1. The economy: from crisis to recovery?

In 2011 we said that the victory of the Partido Popular might be interpreted as being "a response to a disastrous economic context": unemployment at 21.28% (i.e. 4,998,300 unemployed, with only 18,484,500 workers in activity), and a high government deficit (9.4% in 2010, with a forecast of 6% for 2011) which in turn caused high government debt. The latter, after years of contraction, finally rose over 60% (60.1%, with a forecast of nearly 68% at the end of 2011) [2].

This was the context in which the Spanish gave the People's Party the biggest centre-right majority ever won since 1977 [3], the year when the country regained democracy. This majority led Mariano Rajoy to the function of President of the Government. We then said that the latter was a "discreet, reserved politician in spite of his training and his remarkable experience," who stood as a "predictable man", particularly in the areas of European and economic policy, which made it more than likely that the "policy options set down during the Aznar era would probably be continued, with particular emphasis placed on the need to guarantee economic stability," with an absolute priority being given to the strict commitments made to the European Union. This position seemed to be confirmed by the party's electoral programme, by Rajoy's interventions in various media and finally by his initial declarations and action after his electoral victory [4].

In any event, adapting to reality was much more difficult than foreseen. The Stability Plan concluded with the EU provided for a progressive reduction in the deficit, which fell from 9.4% in 2010 to 6% in 2011, then to 4.4% in 2012. However, and although the outgoing government has maintained to the very last that these goals would be achieved [5], it is true that in 2011 (as in the previous year), the deficit totalled 9.4%. As a result the government debt was also above forecasts and lay over 69%. In the meantime the GDP contracted by 0.6%.

This situation explains why the Spanish government adopted a series of exceptional measures during its second Council of Ministers (30th December 2011), mainly comprising a sharp reduction in government spending, as well as a significant increase in direct and indirect taxes [6]. In total contradiction with the electoral promise not to increase taxes these measures were justified by the need to reduce the budgetary deficit, which was to drop from 9.4% to the goal set for 2012 (this goal was initially set at 4.4%, although the EU later accepted ease off regarding this requirement [7]).

Political stability, encouraged by the absolute majority in Parliament, enabled the rapid adoption (in just six months) of these measures, and others, which were just as important [8]. Some measures were the cause of polemic, although - unlike the tax increases - were planned for in the PP's programme. This applied to the in-depth reform of the labour laws towards greater flexibility (Spanish legislation in this area being traditionally considered as one of the most rigid in Europe) [9]. Likewise reform of the financial sector in view of its consolidation [10] was not without problems.

These policies undeniably targeted reform. But they were extremely restrictive from an economic point of view (in line with the EU's general stability and growth policies, and integrated into Spanish legislation by the constitutional reform of September 2011) and had a high cost on the macroeconomic level, which logically worsened social and electoral support to the government.

Indeed the need to make drastic reductions in government spending to bring the deficit down practically led to the suppression of government investment; likewise it seriously affected other sensitive budgetary areas (reduction in civil servants' wages, greater difficulty terms of accessing educational and healthcare services etc.). At first - a period that lasted more than year - all of this contributed to a severe downturn in economic indicators, which were already in poor shape: GDP growth dropped from -0.6% (2011) to -2.1% (2012), whilst unemployment increased, rising from 21.28% (4,998,000 unemployed) to 26.94% (6,278,200 unemployed in the first quarter of 2013)! Of course the budgetary deficit was substantially reduced (from 9.4% to 6.9% [11]), in spite of the contraction in the GDP. It would however have been over 10% if the 39 billion € used to consolidate the financial sector - out of the 100 billion provided for in the MoU- had been taken into account (which was not the case, due to its exceptional nature). All of this continued to increase the government debt, which totalled 84% of the GDP in the same year, whilst the sovereign debt crisis, particularly severe in the Member States on the periphery of the euro zone, led to a rise in interest rates, totalling up to 600 basis points in additional costs in comparison with Germany.

The positive results hoped for by the government as a result of this economic policy only started to become apparent, quite reluctantly, at the beginning of 2013. Mainly, because of the increase in the GDP: even though it remained negative (from -2;1% in 2012 to -1.2% in 2013), this figure should be positive very soon (+1.4% in 2014, and more than 3% according to the forecasts for 2015 [12]). In logical correlation, and supported - according to many government experts - by the reform of the labour laws, employment (departing of course of catastrophic figures) has developed positively, which has led to a drop in unemployment from 26.94% (starting in 2013) to 21.18% (third quarter of 2015 [13]). The number of unemployed has decreased by more than one million in two and a half years (contracting from 6,278,200 to 4,850,000); and over the same period the number of employed increased rising from 17,030,000 to 18,048,000 [14]. At the same time the budgetary deficit decreased slowly but surely: 6.8% in 2013, then 5.8 in 2014, with a goal of 4.2% in 2015.

2. Corruption

The second factor that weighs significantly on the present legislature is undoubtedly political corruption. Indeed although the phenomenon is not new, several affairs came to light in the first months of the PP's government. Although events mostly date back to previous legislatures they did however challenge political executives and administrations of the Socialist and, especially, the People's Party. In particular, we might note the embezzlement of funds designed to finance social plans in Andalusia and training programmes for the unemployed in Madrid; or the organisation of a network facilitating work contracts and government services by regional and local administrations mainly in Madrid and Valencia, managed by members of the People's Party.

However it was the "Barcenas Affair" which affected the People's Party more directly and more profoundly. Luis Barcenas, an economist, practically unknown to the man on the street, started to work for the Alianza Popular, the PP's former name, in 1982. He rapidly took up administrative roles that were increasingly important within the party until he became its manager (towards the end of the 1980's, whilst Manuel Fraga chaired the AP), a role that he undertook for nearly twenty years. In 2008, Luis Barcenas was appointed treasurer [15] of the People's Party, then chaired by Mariano Rajoy. In fact, Barcenas resigned from his post of treasurer barely a year later (in 2009) and left the party in April 2010, ushered along by the first complaints (and consequent legal investigations) accusing him of having received bribes for the acquisition of public markets, as part of the previously mentioned corruption network. But the inquiry was interrupted due to a lack of evidence just before the elections (in September 2011), before starting again in March 2012, when the Spanish courts received information from the Swiss authorities revealing that Luis Barcenas had several bank accounts in Switzerland containing a total of 40 million € [16].

The former treasurer protested his innocence and was defended by many members of his party. But some months later (January 2003) the press revealed that for many years Barcenas had paid bonuses to nearly all of the People's Party executives, as well as members of government, including Mariano Rajoy himself but - curiously- , not to his predecessors [17]. Quite logically accusations like this (corroborated by handwritten documents which Barcenas initially denied having written, before finally admitting it) were declared false by nearly all of those involved. Mariano Rajoy stood before the Chamber of Deputies in plenary on 1st August 2013 and categorically denied all of the accusations directed against him. He maintained that he considered himself (personally, and as Chairman of the Partido Popular) as the victim of someone who had abused his position of power to accumulate wealth, and who for years had created false evidence that would guarantee his defence if need be. In all events, and although Mariano Rajoy admitted having made a mistake by trusting Luis Barcenas, the affair (revealed moreover during the toughest phase of the crisis) logically caused a massive shockwave amongst the population.

The shock was all the greater since just afterwards other affairs added to the general atmosphere of discontent. Amongst the latter we might quote in particular the criminal investigation which led to the arrest of Rodrigo Rato, former Economy Ministers and Vice-President of the government (in February 2015) during the mandate of Jose María Aznar (1996-2004), then Director General of the International Monetary Fund (2004-2007), before becoming Chairman of the conglomerate Bankia, of which the State is the main shareholder (2010-2012).

3. Developments in the party system

Of course the conjunction of two factors, policies facing the economic crisis and the corruption scandals, explain the development of public opinion, highlighted by the polls and in particular, the decline of the People's Party, especially during the first two years of the legislature [18].

In the opposition, the Socialist Party, severely weakened by its initial management of the economic crisis (2008-2011), has not been in any position to benefit from the decline in social and electoral support to the People's Party. This development, similar to that experienced in other European countries, had led to growing discontent regarding the way the political system is run and the increasing mistrust of public opinion has affected practically all of the institutions and party members [19]. This state of affairs has fostered the emergence of new political parties, which have greatly modified the Spanish system (and its tendency towards a two-party system) which became established in the years following the first democratic elections in 1977.

Indeed since then the Spanish political system has always been based on two main national parties which rallied between 65% and 75% of all votes: UCD and PSOE (1977-1982); PSOE and AP (1982-1989); PSOE and PP (1989-2014). These two parties succeeded each other unchallenged in government, with one-party teams, supported occasionally via parliamentary pacts (nearly always with nationalist parties). Alongside these two main parties only a few, much smaller national parties, sat in parliament (communists or coalitions including them, and sometimes various conservative or centrist parties) which represented around 10% to 15% of the electorate. The trend towards a two-party system seemed to be not only well established, but growing: in 2011, the PP and the PSOE together won more than 70% of the vote and more than 80% of the seats.

Hence the previously described atmosphere of crisis and mistrust, as well as the downturn in support for the two traditional parties seem to have favoured the rise of new parties, which for the time being are far from their goal of final consolidation. In fact, the polls dating from the first half of the legislature seemed to forecast the strengthening of the two "minor" political parties with seats in parliament since 2011 [20], but the 2014 European elections (the first national elections after those of 2011) showed, on the one hand, the significant decline of the two main traditional parties [21] and, on the other, that two new parties have emerged

First and foremost a new radical left-wing party (Podemos) which, riding on the wave of protest movements that emerged in many countries (from 15-M in Spain to "Occupy Wall Street") quite unexpectedly became the fourth political force in Spain [22]. The first national appearance of Ciudadanos was more discreet. Indeed, this little party created in Catalonia in 2006, which responds to the dominant nationalist discourse in the region with another discourse mainly based on the defence of the Constitution and the unity of Spain, did not even win a minority representation in the local, town or regional elections [23]. However during the European elections in 2014, with two relatively famous journalists as its lead candidates, this party won nearly half a million votes in Spain [24].

4. The Situation in Catalonia

This development intensified and was conditioned due to one of the aspects of Spanish politics, which attracts most of the attention of Spain's external observers: the "Catalan question". It is true that Catalan nationalism, in its various shapes and forms, has governed Catalonia almost since the birth of constitutional regime in force which dates back to 1980 [25]. Likewise it is undeniable that Catalan nationalism, which was usually the third force in the Chamber of Deputies in terms of numbers of seats, enjoyed significant influence until recently, especially in times when there was no absolute parliamentary majority, which helped it enjoy considerable political advantage. From this point of view in Spain there is a certain tradition of nationalist claims and agreements which are sometimes the focus of criticism.

Indeed important social and political groups believe that this tradition is a privilege, in the primary sense of the term: only applicable to Catalonia due to the mentioned political equilibrium, and generating inequality between the various autonomous Communities in Spain. Ordinarily, many of these groups have supported the PP, traditional defender of the constitutional unity and equality of all of the Spanish; however a number of them recently switched to vote for Ciudadanos, which maintained that discourse whilst the passiveness of the government seemed to increase over the past few years, which have been particularly critical.

The important decision taken by the Constitutional Court following action brought by the PP, cancelled a significant share of the new Status of Autonomy approved in 2006 and pushed the Catalan institutions to adopt a much more aggressive political line. Hence as of 2012 and during the political and social crisis, the Catalan government stepped up its drive towards independence. Firstly, a referendum on self-government was called in November 2014 but, after its cancellation by the Constitutional Court, finally turned into a citizens' consultation in which two million people took part, (i.e. more than one third of those registered). Then the Catalan government dissolved the Regional Parliament, which led to the organisation of elections on 27th September last with a programme that clearly defended independence.

The Spanish government preferred to maintain a low political profile, simply taking legal action to counter this process, in the hope of minimising the conflict. Logically this path was criticized by the most critical elements regarding peripheral nationalism (including many usual PP as well as some socialists' supporters and voters); whilst the "unionist" message by Ciudadanos was strengthened, as it was clearly shown during the regional and local elections in May 2015.

Indeed the second important national election after the general elections in 2011 by and large confirmed the new political landscape that had emerged during the European elections a year prior to this ... with some significant changes however. Again, the PP and the PSOE retained their lead positions, in terms of the percentage of votes, but Ciudadanos rose to third place, thereby relegating the coalition Izquierda Unida to fourth position [26]. In terms of power, although the PP won a relative majority in nearly all of the regions and in the main towns, the agreements between parties on the left (PSOE, IU, grass-roots lists [candidaturas populares] and nationalists) enabled the PSOE to take a significant share of the Autonomous Regions [27]; similar agreements enabled grass-roots and left-wing candidates to take the town halls of the biggest towns [28].

The Catalan elections of 27th September 2015 confirmed the decline of the two main parties and they also revealed the continued change in the balance between the two "emerging" parties. Indeed after this election, Ciudadanos clearly pulled ahead of PP and the Socialist Party and thereby became Catalonia's leading non-independentist party which strengthens its national establishment [29]. Podemos however (which again chose to stand in a left-wing coalition, thereby relinquishing its campaign under its own colours) achieved a very poor score [30].

Moreover the Catalan nationalist victory is undeniably very relative [31]: two months after the election, a majority able to form a government has still not been found. But the 72 independentist MPs (CiU, ERC et CUP) have succeeded in pushing a unilateral resolution through the Catalan parliament solemnly declaring that it is open to the "process of creating an independent Catalan State whose political regime would be that of the Republic" thereby expressing its intention not to submit to the decisions taken by the Spanish institutions, and particularly by the Constitutional Court. This declaration is a challenge to central power, but in 21st century Europe it seems difficult to imagine the success of such an initiative, which does not take into account the rule of law and ignores the established rules and the procedures to reform them (including of course the formation of the required majorities).

5. In conclusion: outlook as 20th December approaches

Hence the upcoming general elections will take place within an extremely different political landscape from that of 2011. Firstly on a national level the parties running are: an extremely weakened PP, which (still?) holds its status as the favourite, majority party; the Socialist Party, which continues to regress in comparison with its, poor, 2011 results; two new, vigorous parties (Ciudadanos and Podemos, in that order) which are hoping to become key players; and two other parties (IU and UPyD), which are fighting to retain their positions. The main nationalist parties are also hoping to keep their place, although it seems that the Catalan independentists wish to change theirs.

As for forecasts the comparison of the 2011 results with those of the present polls (November 2015) provides us with a good summary of the situation as we have illustrated in the table below [32]:

As we see this data seems to suggest a situation that to date has not been seen in democratic Spain, the main feature of which would be the lack of a majority able to form a "one party" government [33]. In other words if the results confirm the forecasts, they might lead to the formation of a coalition government, an option frequently adopted at Autonomous Community level. In all events there are several possibilities: a coalition between the PP and Ciudadanos; or the PP and PSOE; or the PSOE and Podemos, other left wing parties (IU) and nationalists...

Whatever the outcome the volatility of the electorate seems to have been quite high of late (especially regarding the new parties [34]), which is why it is difficult and riskier to provide more accurate estimates. However, without venturing too far, it is possible to forecast that if a coalition includes the People's Party, it will tend to maintain the same policy options as the outgoing government and will reap the benefit from the economic recovery forecast to occur over the next few years. Any other coalition (and in particular one including Podemos, which seems now unlikely, according to the most recent polls) would bring these policy options into question to some degree or another.

According to most experts the few weeks leading up to the elections will be much more decisive than usual. Firstly due to the volatility of the electorate, which has already began to test what happens when voters leave one or another of the main traditional parties, to the benefit of new and shifting parties. Secondly, because of the political drift of Catalonia. Indeed it is surprising to see that less than one month before the elections, the issues of policies against the economic crisis and corruption, which have been uppermost during the entire legislature, have almost disappeared from public debate that is now focused on the issue of the majority in the Catalan parliament. A majority, which to date, has been unable to find a government pact, but which seems to be determined to take a path that is clearly far from the constitutional framework in force (which can be modified of course, but still via procedures designed to this effect). Debate over Catalonia led to a response that forced the President of the Spanish government to put forward an agreement defending the unity of Spain to the main national parties which (except Podemos and IU) signed it; with this he reclaimed shared political initiative, the electoral effects of which will only become apparent on 20th December, when the ballot will give us its verdict.