Politics, it would seem, does not like being out of the spotlight. On a quieter week for Brexit and Trump, the vacuum was filled by the eager Europeans. In echoes of last year’s Italian election, where the scars of the Eurozone crisis from a decade ago are still inflamed, the tension of populist politics spread to Spain, where they held a general election last night.
The current ruling party, PSOE (Partido SocialisTheta Obrero Español, or ‘Spanish Socialist Workers’ Party’), which only came to power last year after ousting the reigning People’s Party in a confidence vote, won the majority of votes. Celebrating a decisive victory, Pedro Sánchez’s party increased their percentage of the overall vote to 28.7%, up from 22.6% in the last general election in 2016.
Much of the success of PSOE can be found in the implosion of their opposition, which saw Spain’s right-wing parties split into three distinct entities, diluting their influence over voters. The campaigning from right-wing parties was equally disastrous and played into the hands of the low-key strategy employed by PSOE.
Mirroring the UK, the likely option is for Mr Sánchez to form a coalition with moderate regional parties to form a majority government. However, in a radio interview this morning, it seems the PSOE has not ruled out reigning as a minority government; Spain is the only country among the largest EU states not to have had a coalition government in the past 40 years.
The markets’ biggest fear would have been the emergence of the anti-establishment party Vox taking a grip on Hispanic politics. Political polarisation is becoming the new normal, as western politics move away from the centre.
Content provided by Beaufort Investment Management