Opposition Right raises concerns over High Unemployment

by Clifford F. Thies

As expected, the ruling socialists have now called a snap election, for November 20th.

Being a minority government, the socialists relied on support from several smaller parties. One of these smaller parties, the Catalonian Convergence and Union Party, had signalled that it would not support the budget proposal that the government had to pass by the end of September.

Were the budget proposal to fail, a snap election would have had to be called. It appears that the socialists preferred to call a snap election prior to the bugdet vote, rtather than be forced by a failed budget vote, into a snap election. Now, the socialists will desperately try to win a new mandate from the voters of Spain or else to pass the hemlock of restoring order to the budget to the opposition party.

Recent public opinion polls indicate that the opposition People's Party, a center-right party, will crush the socialists in the upcoming election, following up on its enormous victories in recent regional and state elections. Both of the country's leading polls give the People's Party a double digit lead over the socialists, within reach of an absolute majority, complemented by strong support for regional center-right parties in Catalonia and the Basque region.

Under new leadership, the People's Party has shifted to more moderate positions on social issues and focused more sharply on economic issues. Prior to the call of the snap election, It was already readying an austerity package to immediately cut the national deficit in half from a U.S.-like level of about 11 percent of GDP, through spending cuts rather than tax increases. The plan is to spur economic growth so that growing revenues from a revived economy will close the ramaining gap in the budget and, by the way, reduce the catastrophic unemployment rate of 20 percent.

In the U.S., the official unemployment rate is 9 point something, but expanded definitions of unemployment (including people working part-time who want to work full-time and people who are so discouraged about the prospect of finding employment that they've stopped looking) approach the catastrophic level being suffered in Spain.

Following up on this spring's regional and state elections, the local governments that shifted over to the People's Party have been found to be in even worse condition than was being reported. By reason of budget gimmicks and outright misrepresentation, local deficits are actually much higher, requiring even more draconian fiscal measures.

Photo credit - Allianz.com Eco Forum Qwiki.com