Following Syriza’s victory in the Greek elections on 25 January, a number of commentators have turned their attention toward Spain, where the left-wing Podemos, which originally emerged from the Indignados protest movement, has been receiving strong polling numbers since the end of 2014. Vicente Navarro writes on the growth of Podemos and his role in shaping the party’s economic programme. He argues that the anti-austerity and pro-democracy narrative put forward by Podemos has deeply resonated with the Spanish electorate, and that the party now poses a major threat to the Spanish political establishment

Navarro, Vicente

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28/01/2015After Syriza’s victory, Podemos now poses a major threat to theSpanish political establishmentblogs.lse.ac.uk/europpblog/2015/01/28/after-syrizas-victory-podemos-now-poses-a-major-threat-to-the-spanish-political-establishment/Following Syriza’s victory in the Greek elections on 25 January, a number of commentators haveturned their attention toward Spain, where the left-wing Podemos, which originally emerged fromthe Indignados protest movement, has been receiving strong polling numbers since the end of2014. Vicente Navarro writes on the growth of Podemos and his role in shaping the party’seconomic programme. He argues that the anti-austerity and pro-democracy narrative put forward byPodemos has deeply resonated with the Spanish electorate, and that the party now poses a majorthreat to the Spanish political establishment.Something is happening in Spain. A party that was only founded a year ago, Podemos, with a clear left-wingprogramme, could well gain a majority in the Spanish Parliament if an election were held today. Following the victoryof Syriza in the Greek elections on 25 January, speculation has been raised as to whether Podemos could achievea similar feat in Spain’s parliamentary elections later this year, but what is driving the party’s success?Support for Podemos is intricately linked to the policies pursued by the conservative People’s Party government, ledby Mariano Rajoy. These policies have included the largest cuts in public social expenditures(dismantling theunderfunded Spanish welfare state) since democracy was established in Spain in 1978, and the toughest labourreforms pursued in the same period, which have substantially deteriorated labour market conditions. Salaries havedeclined by 10 per cent since the Great Recession started in 2007, and unemployment has hit an all-time record of26 per cent (52 per cent among the youth). The percentage of temporary, precarious work has increased, becomingthe majority of new contracts in the labour market (more than 52 per cent of all contracts), and 66 per cent ofunemployed people do not have any form of unemployment insurance or public assistance.These measures have created an enormous problem in terms of a lack of domestic demand, a major cause of thelong-term recession. It has only been recently that very limited growth has appeared, due primarily to the decline inthe price of oil, a devaluation of the euro, and the commitment by the European Central Bank (ECB) to buy publicbonds. The Spanish government did not have anything to do with any of these events, although it claims now thatthe short recovery is a result of its policies.These policies were promoted by the European Union through the European Council, European Commission, andECB, and by the International Monetary Fund. They were carried out in Spain with the support and encouragementof ﬁnancial capital, major business enterprises, and their political instrument, the People’s Party. The Spanish righthas arguably got what it had always wanted: the reduction of salaries and the weakening of social protection with adismantling of the welfare state. These policies are what the participants at the latest G-20 meeting in Australiapresented as a strategy for all countries to follow, championing Spain as a model country.Why have the cuts happened?The reduction of salaries and of the number of people receiving salaries, as well as the reduction of publicexpenditures, has resulted in an enormous decline in domestic demand and, as a result, of economic growth. Thewaning of salaries meant increased indebtedness of families and of small and medium enterprises. Debt increasedenormously. This meant that banking also increased enormously (Spain has one of the largest banking sectors inEurope, proportionally three times as large as in the United States). But the low proﬁtability of the productiveeconomy meant a large increase of banking investments in speculation, causing huge bubbles, the most importantof which was the housing bubble.1/5When the bubble was still occurring, there was a feeling of euphoria among the political establishment. Even thegoverning socialist leader, José Luis R. Zapatero, felt that, in a time of such exuberant growth, taxes should bereduced – his slogan at the time was that ‘reducing taxes should be an objective of the left’. He reduced taxesenormously, primarily on capital and high incomes. He announced his slogan in 2005 and passed the Tax ReformAct including the tax cuts in 2006. And in 2007, when the bubble exploded, a huge hole appeared in state revenues:27 billion euros. According to economists at the statistical oﬃce of the Ministry of Finance, 70 per cent of this holewas due to the tax cuts and only 30 per cent to the decline of economic activity at the beginning of the GreatRecession.This is how the cuts started, under the false argument that the country needed to face austerity measures because itwas spending too much. In reality, when the crisis started, the Spanish state had a surplus. Spain’s publicexpenditure is in fact far too low: much lower than its economic level of development would call for. The cutsdemonstrate the political nature of these interventions.Zapatero froze public pensions to save 1.5 billion euros, when he could have obtained 2.5 billion by recovering theproperty taxes that he had abolished, reversing the lowering of inheritance taxes (2.3 billion), or reversing thereduced taxes of individuals making 120,000 euros a year (2.2 billion). These cuts were expanded later by Rajoy,who cut 6 billion from the National Health Service, stressing, as Zapatero said before, that “there were noalternatives” – the most frequently used sentence in the oﬃcial narrative.There were alternatives, however. He could have reversed the lowering of taxes on capital to large corporations thathe had approved, obtaining 5.5 billion. Indeed, I wrote, along with Juan Torres and Alberto Garzón, a book on thissubject entitled ‘There are Alternatives’ (Hay Alternativas: Propuestas para Crear Empleo y Bienestar Social enEspaña). The book showed, with clear and convincing numbers, that there were in fact other options to the policiespursued. It became a bestseller in Spain and was widely used by the Indignados movement.The Indignados movementThe cuts to public social spending and the three labour market reforms carried out ﬁrst by the socialist (PSOE)government, and later by the conservative (PP) government, angered many citizens, since not one of thesemeasures had a genuine popular mandate. None of those policies had been mentioned in the electoral programmeof the governing parties. In response, the Indignados movement appeared and quickly spread all over the country.Its slogans, such as “They, the political class, do not represent us” became widely popular. Consequently, stateinstitutions started losing legitimacy, while the state responded by trying to repress the movement. That did not stopthe Indignados, however: many of their leaders were young and therefore highly aﬀected by the crisis.The Indignados movement demanded a second transition, calling for an end to the 1978 regime (the political systemestablished in 1978 when the dictatorship ended) and for the establishment of a new democratic order, explainingthe need to substitute existing representative institutions with new ones, complemented by other forms ofdemocratic participation such as referendums and/or popular assemblies. The goal was to establish an authenticdemocratic system with forms of direct citizen participation such as referendums, plus indirect forms of participationsuch as representative democracy, ensuring political parties would be much more democratic than they are today.The movement had an enormous impact, with its starting point being a protest against the slogan “There are noalternatives”. In fact, the leadership of the Indignados showed our book, Hay Alternativas, in front of police who weretrying to control a demonstration. The photograph of thousands of people displaying the book was widely distributedwithin the movement and published in the press. Their major aim was essentially to highlight that there were indeedalternatives, and to question the legitimacy of the state, which was imposing policies that did not have a popularmandate.The new political party: Podemos2/5Pablo Iglesias, Credit: La Veu del País Valencià (CC-BY-SA-3.0)The Indignados became aware that alongside protests they also had to intervene in the political arena, and this isessentially how Podemos began. The leaders of Podemos were drawn from individuals who had played a leadingrole in the movement. Some are junior faculty members in the Department of Political and Social Sciences in thelargest public university in Spain, Complutense. Many have been active in the youth movements of the SpanishCommunist Party.Regardless of where they come from, they all felt thatthe root of the problem was the control of the state bya class of politicians, based primarily in the majorparties – the liberal-conservative party (PP) and thesocialist (PSOE) – who were closely related and tiedto the major ﬁnancial and banking corporations thathave corrupted state institutions. They called for theestablishment of a democratic state and a democraticEurope, “a Europe of the people, not the Europe ofthe bankers”.They stood in the elections to the EuropeanParliament in 2014 and received a much larger votethan they had expected. More importantly, the pollsshowed substantial growth in their support, to thepoint that at the end of 2014 it became clear theymight even be capable of becoming Spain’sgoverning party – a situation they had never thoughtpossible in such a short space of time. The party’smessage, “Vote against the caste: Throw all of them out,” has deeply resonated with the electorate. It is clear thatthe majority of people are fed up with the political and media establishments and have turned to Podemos for analternative.Nevertheless, at this stage the party still lacked a clearly deﬁned structure. This created an urgent need to develop aparty organisation, based on an assembly model within a frame developed by the leadership. To prepare itsprogramme, they have asked myself and Juan Torres (co-author of Hay Alternativas) to formulate an outline of theeconomic programme that the Podemos government should implement if it is elected. This outline would be thebasis for a full discussion within the Party. The title ‘The Need to Democratise the Economy in Order to End theCrisis and Improve Justice, Well-Being and Quality of Life: A Proposal to Initiate a Debate to Resolve the Problemsof the Spanish Economy’, describes the intention of the document. It was widely distributed by Podemos, under thenew title Un Proyecto Económico para la Gente (An Economic Project for the People) and has so far had anenormous impact.The presentation of the proposal by the spokesperson of Podemos, Pablo Iglesias, together with ourselves asauthors, became a major event in Spain. The hostility of the mainstream and economic media, as well as theintellectuals and spokespersons of the major governing parties (PP and PSOE) has led to some notable attacksagainst the document – and indeed its authors. In Europe, the President of the Bundesbank indicated that theproposals put forward in the document would be harmful to the Spanish and European economies. Alongside theseunprecedentedly negative responses, however, it has also created considerable positive responses at the streetlevel in Spain and has contributed substantially to altering the character of the economic debate by challenging theprevailing ideology.Our document was not a budget for the future Podemos government, but rather the strategic lines to be followed.The analysis of the causes of the crisis focused on the enormous growth of inequality responsible for the ﬁnancial,economic, and political crisis. It puts at the centre of the analysis the conﬂict of capital (under the hegemony of3/5ﬁnancial capital) against labour. This has led to an enormous decline of domestic demand caused by the decline ofwages, increases in unemployment, and cuts of social public expenditures. The proposals, therefore, aimed atreversing this growth of inequality by increasing domestic demand (via salaries and employment growth) and byexpanding public expenditures and investments (in particular, the social infrastructure).It also underlined the need to expand public banking, as a way of providing credit to families and to small andmedium-sized enterprises. It proposed reducing the working week to 35 hours and reducing the age of retirementfrom 67 to 65, reversing policies approved by the PP and the PSOE. The impact of the programme would strengthenlabour at the cost of capital. Furthermore, it showed the clear need to correct gender inequalities as a way ofincreasing employment. It also suggested how all the proposals could be funded, asking for substantial changes inthe ﬁscal policies of the country and the reduction of tax fraud.What explains the success of Podemos?It is easy to answer this question. There is enormous anger toward what Podemos calls “ la casta,” the cast. Thatincludes the governing elites in the political establishment who have developed close complicities with the majorﬁnancial and non-ﬁnancial corporations that dominate the political and media institutions of the country. The call for“throwing all of them out” awakens general support among the majority of the Spanish people.In addition, Podemos uses a language that people relate to, redeﬁning class struggle as the conﬂict between thoseat the top and everyone else – a narrative that mobilises a diverse support base. Moreover, Podemos makes the callfor democracy central to its strategy, redeﬁning democracy to include diﬀerent forms of participation, such asreferendums (deﬁned as the right to decide, el derecho a decidir) together with indirect or representative forms ofdemocracy. It is because of this commitment to democracy that it has accepted the right of self-determination for thediﬀerent nations that exist in Spain, breaking with the vision of Spain as a uni-national state.This understanding of Spain as a ‘plurinational’ state has been a historic demand of all left-wing parties (includingthe PSOE), but it was abandoned during the transition to democracy by the socialist party because of the King(appointed by Franco) and the Army. The enormous popular demand by the Catalan population for the right of self-determination (not to be confused with the call for independence: 82 per cent of Catalans support the ﬁrst, 33 percent support the second) has created enormous tension within the central government and today is highlyunpopular.The success of Podemos has become a major threat to the Spanish (and European) establishment. Today, theSpanish ﬁnancial, economic, political, and media establishments are on the defensive and in panic, having passedlaws that strengthen the repression. The heads of the major banks in Spain are particularly uneasy. The chairman ofthe Spanish banking group Santander, who died in September last year, indicated shortly before he died that he wasextremely worried, noting that Podemos and Catalonia posed notable threats to Spain. He, of course, meant hisSpain. And he was right. The future is quite open. As Gramsci once indicated, it is the end of a period without aclear view of what the next one will be. Europe, Spain, and Catalonia are ending an era. This is clear. What remainsunclear is what will come next.Please read our comments policy before commenting .Note: This article gives the views of the author, and not the position of EUROPP – European Politics and Policy, norof the London School of Economics.Shortened URL for this post: http://bit.ly/1zVQhPj _________________________________About the author4/5Vicente Navarro – Pompeu Fabra University Catalonia Vicente (Vicenç in Catalan) Navarro, is professor of Public and Social Policy in The John HopkinsUniversity USA and the Pompeu Fabra University Catalonia, Spain. He is also the Director of theJHU-UPF Public Policy Center in Barcelona, Spain. He has written extensively about Europe andSpain and his book Bienestar Insuﬁciente, Democracia Incompleta: Sobre Lo Que No Se Habla EnNuestro País received the Anagrama Award (equivalent to the Pulitzer Prize in Spain).5/5

After Syriza’s victory, Podemos now poses a major threat to the Spanish political establishment

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