Looking at voting intentions polling data, it appears that the PP is holding on to a small lead over PSOE. However at one point in January, Podemos appeared to be in serious contention for victory. This coincided with the height of Syriza’s mpublic coverage after it seized power in Greece. Since then, the downturn in the Greek economy and the threat of euro exit has made such parties less attractive. Podemos’s support has fallen from a 10-poll average of 26.3% in February to the latest reading of 17.9% (chart 4). The PP is currently projected to win with 27% of votes, with PSOE expected to attain 23.8%.
Another party worth watching is Citizens, a long standing party which has always been focused on maintaining the status quo in Catalonia and opposing Catalan nationalism. However, from 2013, the party began to look outwards and quickly gained support with its mix of liberal, yet centre-right, politics. Citizens gained 3.2% of the national vote in the European elections in 2014, and 8.6% of votes in the 2015 regional elections. Citizens are in favour of a federal Europe, with autonomous regions. This has helped it win votes from Podemos, where voters would like to see an alternative to the established two main parties, but would also like conservative policies and continued euro membership.
Portugal: A close race
Across the border, Portugal is set to hold its legislative election on the 4th of October. Like Rajoy, Prime Minister Pedro Passos Coelho will also seek a second term, but unlike the PP in Spain, Coelho’s Social Democratic Party (PSD) was forced to enter into a coalition with the Christian Democratic Conservatives and People’s Party alliance (CDS-PP). The coalition is a natural fit for the centreright/ right-leaning parties, but the parties have lost popularity since being forced to implement harsh austerity and reforms. The PSD won 38.7% of the national share of votes in the 2011 election, but its rating fell to about 29% in polls conducted between February and April this year, putting it behind its main opposition, the Socialist Party, led by António Costa. As a result, the PSD and CDS-PP announced that they intend to seek office together as a coalition again, rather than run independently.
Latest voting intentions poll data shows that despite the pooling of support, the PSD/CDS-PP remains behind the Socialists, at 35.6% against 37.1% (chart 5). However, the lead the Socialists hold is well within the margin of error, and could easily swing in either direction between now and the election. Portugal has not seen the same level of support as anti-austerity and antiestablishment
parties as Greece, Italy or Spain. There has always been a left leaning presence in Portuguese politics which should not be mistaken with the phenomenon elsewhere. That is not to say there is no opposition to austerity at all. The left-wing Democratic Unitarians Coalition (CDU) is made up of the former Communist and Green (ecological) parties. In addition, the Left Block is another more left-wing alliance of like minded parties. Opinion polls show they have little support, with the CDU attracting 9.5% and the Left Block attracting 4.8% of the popular vote.
The Socialists have refrained from denouncing the fiscal compact, but did criticise the government for accepting all of the terms imposed by the Troika, and have also rubbished the Prime Minister’s claim that Portugal has had a clean exit from its bailout. Note that the 2011 election was triggered after the Socialist Party’s former leader and Prime Minister José Sócrates was voted down when he proposed additional harsh austerity measures.
Conclusions: “It’s the economy, stupid!”
In analysing polling data, it appears that both the Spanish and Portuguese elections should return a mainstream party to power. Investors will prefer a strong stable government, and probably a centre-right liberal party with a reformist agenda, but given Greece’s experience, will probably settle for a mainstream party.
In Spain, Podemos appears to have split the left-wing vote, giving the PP and Rajoy a good chance of returning for a second term. Moreover, the rise of Citizens could limit the influence of Podemos after the election. The risk of a disruptive party winning the election is now low compared to earlier this year.
In Portugal, there is even less risk than in Spain of a non-mainstream party wining the election. Investors would prefer either a victory for the current coalition, or an outright victory for the Socialists. A less ideal scenario would be the Socialists relying on either the CDU or the Left Block to form a government, given their euro-scepticism.