The PP will control €7 out of €10 of Spain’s public spending

By Julia Pastor, in Madrid | Mariano Rajoy’s People’s Party has won the most crushing absolute majority of its history, with 186 seats out of the total 350 of the Spanish Parliament (in 2000, former president José María Aznar achieved 183). On Monday, analysts of the financial City of Madrid expressed their opinions about this shift in the political scene.

“The elections results were already expected by the markets, since all the polls pointed to that direction. Therefore, the surprise would be the collapse of the outgoing party,” says Ahorro Corporacion.

The Socialist Party (PSOE) sinks to 110 seats, its worst results since 1977, the year of the first democratic elections in Spain. In 2000, the then socialist candidate, Joaquín Almunia, also obtained a short outcome, 125 seats, which rushed the party towards a sound internal restructuring.

The third party in votes was IU, a left-environmentalist coalition, which gained 11 seats, followed by the progressive party UpyD gaining 5 seats, the Catalan CIU with 16, and the Basque Amaiur, with 7.

The 15-Movement seems to have had little impact in the election results. One of the 15-M demands was a larger plurality in Parliament. It is true that the results have painted a more plural Parliament composed of 13 political parties, a picture only reached in year 2000, when 12 parties participated during the political term, but the movement has obviously failed in putting an end to the traditional two party-system in Spain. Some political commentators said on Sunday night that the effect was maybe the opposite: a growing single-party system.

Waiting for the first details of the new government reforms, Nordkapp’s experts say that

“Rajoy’s victory is a relief for the markets”.

They also point to the fact that

“with the absolute majority, the People’s Party will control 7 out of 10 euros of Spain’s public expenses […] what will happen in the markets will not depend on Rajoy’s decisions, but on Europe’s evolution. Spain is not an isolated compartment within a united Europe. What will happen out over Europe will affect Spain in a greatest extent than what will happen within Spain. In other words, Europe’s problem is beyond the Spanish elections”

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The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.

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