Contributed by Joe Montero

Spain’s Popular Party (PP) Government led by Prime Minister Mariano Rajoy fell last Friday, after a no confidence vote triggered by the climax of a corruption scandal.

Rajoy and the PP are in many ways heirs to the period of the Franco fascist dictatorship that came to an end in 1975.  Over the last 6 years, a combination of austerity measures, an increasingly autocratic style and rising discontent have eaten away at its legitimacy. This character of the Rajoy government has been closely associated with the endemic corruption that has finally caught up with it.

Podemos the anti-austerity party, had been trying to bring this end for some time. The difference now, is that the socialist party (Socialist Workers Party or PSOE), which had in effect been maintaining the Rajoy government, through its refusal to support earlier no confidence motions in the Spanish parliament, was now in a position where it found no other choice but to bring it down.

PSOE leader Pedro Sanchez will become the new Prime Minister, with the backing of Podemos and the Catalan and Basque independence parties.

A public release of ledger accounts had revealed a massive racket, involving a secret party slush fund, with regular payments made to “M Rajoy.”  He could not hide form the unfolding scandal. Not that he didn’t try. He claimed his innocence and still does. At the same time, he has been seen to fail to act to clean up the mess, even as a growing list of senior figures began to fall, until around 200 individuals were facing court.

The outcry over the corruption had by 2014, already compelled him to publicly apologise in 2014. He promised  the problem was a few bad apples and that they would be cleared out. Nothing really happened and the scandal continued to build.

By 2015, rising public anger reduced the government into minority status, and Cuidadanos, a new national top end of town party, was able to recruit a significant part of the departing Popular Party base.

Last week, the National Court found that some key people at party headquarters in Madrid had been taking kickbacks associated with government contracts. Long jail sentences were handed pout last week. One party official, party treasurer Luis Barcenas, was sentenced to 33 years. Francisco Correa (also known as “Don Vito” – yes, as in The Godfather), the businessman who was at the helm of the spiders’ web of criminal activity, which has engulfed Spain for the best part of a decade, was sentenced to 51 years.

Former Finance Minister Rodrigo Rato, received a jail term, for the misuse of corporate credit cards, at the same time that the prominent bank, Bankia SA, received 41 billion government euros ($48 billion), to help it out of the brink of collapse.

Former Labour Minister Eduardo Zaplana was arrested this month, on money laundering and bribery charges. He is still waiting to appear in court, as are legion of others.

As important as the corruption scandals have been, it has been the mishandling of the Catalan independence issue, which has seen the resurfacing of elements of the old fascist political style and a significant erosion of democratic rights, not only in Catalonia, but across Spain. The legal system has been misused, to have political opponents arrested and imprisoned. Systematic Censorship has been on the rise. The jailing for three years of a prominent rapper, for a song deemed to have disrespected the king, helped to bring build public indignation.

But it has been the failure to silence and impose the compliance of the Catalan independence movement, which showed the Rajoy government’s fundamental weakness, and has been an important catalyst in turning much of the wealthy and powerful elite away from the Popular Party. It meant that it can no longer depend on its patronage for protection, and eventually found it had nowhere to hide.

Now that Rajoy has fallen, the Catalan independence patties have been provided with the opportunity to resume their regional government.

At the national level, Sanchez has promised to root out corruption and undo the social damage caused by the Rajoy government.  He says that the “social emergencies” from years of austerity, will be dealt with before anything else.

This will include, improving job security, fighting inequality, providing a better life for the elderly and investing in public health care. Sanchez has promised to talk to the Catalans. A new election will be called before his term ends in 2020.

A good reason to expect that at least some of this may be implemented, is that concessions must be made to the other parties. With only 83 deputies out of the 350 in the parliament, the socialists  need their support to become the government. In the first place, it means getting the support of Podemos. Support from the Catalan pro-independence parties and the pro-independence Basque EAJ-PNV and EH Bildu is also needed.

The difficulty is that the socialist party has a history of being closely committed to the traditional politics of the two-party system and bipartisan support for austerity and opposition to the independence movements. The push for an alternative form of politics is now at the centre of Spanish politics, and the socialist party has fought to maintain the status quo.

Any shift in any of this, is bound to create internal tensions, and whether there will be a shift remains to be seen.

This socialist party had done much to bring austerity into Spain. It cut spending by €15 billion, brought in labour reforms that allowed employers to sack workers for taking time off (even due to illness) and lowered the amount of compensation workers would receive if they were laid off. They froze pensions, cut child welfare and home care for the elderly.

Has there been a break from this past or not?

There is also a major block around Cuidadanos, which may now be in place to take over the Popular Party mantle. The polls suggest that it is.  Cuidadanos brands itself as a party against corruption. Never mind that it has continued, to give support to the Popular Party. It voted against the no confidence motion. Cuidadanos is also committed to continuing the economics of austerity and can count on a great deal of media support and bankrolling by the rich and powerful, who fear that political change will threaten the privileges they are accustomed to.

On the aftermath of the vote, Cuidadanos called for an immediate election, in the hope that it would provide an opportunity for its ascendancy.

The Socialist party has another problem. It is itself tainted with corruption scandals and if this comes to a head, it could weaken its position in a big way. To avoid this, it needs to be seen to clean up its own house, and this may not be so easy, because it will mean treading on some powerful toes.

Podemos will figure highly. It is the party truly committed to a new direction, and it wants radical change. And it will set a price for the socialist party to become the government. A sticking point may be that Sanchez has said he will continue this year’s Rajoy budget, promising austerity measures to meet conditions imposed by the headquarters of the European Union in Brussels. If it goes ahead, this could be a new crisis in the making.

The anti-austerity party is pushing to be included in the government. If this does not happen, the socialists will be vulnerable and their capacity to stay in government might be short lived. If Podemos in included in the new government, Sanchez will face the wrath of the old guard within his party.

Whatever the near future brings, the demise of the Rajoy government is something that had to happen. In its going, it opens several possibilities. Whichever it is going to be in the short-run, the underlying crisis, with its economic, social and political dimensions remains, and it will continue to drive events into the future.