Podemos, the radical leftist party that was created earlier this year in Spain, is now the most popular political party in the country (see the crazy results from El País’s election poll over the weekend). If the election were held tomorrow, Podemos would get 27.7% of the vote. The other two major parties, PSOE and PP, would get 26.2% and 20.7%, respectively.
This is going to have major implications for Spain’s political and economic stability.
It’s been more or less a two-party country since the end of the Franco era 40 years ago. Nicholas Spiro, managing director at Spiro Sovereign Strategy, had this to say in a note Monday:
One of the reasons why markets have taken a more sanguine view of Spain is that the country’s political system always seemed more stable – particularly vis-à-vis Italy … This perception was always a superficial one and is now positively flawed. Political risk in Spain has been rising sharply of late. While investors have focused on the standoff between Barcelona and Madrid, they should be paying more attention to the surge in support for Podemos… At the very least, it has a strong chance of becoming the new left in Spain – and a much more militant, populist and anti-German one at that.
Really, there’s one number that explains the emergence and popularity of radical politics in Spain: 53.7%.
That’s the percentage of Spaniards under the age of 25 who are currently unemployed — more than double the already horrific 24% of all working-age Spaniards who are unemployed. This is the making of a lost generation, and an indication that Podemos is probably just getting started.