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Dec 21, 2015 | 14:26 GMT

4 mins read

Spain's Elections Yield an Unsettled Landscape

(Denis Doyle/Getty Images)
Spain's general elections on Dec. 20 produced an extremely fragmented parliament that will force the country's political parties to seek uncomfortable agreements to form a government. New elections cannot be ruled out either, since there is a chance that no compromise will be reached.
 
Prime Minister Mariano Rajoy's center-right People's Party won the election, but it only obtained 123 of the 350 seats in parliament, losing its absolute majority. The center-left Socialist Party won 90 seats. As expected, two new political forces, left-wing Podemos (69 seats) and centrist Ciudadanos (40 seats), performed relatively well.
 
With the election over, Spain now enters a period of tenuous political negotiations. In theory, a grand coalition involving the People's Party and the Socialist Party could control a solid majority in parliament. However, both major parties have ruled out joining such a government. The People's Party and Ciudadanos are close ideologically, but they lack the numbers to form a government without additional support. A center-left alliance including the Socialist Party and Podemos would also require support from smaller parties. Neither of the latter two scenarios would be particularly promising for stability.
 
The alliances do not have to be formal. The new government will require support from parliament, but an absolute majority of votes (176) is only necessary during the first attempt to appoint a government. Successive attempts to form a government would require approval from only a simple majority of lawmakers. Thus, starting in the second round, a minority government could be appointed if enough lawmakers from other parties abstain.
 
This is when the role of the king becomes important. According to the Spanish Constitution, the king should act as an honest broker among the political parties attempting to reach consensus to form a government. King Felipe VI will formally begin conversations with the parties in mid-January. If no agreement is reached within two months, the king must dissolve the parliament and call for new elections.
 
As a result, Spain is looking at three possibilities: a majority government involving multiple parties, a minority government dependent on support from other parties, or early elections. The first two options would require permanent negotiations in parliament to pass legislation. The third would mean a return to the polls around March or April.
 
The Dec. 20 elections will also impact the situation in Catalonia, where pro-independence forces have not been able to appoint a new government since regional elections in September. Catalan separatists are divided and waiting to see who will be in charge in Madrid before making their next move. Political uncertainty in Madrid and Barcelona will probably delay the independence process. In addition, the biggest winner in Catalonia in the Dec. 20 elections was Podemos, which supports an independence referendum but opposes a unilateral declaration of independence

A New Phase of Uncertainty

With these elections, Spain has entered a new political phase. Following the end of the Franco dictatorship in the late 1970s, Spain built a two-party system that generally produced stable governments. But the past decade's economic crisis evolved into a political crisis, reducing popular support for the traditional parties. Successive corruption scandals involving the People's Party further weakened popular trust in the establishment, giving rise to Podemos and Ciudadanos, two parties critical of Spain's political elite. The problem is that these new parties still are not strong enough to replace the old ones, which explains the fragmented result of the Dec. 20 vote.

Spanish Political Trends

Portugal is going through a similar situation. Conservatives won the country's general elections in October, but they likewise did not produce a solid majority. After then-Prime Minister Pedro Passos Coelho failed to form a government, he was replaced by a coalition of center-left and left-wing forces that will have a hard time getting things done. Consequently, both Spain and Portugal could see early elections in 2016.
 
In the coming weeks, Madrid and Lisbon will face similar issues. Both countries are seeing economic growth again after years of crisis, and recent moves by the European Central Bank (most notably the promise to do “whatever it takes” to protect the eurozone and the introduction of quantitative easing) have brought calm to debt markers. However, the economic recovery in both Spain and Portugal is fragile and tainted by high levels of public and private debt. And in both countries, financial and economic danger remains directly linked to political uncertainty. 
 
Fragile governments under popular pressure to reverse some of the economic reforms implemented during the economic crisis could derail the incipient recoveries in both countries. At this point, the 2009-2012 trauma is unlikely to repeat, but there is only so much political uncertainty the region can tolerate.

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