of debt and the “redemption” of austerity, as opposed to a re-calibration toward economic stimulus and social welfare.

 

The backdrop for elections in Greece, Portugal, Spain and Ireland is one of deep economic crisis originally ignited by the American financial collapse of 2007-08. That meltdown burst real estate bubbles all over Europe—particularly in Spain and Ireland—and economies from the Baltic to the Mediterranean went off the rails. Countries like Ireland, Greece, Spain and Portugal saw their GDPs plummet, their banks implode and their unemployment rates reach levels not seen since the Great Depression of the 1930s. Debt levels went through the ceiling.

 

The response of the EU to the crisis was a carbon copy of the so-called “Washington consensus” that the International Monetary Fund (IMF) applied to indebted Latin American countries during the 1990s: massive cutbacks in government spending, widespread layoffs and double digit tax raises on consumers.

 

Instead of lower debt levels and jumpstarting economies, however, the IMF strictures for Latin America did exactly the opposite. Cutbacks, layoffs, and high taxes impoverished the majority, which in turn tanked economies and raised debt levels. The formula was a catastrophe that Latin America is still digging itself out from.

 

But the strategy was very good for a narrow stratum, led by banks, speculators, and multinational corporations. U.S, British, German, Dutch and French banks helped inflate real estate bubbles by pouring low interest money into building binges. The banks certainly knew they were feeding a bubble—land prices in Spain and Ireland jumped 500 percent.

 

However, as economist Joseph Stiglitz points out, the banks had a trick: their private debts would be paid for by the public. Taxpayers did pick up the tab, but only by borrowing money from the Troika—the IMF, the European Central Bank, and the European Commission—and accepting the same conditions that tanked Latin American in the 1990s. Needless to say, history was replicated on another continent.

 

The upcoming elections will pit the policies of the Troika against anti-austerity movements in Portugal, Greece, Spain and Ireland. If these movements are to succeed, they will first have to confront the mythology that the current economic crisis springs from avaricious pensioners, entitled trade unionists, and free spending bureaucracies, rather than irresponsible speculation by banks and financiers. And they will have to do so in a political arena in which their opponents control virtually all of the mass media.

 

Never have so few controlled so much that informs so many.

 

The election terrain is enormously complex, and, while resistance to austerity gives these movements a common goal, the political geography is different in each country. Plus the Left essentially has to fight on two fronts: one, against the policies of the Troika, and two, against a rising tide of racist, xenophobic and increasingly violent right-wing movements that have opportunistically adopted anti-austerity rhetoric. The openly Nazi Golden Dawn in Greece and the fascist National Front in France may attack the policies of the EU, but their programs have nothing in common with organizations like Greece’s Syriza, Ireland’s Sinn Fein, Spain’s Podemos, or Portugal’s Left Bloc.

 

Size counts in this coming battle. Because Greece makes up only 1.3 percent of the EU’s GDP, the Troika could force Greece to make a choice between, in the words of former Syriza economic minister Yanis Varoufakis, “suicide or execution”—suicide if Syriza accepted another round of austerity, execution of the country’s banks and financial structure if it did not. Because it is small, Greece’s death would scarcely cause a ripple in the EU. A similar situation exists for Ireland and Portugal.

 

But not for Spain. Spain is the 14^th largest economy in the world and the fifth largest economy in the EU. Bankrupting it or driving it out of the Eurozone—the 19 countries that use the euro instead of a national currency—would cause more than a ripple, it could sink the entire enterprise. That is why the austerity measures the Troika impressed on Spain were severe, but not as onerous as those inflicted on Ireland, Portugal and Greece.

 

Besides trying to ameliorate the worst aspects of the Troika program, the anti-austerity Left faces an existential question: should their indebted countries remain in the Eurozone, or should they call for withdrawal and a return to national currencies?

 

The Eurozone has been a disaster for most its members, except Germany, and, to a certain extent, Austria and the Netherlands. While the currency is common, there is no shared responsibility for the results of economic unevenness. In the U.S., big economies like California help pay the way for Mississippi, under the assumption that a common interstate market is a good thing and why shouldn’t the wealthier states help the less fortunate? In the Eurozone, it is every man for himself, and if you’re in trouble, talk to the Troika loan sharks.

 

Since the euro is controlled by the European Central Bank—read Germany—countries can’t manipulate their currencies to help get themselves out of trouble the way the U.S., China, Russia, India, Brazil, Great Britain, and others do. A currency union doesn’t work without a political union, and such a union is a bad idea when it puts countries like Germany and Greece on the same playing field. In the end, the big dogs dominate.

 

While the issues throughout the Eurozone may be similar, each country is different. A short scorecard:

 

Greece-Sept. 20

 

Syriza, the leftwing party that won the last election, has split with 25 former Syriza deputies who formed the Popular Union Party and called for full resistance to the Troika’s demands. Despite retreating from his previous opposition to any new austerity, polls show Syriza’s former prime minister, Alexis Tsipras, is popular. The parties that formerly dominated Greece—the right-wing New Democracy and center-left PSAOK—have been badly discredited, and the centrist Potami Party doesn’t have a clear program, except none of the above. The Left should do well, but it will be divided. Division in the face of the Troika is perilous, but this battle is a long way from over, and there are creative ways to resist the Troika without taking it head on. A civil war within the Left, however, could be disastrous.

 

Portugal-Oct. 4

 

The country is currently dominated by the conservative Popular Party/Social Democratic Party coalition that holds 132 seats in the 230-seat assembly. But polls show the opposition is running neck and neck with the Socialists (74 seats), The Socialists put in the austerity program, but have since turned against it. The leftwing United Democratic Coalition (16 seats), an alliance of the Communist Party and the Greens, and the Left Bloc (8 seats), looks like they will pick up deputies. There is a strong possibility that the conservatives will fall, and that the center-left and left opposition will form a coalition government. The Left already controls 98 seats. It will need 116 to form a government.

 

Spain, December, 2015

 

The political situation in Spain is fluid. The rightwing ruling Popular Party is in trouble because of several major corruption scandals and its enthusiastic support for austerity. The Socialist Party has recently increased its popularity but it was the Socialists that instituted the austerity policies. Support for the leftwing anti-austerity Podemos Party appears to have stalled, but it has elected, or helped to elect, the mayors of Madrid, Barcelona, Cadiz and Zaragoza. Unlike Syriza, which is a coalition of left parties, Podemos is a grassroots organization that knows how to get the voters out.

 

There is also the center-right Ciudadanos Party that did well in spring elections, but is anti-immigrant and anti-abortion, and whose economic program is at best opaque.   Those things are not likely to translate into major electoral gains. Whatever happens, Spain is no longer a two party country, and the Left will play a key role in any coalition building to form a government.

 

There is a wildcard in this election: the newly minted Citizens Security Law, which the Popular Party rammed through Parliament and is aimed at suppressing demonstrations, criticism of the government, and free speech. It is clearly aimed at shutting down Podemos.

 

 

Ireland, April 2016

 

“Volatile” is the only way one can describe the Irish Republic, where the polls shift from month to month. The economy is growing, but the Troika’s austerity regime is still raw. Over 100,000 mortgages are under water and since 2008, some 400,00—mostly young professionals—have fled to Britain, Canada, Australia, New Zealand and the U.S., inflicting a crippling brain drain on the island.

 

The centrist coalition of Fine Gael and Labor currently rules, but that is likely to change after the election. Polls show Fine Gael at 28 percent, and Labor at 7 percent. At 21 percent, the leftwing, anti-austerity Sinn Fein Party is in the number two post, although its support has fallen off slightly since last year. However, the popularity of its leader, Gerry Adams, has been climbing. Lastly, there is a mix of independent parties, ranging from Greens to socialists, supported by 24 percent of the voters. Most are anti-austerity and potential coalition partners if the ruling parties fall. The conservative Fianna Fail Party is polling about 20 percent.

 

In these upcoming elections, the Left will have to confront the enormous power of the Troika on the one hand, and on the other, deliver services and jobs. It will also have to clearly differentiate itself from the racism of the right on the immigration crisis and challenge the unwillingness of their own governments to find a humane solution to the problem. Since of the bulk of the refugees are generated by the irresponsible policies of countries like France, Britain, Italy and Germany in Afghanistan, Libya, and Syria, the Left must clearly link the foreign adventurism of their elites to the flood of people now seeking safety from the storms those elites help generate.

 

None of this will be easy and disunity will make it harder. The Left elsewhere in the world cannot expect small countries like Greece, Portugal and Ireland to take on the power of international capital by themselves. Not since the rise of Nazism has there been such a pressing need for international solidarity. In a very real way, we are all Greeks, Spanish, Portuguese and Irish. These elections are as much about the U.S. as they are about the parties and movements that have decided to resist a species of capitalism that is particularly red of tooth and claw.

 

—30—