Spains Socialists scuttle the ship

11th October 2011, Comments 0 comments

As his second term draws to an end with the start of the general election campaign, Zapateros party is in a mess of its own making.

The legislature is limping to a close. Since Jos Luis Rodrguez Zapatero’s conversion to market orthodoxy in the spring of 2010, the prime minister has made no secret of the fact that hissole obsession is to sail the Spanish ship clear of the turbulent waters of a bailout, and he seems set to succeed. But hisgovernment’s final manoeuvres have unfortunately had the effect of scuttling the lifeboat of Socialism driven by the party’s chosen candidatefor the November 20 elections. Alfredo Prez Rubalcaba is an able seaman, but he is navigating into an electoral stormmade even worse by the last acts of his formerCabinet colleagues.

Firstcame the tawdry deal with the Popular Party PP to reform the Constitution in a question of days, banishing the idea of budget deficits asall the other parties and the indignados protestors snarled their disapproval of such roughshod neoliberalism. It was worth perhaps a few days of respite from the markets’ ravages, but Spain’s risk premium remains sky-high as the flares go up from Athens and Rome and theParis-Berlin euro-zone axis dithers over whether the dangers of a fresh rescue operation are too great to be countenanced.

Then followed the comic opera of the revamped wealth tax, something Rubalcaba hadtaken it upon himself to champion as a token of his intention to retainhis left-of-centrevalues in the coming election campaign.The PP smelt blood: the Zapatero government was drifting towards a reversal of one ofits raft of frivolous decisionsin the heady days of crisis denial in 2008,when ittold regions to stop collectingtax on large fortunes for which they would be compensated in exact terms. In response,PP administrationsup and down the countrydeclared a mutiny; they would not collect any new levy.

On statetelevision, candidateRubalcaba told the rebels they would no longersup fromthe compensation fund, and thus be even further out of pocketamid a scene of abject scarcity in regional financing. Sitting alongside him on the TVE screen was Economy Minister Elena Salgado, the guardian of fiscal rectitude, who said nothing…until the day before Cabinet approveda return of a revised wealth tax, when shepointed out that that compensation fund could not bewithheld, and that regions who did apply the new levy would actually be even better off than before.

Cuts and taxes, anyone?

But if the would-be hero of the post-Zapatero Socialist narrative has been tangled up in anunintendedpantomime scene, there is still the great entrance ofa booming-voicedvillain to come. His chorus is already pumping it out, as the PPs Esperanza Aguirre and Dolores de Cospedal merrily slash their way into public spendingin Madrid and Castilla-La Mancha. But PP leader Mariano Rajoy has yet to consent to rasping out a single bar of policy music, barringlast week’svaguemention of a commitment to trim corporation tax in certain circumstances. He has saidonly that he will not raise any taxes “at first”, and he won’t clarify whether he willattempt to unbundle the wealth tax fiasco.

Then again, why should he get out his megaphone? This is the man who has lost two elections: one three days after the March 11 bombings of 2004, whenAznar’s government was panicked intolying about the perpetrators, fearful of a nasty Iraq war bounce; and then again, three years ago, when he said the government was not telling the truth about the bubble that was the Spanish economy, and so it transpireda question of weeks later.

Rajoy knowstheelectoral ship he is sailing has a reliable motor, and that is an unemployment rate of over 20 percent. Rubalcaba may be the best prime minister Spain will never have, but all he has now are fine and honest-sounding words, which are being drowned outbya howling galeand the crashing break-up of a second Socialist term that has gutted the party.

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