More than 13 million Spanish wage-earners and pensioners will begin receiving 400 euro (about $600) income tax rebates in June. The money should arrive just in time to help them pay the credit card bills for the mini-holidays they traditionally take during Holy Week (which the Spanish secular elite now call “Spring Vacation”).
The cash handouts come just one month after Socialist Spanish Prime Minister José Luis Rodríguez Zapatero was re-elected to another four-year term in office. Indeed, the tax rebates, which are retroactive to January 1 and will cost the government more than 5 billion euros, are part of an ambitious package of Socialist campaign promises that is truly mind-boggling in scale.
In fact, the sum total of Zapatero’s electoral commitments will cost his government an additional 22 billion euros during the next legislature, or a whopping 2.1 percent of Spain’s GDP.
According to a financial summary of Socialist campaign promises, commitments in the category of “Employment and Social Welfare” will cost 11.5 billion euros between 2009 and 2012. Add another 6.15 billion euros in the area of “Innovation, Knowledge and Sustainable Progress”. And then add another 3.5 billion euros in the post-modern-sounding category of “Liberty, Coexistence and Rights in a Globalized World”. And 950 million more euros to pay for other campaign promises not covered by these categories.
Indeed, Zapatero has promised something to everyone. For the 1.7 million Spaniards eligible to vote for the first time, for example, Zapatero promised rent subsidies for the under-30s and the construction of 150,000 low-cost homes. In a bid for the female vote, he proposed that working women should pay less tax than men. And for low wage earners, he promised to exempt them from paying income tax altogether.
Zapatero has also promised: to raise pensions and the minimum wage; to create 300,000 new child care slots; to increase autonomy for the region of Catalonia; to financially compensate companies that adapt their working hours to those of schools; to provide new fathers with one month of paternity leave; to plant 45 million new trees (at one for each Spaniard, the Socialists will have to plant 30,821.9 trees every single day for the next four years); and so on.
Zapatero has justified these “prudent” and “plainly credible” expenses with the Keynesian idea that encouraging consumption could put the wheels of the Spanish economy back in motion, now that the construction bubble has burst and economic growth is grinding to a halt. The Socialists say their campaign promises will increase GDP growth by 0.3 percent, largely by creating half a million new jobs. They also say the money will come from the government’s fiscal surplus of 2 percent of GDP.
In any case, Zapatero (as well as all of those Spanish voters who expect him to deliver on his promises) is assuming a high rate of economic growth from which his government can reap a perpetual “fiscal dividend” to fund new programs. But the European Commission, after analyzing Zapatero’s new spending plans, has just reduced its estimate for economic growth in Spain by 0.5 percent in 2008. And then, just days after the election victory, Spanish Finance Minister Pedro Solbes admitted that the government’s growth estimate of 3.1 percent in 2008 was not realistic. Indeed, some forecasters now expect economic growth in Spain to fall below 2 percent this year.
Zapatero says he is just a nice guy who wants to put more money in people’s pockets. But many Spaniards, including some Socialist allies in parliament, say there is more than altruism behind Zapatero’s largesse. Spain’s biggest trade union, Comisiones Obreras, says the tax rebate, for example, is “opportunistic” and “a one-off payment for voting Socialist”. The Convergència i Unió, a Catalan nationalist party, has denounced Zapatero’s “banana republic tactics” as “a blatant attempt to buy votes with public monies.” And the opposition conservative Popular Party has branded the tax rebate as “naked electioneering”.
What has been interpreted as vote buying was also turnout buying. Zapatero’s big concern was that Socialist voters, who are notoriously less disciplined than their conservative counterparts, would stay at home out of complacency. But by turning the Spanish Treasury into a giant political patronage machine, Zapatero was able to activate and reward passive supporters for showing up at the polls. Indeed, voter turnout on March 9 was at near-record levels, which was a major factor in Zapatero’s re-election victory.
But by agreeing to Zapatero’s clientelistic quid pro quo, Spanish voters have effectively sold their souls to an indomitable welfare state. Indeed, by pledging their loyalty to the state-worshipping Zapatero in exchange for material comfort, Spaniards have delivered themselves almost completely into the arms of an unlimited government that will intervene in every aspect of their lives… from cradle to grave, as goes the cliché.
Spanish leftwing elites love to pontificate about how the American political system has become corrupted by money. But those very same elites have turned Spanish democracy – now just 20 years old – into a vote-buying and patronage-dispensing system that effectively places the entire population on the state payroll.
And by re-electing Zapatero (who even many of his most loyal supporters admit was a mediocre candidate), Spanish voters have shown that they are unable or unwilling to break free from the system that enslaves them.
Spain is in many ways a microcosm to Europe as a whole, and thus the Spanish election offers some important lessons for European Conservatives more broadly. One of these is that Conservatives who campaign on the time-honored principles of self-reliance and limited government will have an increasingly difficult time winning elections in a political environment where voters expect the government to cater to their every need.
For Spain it may already be too late. But now would be a good time for European Conservatives to articulate a new vision for Europe… one that can win elections.
Soeren Kern is Senior Fellow for Transatlantic Relations at the Madrid-based Grupo de Estudios Estratégicos / Strategic Studies Group