Earlier this year, the electoral victory of Syriza in Greece marked the first government elected within the troubled eurozone to finally say no to European officials who for years have been pressing for less government spending and for sweeping economic reforms to remake Europe. While many thought it was impossible for a small country that made up just 2% of the 19-nation eurozone’s economy to meaningfully change Europe’s economic trajectory, it is already happening.
Last month, Greece received a four-month extension on its loan from international lenders. While some have viewed this as another example of Athens prolonging its debt troubles and ‘kicking the can down the road,’ it is a significant victory for Syriza. After all, this marked the first time Greece has been able to renegotiate the terms of its bailout. And on Monday, officials are expected to present its proposals to eurozone finance ministers. If the proposals are eventually rejected, Greece is considering calling new elections or a referendum over its deal with lenders.
As the Syriza Party continues to build on its momentum, could Spain’s Podemos, too?
Since Podemos (which translates to ‘We can’) was created in January 2014, the party has surprised many by winning 8% of the vote in Europe’s parliamentary elections. The organizations that had presided over Spain’s heretofore two-party system – the PSOE (center-left Socialist Workers’ Party) and the PP (right-wing Popular Party) – took less than half of the vote, as compared to 81% in the prior (2009) election. By November of last year, Podemos was leading all other parties in the polls.
For Spain, this has truly been a seismic political shift – equivalent to having a third party in the U.S. pulling ahead of Republicans and Democrats less than a year after its founding.
The Podemos Party promises a better future by rejecting the fiscal austerity that dragged Spain down. Its proposals to lower the retirement age and reduce the work week would also help open up jobs for the unemployed. In a country where there have been hundreds of thousands of evictions, and where – unlike in the United States, people still have to pay their mortgages even after they lose their homes – it also proposes reforms for the housing market. And Podemos wants to make the European Central Bank – the most important decision maker of the eurozone – accountable to the European Parliament, as well as change its role so that it could promote full employment.
A large and vibrant social movement known as the Indignados, or 15-M, paved the way for this electoral revolt, with massive street demonstrations and local organizing against austerity measures that its supporters found unreasonable and abusive. Just as the Occupy Wall Street movement in the U.S. put inequality on the national political agenda for the first time in decades (even former Florida Gov. and potential Republican presidential primary contender Jeb Bush is talking about it) 15-M changed the political debate in Spain – only much more so.
Podemos’ Secretary General, Pablo Iglesias, a 36-year-old political science professor who speaks about the need for Spanish citizens to reclaim their democracy, has reached millions of people over the last few years on major television shows, skillfully debating establishment opponents. A series of corruption scandals involving the current government also put the public in the mood for something clean and untainted.
Podemos’ platform is sure to speak to Spain’s unemployed youth. The ruling PP, which has its roots in the fascist dictatorship that ruled Spain for nearly four decades until 1975, is trying to counter the new challenge by arguing that Spain has returned to growth, and that its policies are working. But this is unlikely to sway many voters. The Spanish economy grew by just 1.4% in 2014, and current unemployment of 23.7% is not that much of an improvement from its peak two years ago of 26.3%. Youth unemployment is more than twice the overall rate. Unemployment is what matters most; there is substantial evidence that long-term unemployment has numerous social costs besides loss of income, including on mental and physical health, suicide rates, life expectancy, and the well-being of the children of the unemployed.
The International Monetary Fund (IMF) projects unemployment to remain stubbornly high at 18.5% in 2019. This is assuming that things go according to plan, and ignoring that IMF projections have tended to be over-optimistic in the past few years. But the most outrageous part of this forecast is that the IMF is also projecting that the Spanish economy in 2019 will be very close to full employment. In other words, the Fund – and by extension the European authorities— are saying that 18% unemployment is basically full employment for Spain. European officials are essentially telling Spanish citizens that there is really not much of a future for the country, especially for young people.
A 2009 consultation between the IMF and the Spanish government stated that, “empirical evidence also suggests that recoveries from economic crises often serve as an opportunity for reform.” The kind of ‘reforms’ that they were referring to were those that the current Spanish government has already implemented or tried to implement: cutting pensions, weakening labor’s collective bargaining rights, cutting public services. This has been the agenda of the troika —the European Commission, the European Central Bank, and the IMF — for the past five years in the eurozone. Syriza has put its foot down to demand an end to this torment, and now Podemos has risen even more quickly than Syriza to join them. This is what democracy looks like – even the rigid, unaccountable structure of the eurozone will not be able to stop it from spreading.
Mark Weisbrot is co-director of the Center for Economic and Policy Research, in Washington, D.C. He is also President of Just Foreign Policy and author of the forthcoming book, Failed: What the “Experts” Got Wrong About the Global Economy (Oxford University Press)