The April general election in Spain was certainly a step forward for the Socialist Party. But that was only a recovery from its ‘third way’ step back.

In the elections to the Spanish Parliament on April 28th, the Socialist Party (PSOE) obtained the largest number of votes. This was interpreted by most of the European media as a ‘revival’ of the social-democratic tradition in Spain (as part of a broader revival of social democracy in Europe). But this vein of reporting was misleading.

Actually, the PSOE obtained practically the same number of votes—nearly seven and a half million—as in the general election of 2011, when it was considered to have suffered a big defeat. Indeed, that was the lowest number of votes obtained by the party since 1979. Why, then, the good news this time?

Major force

The PSOE had been the major party within the left in Spain and had governed the country for the majority of the democratic period, beginning in 1978. It had been the major force behind the establishment of the welfare state, with the jewel in the crown the establishment of the Spanish National Health Service. Social expenditures expanded quite considerably under the party’s governance between 1982 and 1996, as did the percentage of national income derived from labour rather than ownership of capital.

Progress however slowed towards the end of this golden era of social democracy, due to the application of policies—encouraged by the establishment of the European Union—which affected the quality and stability of the labour market. These precipitated two general strikes in the country, something unprecedented in the history of European social democracy.

This decline in the party’s support from the labour force manifested itself in an increase in working-class abstention in the elections of 1993, losing the PSOE its parliamentary majority for the first time. To continue governing, the party formed an alliance with right-wing Catalan nationalism (today a pro-independence party), rather than a coalition of left-wing parties (Izquierda Unida).

This meant a strengthening of those policies which the government considered necessary to meet the Maastricht criteria of reducing the public deficit and so accede to the euro. The continuation of these austerity measures caused the Socialists’ defeat in 1996 along with the victory of the conservative Popular Party (PP), which had been founded by ministers in the Franco dictatorship.

‘Third way’

This initiated a period of sustained growth (1996-2004), based on cheap labour and limited social protection, which ended with the victory of José Luis Zapatero of the PSOE in 2004. Zapatero embodied the Spanish version of the ‘third way’. A major promise of his electoral campaign had been a cut in taxes, which was responsible for 72 per cent of the €27,223 million (equivalent to €27.2 billion in England and the US) reduction in public revenues between 2007 and 2008, according to official figures. The other 28 per cent was a result of the decline in growth with the beginning of the Great Recession.

The budget deficit created by these shortfalls forced major cuts in public expenditure. Also Zapatero introduced labour-market ‘reforms’ which further weakened labour and strengthened employers. And the Spanish constitution was changed, following an agreement between the PSOE and the PP, to prioritise repayment of the public debt over any other expenditure (clause 135).

These interventions became very unpopular, causing the emergence of the indignados movement, or 15M.This protested against the application of neoliberal policies and denounced the ‘political class’ for not representing the people’s interests, but rather those of the financial and economic forces considered to have excessive influence over the ‘representative democratic institutions’—including the leadership and apparatus of the PSOE.

The indignados rebellion was a call for democracy: its slogan, ‘They—the political class—do not represent us, the people’, rapidly spread across the territory.

Podemos

The protests caused the PSOE to lose the elections in 2011, with a further increase in abstention among its base. The PP won again, imposing another labour-market ‘reform’, which weakened labour even more, and more cuts in social expenditures. These interventions caused an explosion of an anti-establishment mood, which led to the creation of a new left-wing party, Podemos (‘we can’). In under three years it became the third largest in the country, at one point almost surpassing the PSOE.

Podemos had enormous influence and significant consequences—from the resignation of King Juan Carlos I (appointed by Franco as his successor as head of state) to the change in the leadership of the PSOE. The party grassroots of the PSOE forced out the old leadership and elected Pedro Sanchez, who had run against the apparatus in the primaries with a programme to the left, inspired in many parts by Podemos.

Sanchez spoke then of the excessive power of economic and financial lobbies in the PSOE itself. Due to pressure from the party rank-and-file, he even made a pact with Podemos (which had established an alliance with Izquierda Unida).

Through this the PSOE approved an economic and social programme which included a 20 per cent rise in the minimum wage, an increase in pensions to reflect inflation, regulation of the price of rented housing and other popular measures, many borrowed from Podemos. These were the major cause of the growth in the party’s electoral support from 22 per cent in 2015 to 28.7 per cent in 2019.

This was even more significant in terms of parliamentary seats, due to the bias of the electoral law towards the larger parties. The right-wing vote meanwhile divided—a consequence of the establishment of a new party, Vox. A split from the PP, Vox is the truest Spanish version of the right—ultra-liberal in the extreme.

Coalition choice

The increase in its seats was not however enough to give the PSOE a majority, so it needs to form a coalition to govern. The choice is between Ciudadanos, a major neoliberal party in Spain (the preference of much of the party apparatus and the major banking and business associations) or Unidos Podemos (the preference of the base of the party). We will see who wins in the coming days.

In any event, the lesson for social democracy in Europe is that the adoption of neoliberalism can bring electoral disaster, which can only be reversed by moving to the left. This is what happened in Spain, influenced by Unidas Podemos.​