WORLD -- November 18, 2011 at 5:07 PM ET
Spain Holds Elections in the Midst of European Debt Crisis
Leader of the Popular party Mariano Rajoy at a campaign rally in Sevilla, Spain, on Thursday. Photo by Jorge Guerrero/AFP/Getty Images.
The financial storm sweeping across Europe is about to claim another victim -- the Socialist government of Spain.
On Sunday, according to every poll and political analyst in the country, Spanish voters are expected to give the opposition conservative Popular party an overwhelming victory margin in the Cortes (parliament). If those predictions come true, Spain would follow the path of Ireland, Italy and Greece in pushing incumbents out of office this year.
Spain's economic boom of the 1990s, mainly propelled by easy financing for construction and real estate, came apart amidst the 2008 global financial crisis. Banks stopped lending, government construction projects, from airports to theme parks, were stopped in their tracks. Empty housing developments, in residential and tourist areas, litter the landscape. Europe's fifth largest economy, which once pulled in foreign workers, has gone through a wrenching turnabout that has produced an unemployment rate of nearly 21 percent, some 5 million out of work in a country of 46 million.
"This is a bad time for politics, a bad time for democracy," said Lorenzo Mila, correspondent for the Spanish network TVE.
Or as one of the country's leading newspaper El Pais said in its pre-election headline, "The campaign ends in the worst moment of crisis."
For the winners, and the presumed incoming Prime Minister Mariano Rajoy, who will officially take office in December, there will be no grace period or political honeymoon. The balloting begins as interest rates reached record highs for Spanish government bonds. Unlike its fellow Mediterranean euro members Greece and Italy, Spain's government finances are in good order. But as in those countries, the pressure is on for cuts in spending, and tens of thousands have been in the streets in protest.
"Most people in Spain realize that many things are out of their reach," Mila said. "The big decisions are not being made far away from Madrid or Barcelona but in Berlin and Brussels. We don't expect miracles from the new government."
The election will be the fourth peaceful transfer of power between democratic political parties since the death of dictator Francisco Franco in 1975. But according to Mila, many Spaniards wonder who is really in charge -- their elected leaders or the bond markets.
"Many of us in Europe are dreaming ... of saying to the rating agencies markets: 'we are going to stop here.'" But he acknowledged he had no idea how that might happen.
Mila and other political analysts said the economic issue has overwhelmed the divisions that used to roil Spanish politics. The conservatives have muted their once vociferous criticism of the social legislation enacted by Prime Minister Jose Luis Zapatero on abortion and gay marriage. And the constant tension for more regional autonomy in Catalonia (Barcelona) and the Basque country has dimmed with the likelihood that the Popular party may win enough seats in parliament to govern without the regional parties.
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