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12 November 2015

Heading for Spanish general election

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Rajoy unveiled the seven pillars of his electoral programme as the latest polls show the PP would achieve a narrow victory on 20th December; still he would probably need C’s to pass legislation. But Catalan secession challenge and downgraded economic forecasts loom large in the electoral campaign.

By Paula Martín Camargo, Editor

Latest polls

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Source: and CIS

The latest voter intention polls show a high volatility and nearly 32% of undecided voters, according to the biggest CIS state poll.  There would be four main players led by the PP, which would obtain a narrow victory if the election was held today (around 29% of the votes). Overall, the PSOE (25%) and C’s (15%) would compete for the second and third position – the PSOE would be second, while Podemos would fall to fourth (10%). Emerging party C’s confirms itself as the most likely kingmaker, according to Metroscopia Statistics Institute. The PP would need C’s votes to pass legislation in the next term.

The Catalan ‘secessionist challenge’

The Catalan separatists are mounting their challenge to Spanish laws and used their majority in the Catalan autonomous parliament earlier this week to pass a motion for the effective secession from Spain. Tensions over the ‘Catalan issue’ have jeopardised the PP’s policy in Home Affairs as well as they have given Rajoy an opportunity to appear as the dedicated ‘crusader’ for the unity of the country – “there will be no ruptures or drama here while I’m still president”. However, Rajoy has shifted from categorical refusal of constitutional reform to accepting discussing a revision of the 1978 Constitution. This change of attitude might be due to the results of the most recent surveys, which suggest that Rajoy would probably need the support of a second party to pass legislation during the next term.

Party programmes so far

Prime Minister Rajoy has invited the Spanish people “to design a new productive system” for the country’s economy, to keep growing, boost jobs and maintain the public sector. This will be the core of the PP’s electoral programme, built on seven central concepts:

1.           Improve employment

2.           Growth based on efficiency and competitiveness

3.           Strengthening the State of the Autonomous Communities Autonomies

4.           Reinforce welfare system

5.           Finalising the reform of education

6.           Modernise the public administration

7.           Keeping a continuing compromise of regeneration of political sphere.

C’s leader Albert Rivera proposed three key areas to ‘clean Spain’s act quickly’: eradication of corruption and cronyism from institutions, new labour market regulation to boost job creation and reduce job insecurity, and an overhaul of the education system.

Podemos hasn’t presented its political programme yet, but this week made a bold move against low taxes for big companies as a first test of its proposals for the next term. The leftist party, which governs in coalition in the Navarre autonomous community, has increased taxes on the biggest companies as well as for the SICAV – cooperative societies with lower taxation - and intends to raise the bar of the IRPF (the income tax) for the biggest fortunes in case it wins the election.

Podemos’ leader Pablo Iglesias recently gave up his seat in the European Parliament to focus on the Spanish general election campaign: Iglesias made a harsh attack against socialist and conservative MEPs during his farewell speech, accusing them of mishandling the refugee crisis and saying that he was “returning to my country so in Spain there will no longer be people like you in government.”

Spanish economic outlook

Rajoy’s chief economic adviser said that Spain is doing better than Germany when it comes to boosting exports within the strictures of the euro. Inflation in Spain has been lower than Germany's for two years, which has led to an improvement in competitiveness. Although the Spanish economy “is on track to post a current account surplus for a third year in a row, a sign that the economic growth is sustainable,” the Spanish 2016 budget may be based on too optimistic deficit projections, according to the Commission's macroeconomic forecast presented on 5th November. This new ‘rebuke’ from Commissioner Moscovici is fuelling tensions ahead of the General Election, given that the budget for next year should include further cuts and thus reduce the room for manoeuvre for new measures that could attract voters on 20th December election.

The increased deficit estimate for the next year is directly connected to the latest economic outlook from the Spanish National Statistics Office. Data showed that the country’s economic growth slowed in the third quarter, which indicated that the recovery may have peaked after the fastest expansion in eight years, according to Bloomberg.

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