SHARE
COPY LINK
OPINION

POLITICS

Elections will be critical test for fractured system

You have to be either foolish or very brave to try and predict the outcome of Sunday’s local elections in Spain.

Elections will be critical test for fractured system
Prime Minister Mariano Rajoy at a PP rally in Valencia. Photo: Jose Jordan / AFP

However, there is one reasonable assumption to be made and it is this: the parties that have dominated Spanish politics for two decades: the Socialists and Popular Party will no longer do so, unless they form a coalition with some, until now, minor parties.

The influence of two new parties, Podemos and Ciudadanos, is extending all over the country, including in areas rooted in strong nationalist tradition like Catalonia and the Basque Country.  Both parties have a large backing in the big capitals, such as Madrid, Barcelona, and Valencia, where they can tilt the traditional political balance.

Podemos (We Can), led by Pablo Iglesias, a university teacher of politics in Madrid, was the third most voted party in the European elections in Spain last year. Iglesias won 5 seats and 8 percent of the votes. Podemos’s surge and the extent of the main political parties was not foreseen by opinion polls.

Pablo Iglesias, the pony-tailed leader of Podemos Photo: AFP

They voice the discontent  of  young Spaniards. Its strong affinities with the Greek Syriza has made it the target of  attacks from the conservative parties, and very often from the socialists too.

Podemos, however, is not taking part in the local elections this time. They prefer to focus on the general elections to be celebrated at the end of this year.  Instead, some groups ideologically close to Podemos with the name Ganemos (Let Us Win) will pose a major challenge in the electoral contest in the largest cities.

Ciudadanos (Citiizens) is an emerging force born in Catalonia in response to the nationalist parties. In under a year they have become very popular in the rest of Spain.  The party’s leader, Albert Rivera, a young and photogenic lawyer is attracting a lot of attention as the new captain of the political centre.  There are few doubts that he is bound to play a major role in the future of Spanish politics.

Albert Riveria, the leader of Ciudadanos – the Citizens – party. Photo: Josep Lago / AFP

Ciudadanos are attracting centre-right voters. They offer a reformist agenda that is a middle-ground between the prolongation of the system shaped by the PP and PSOE and a more radical change proposed by Podemos.

It seems likely that Ciudadanos will hold the key, not only for regional and local parliaments, but for the nation’s government.

Not a single day goes by without a new case of corruption being unveiled. Even some members of the royal family have been on trial . Spain is no longer the successful country which made a smooth transition from a dictatorship to a democracy.

Despite the latest indicators, which confirm the growth of the Spanish economy, after six years of stagnation the truth is that unemployment levels are still the highest in Europe, 23 percent, which rivals this figure in Greece. 

For young people, with 50 percent unemployment the future looks bleak. Many have opted to go abroad to get jobs they cannot find in Spain. The European Union has urged Spain to create new jobs. The future of retirement pensions is at stake. Education and Health have suffered serious cuts. The budget of two Spanish football clubs exceed that of the largest hospital in the country, La Paz (Madrid) with 3.300 workers, and more than 200.000 patients per year.

In this political climate the promises of the president, Mr Rajoy, go nowhere. Some members of his party applaud his calm, but many others accuse him of hiding his head in the sand and of not wanting to confront the problems which face Spain. Some miss the energy of his party predecessor, Jose Maria Aznar.

Challenged by some prominent members of his own party,  Mr Rajoy hopes the recovery of the Spanish economy and his stern defence of Spain’s unity will play in his favour. But this may not be enough.

Four out of ten Spaniards don’t know who to vote for. In a science survey carried out in the country recently, 25 percent of those questioned thought that the Earth spins around the Sun. It can be hoped that their political knowledge is better than their scientific understanding. Podemos and Ciudadanos are now the new stars and Spanish politics may have begun spinning around them.

Alberto Letona is a Basque journalist living in Bilbao. He is the author of Hijos e Hijas de la Gran Bretaña – Sons and Daughters of Great Britain – in which he delves into the psyche of the British in an attempt to explain them to his own countrymen. 

 

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.
For members

PROPERTY

ANALYSIS: Is Spain’s decision to axe golden visa about housing or politics?

The government claims the decision to scrap the golden visa is about controlling a speculative property market, but experts aren't sure it'll make much of a difference and critics say it's a political 'smokescreen'.

ANALYSIS: Is Spain's decision to axe golden visa about housing or politics?

On Monday Spain’s Prime Minister Pedro Sánchez shocked many and announced plans to scrap Spain’s golden visa (visado de oro). You can read more of The Local’s extensive coverage of this decision here and its potential impacts below. 

The golden visa allowed non-EU nationals to gain Spanish residency if they bought property worth €500,000.

The visa, first introduced in 2013 by the then centre-right Partido Popular government, has been criticised for essentially selling Spanish residency (and by extension, EU rights) to the wealthy, as well as contributing to property price inflation. 

READ ALSO:  Q&A: When and why is Spain axing the golden visa?

However, some commentators in Spain say that foreigners purchasing luxury properties for half a million euros or more has little impact on Spaniards struggling to find affordable housing, and that the number of property purchases made through the scheme made little difference to the market overall.

Golden visas issued through the purchase of Spanish properties worth more than half a million euros total 14,576 since its inception, according to Spain’s Housing Minister Isabel Rodríguez.

Now, after the dust has settled, property experts and politicians alike have begun to consider the potential consequences of the decision and some are questioning whether it was about housing at all or was a purely political move.

Critics of Sánchez argue that scrapping the golden visa is a ‘smokescreen’ to distract from poor management of the rental sector. Property experts wonder how much effect it will really have on reducing prices for locals, and some fear the decision could even drive away foreign investment in Spain.

What the experts say

It’s certainly true that some experts, whether in property or immigration law, feel the decision could deter non-EU foreigners from coming and investing in Spain.

Maryem Essadik Rhafour, an immigration law expert and partner at Marfour International Law Firm, spoke to The Local and described the move as “a bad decision” that could potentially drive away foreign investment to Spain.

The golden visa, she said, “is a type of investment that has brought a lot of foreign capital to Spain. Moreover, behind every investment there are thousands of sources of income for the local population.”

READ ALSO: What the end of Spain’s golden visa means for foreigners

“This type of measure slows down the arrival of foreigners with a high level of economic capacity and a high level of consumption,” Rhafour added.

Though the total number of golden visa holders is small overall, according to transparency data analysed by Spanish daily El Diario golden visa holders have pumped €5 billion into the Spanish property market over the last five years alone, something that some argue distorted the market overall.

Yet the proportion of property sales made through the scheme is very small. A spokesperson from property website Fotocasa told state broadcaster RTVE that golden visas represented “a very small percentage” of property purchases and that removing them “would not really have an impact on the common residential sale and purchase market.”

A couple pose next to a Ferrari car in Puerto Banus, near Marbella, on March 30, 2013. AFP PHOTO / JORGE GUERRERO (Photo by Jorge Guerrero / AFP)

 

However, despite that some feel that the decision is still a positive step forward and symbolic in terms of trying to address the structural problems in the Spanish property market. In Spain in recent years, anti-foreigner and anti-tourist sentiment  has grown. Much of this comes from a resentment among Spaniards towards short-term tourist lets (known as pisos turisticos in Spanish) that cater to remote workers and digital nomads, which has an inflationary effect on local markets.

As such, for many the issues of spiralling rental costs, tourism, the influx of digital nomads and the golden visa are all intertwined and the government’s measure, indeed any measure, perceived to be doing something about the impact on Spaniards is welcome.

READ ALSO: Where in Spain do locals ‘hate’ tourists?

Julio Rodríguez, a member of Spain’s Council of Statistics, told RTVE that although “it will have a limited impact on the overall demand for housing… the message is positive in terms of reducing speculative tension.”

This market speculation increased particularly after the pandemic, when the number of golden visas given out increased rapidly.

“It was in 2022 when the alarm was raised as golden visas doubled,” Housing Minister Isabel Rodríguez told journalists at a press conference on Tuesday.

“In 2016, 471 golden visas linked to Spanish real estate were issued. In 2017, 946. In 2018, 988. In 2019, 861. In 2020, 632. In 2021, 997. In 2022, 2,017. And in 2023, 3,272.”

However, despite this clear post-pandemic uptick in golden visas, it is undeniable that the number of foreigners purchasing property in this way made up a very small proportion of the total number of properties bought by foreigners in Spain. Critics have been quick to point out that golden visa holders represent a far smaller share of the foreign buyers market than other foreign second homeowners without a visa (0.7 percent compared to non-resident foreign buyers who bought a Spanish home in 2023).

So it seems that on balance, the decision to scrap the golden visa is certainly seen as a positive step or symbol, but may not have as big an impact as many first thought, or indeed the government let on when announcing it.

Smokescreens and demagoguery

Despite praise from some Spaniards, the Sánchez government has faced growing criticism in the aftermath of the decision. Many feel it is a performative political ploy that will have little impact on house prices.

Citing statistics on the percentage (less than 1 percent) of properties golden visa holders purchased, opposition Partido Popular spokesman Miguel Tellado claimed in a press conference that eliminating the golden visa is “a smokescreen to cover up the government’s incompetence in housing policy.”

“It’s a good try but I have to tell you that it’s not going to work,” he added.

But it’s not just Sánchez’s political opponents critical of the move. President of the Spanish Chamber of Commerce, José Luis Bonet, has described the scrapping of the golden visa scheme as a “demagogic and ill-advised gesture”.

Luxury houses and hotels in Llafranc, on Spain’s Costa Brava. Photo: Manuel Torres García/Unsplash

The commerce leader also believes the decision could drive foreign investment away. “Spain has become the summer resort and second home for millions of Europeans. Reducing the ways for them to come here seems to me to be unwise,” he said.

Ruth Merino, regional Minister of Finance, Economy and Public Administration in the Valencia region, where many golden visa holders choose to settle, described the decision as “electioneering.”

“This is not good news, it gives the impression that Sánchez does not have a plan for housing: he has electioneering ideas,” she said.

Internal politics

There’s also another layer to the political considerations behind this decision, and it revolves around internal management. The Sánchez government has faced growing criticism for its housing policy not only from opponents on the right, but also from the left too.

Sánchez’s Socialists (PSOE) are in coalition with far-left Sumar, a party which has long called for better regulation of the property market and protections for Spaniards getting priced out of their own towns and cities. Scrapping the golden visa could also speak to the internal political pressures within the Spanish coalition: Sumar had been pressuring PSOE for this, or restrictions on the golden visa scheme at the very least, for some time.

Upon hearing the news, Culture Minister Ernest Urtasun, a Sumar member, referred to the Spanish golden visa as a “European disgrace”, adding that “it cannot be that someone is given a residence permit for the fact of being rich; this is creating first and second-class citizens.”

In this sense, and with the opinions of property experts considered, scrapping the golden visa does appear more like a political step than it does a strictly housing policy decision.

The political benefits are clear. By scrapping the golden visa, the government can stand up to its critics that claim it does nothing about the housing crisis, while also simultaneously keeping members of its coalition on side and quelling frustrations (however disingenuously) among Spaniards about the property market more widely, that is to say: the government felt political pressure to be seen to be doing something about the housing problem, not that this decision will necessarily do anything to solve it.

SHOW COMMENTS