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Spanish Prime Minister Mariano Rajoy gestures as he arrives for first cabinet meeting after winning a parliamentary confidence vote for a second term ending 10 months of political paralysis that included two inconclusive elections, at the Moncloa Palace in Madrid, Spain November 4, 2016. REUTERS/Sergio Perez Image Credit: REUTERS

Democracy is often on a collision course with economic elites, sometimes in less subtle ways than others. Spain’s current plight is one such example. Last month, the country’s Socialist leader Pedro Sanchez was toppled in a party coup, paving the way for his fellow MPs to abstain in a vote to allow the conservative Mariano Rajoy to resume office as Prime Minister. For many traditional Socialist voters, Rajoy’s Popular party is the political wing of a venal, corrupt right-wing establishment: allowing them to form a minority government was an act of betrayal. But Sanchez’s subsequent revelations exposed the machinations of powerful Spanish interests.

After two elections that marked the collapse of the country’s two-party system, but failed to produce a governing majority, Sanchez had attempted to assemble a left-wing alliance, much like the one that governs in neighbouring Portugal. His ambition had been to form a government alongside Podemos — a recently-formed party that emerged from movements protesting against cuts that have devastated Spanish society — and backed by Catalan nationalists.

But last week, Sanchez revealed that he was blocked by powerful corporations, including banks and Spanish telecoms giant Telefonica. These interests run El Pais, the country’s largest newspaper. Unless Sanchez allowed Rajoy to return to power, or accepted a new round of elections, El Pais would launch a vicious campaign against Sanchez. A coalition with Podemos was simply intolerable.

Here was direct interference in Spanish democracy by unaccountable vested interests to stop a progressive government from taking power. “Sanchez has recognised the pressure of the oligarchic powers and that it was a mistake not seeking an agreement with us,” says Podemos leader Pablo Iglesias.

Indeed, Sanchez is a man riven with regret. He had attempted to form an alliance with the centre-right Citizens’ party — another beneficiary of the implosion of the two-party system. But it was all a ruse: Podemos was asked to back such an alliance, even though it meant signing up to right-wing economic policies that would have been impossible to accept. It was nothing more than an attempt to blame Podemos for preventing Rajoy’s return to power.

Spain’s Socialists are now in a terrible situation. Their grass roots are alienated, while the triumphant conservatives know they can coerce the Socialists to back their regressive budgets, threatening a snap election that would decimate their rivals if they refused. The Spanish Socialists were already halfway to suffering the fate of their Greek sister party, Pasok, which so alienated its natural supporters that they defected en masse to Syriza. The Catalan socialists are enraged by the party leadership’s actions, and could even split. Podemos can now position itself as the real opposition. But that is of little comfort to Podemos’ base, who could now endure years more of a conservative government that they had every hope of overturning.

What is happening in Spain is revealing about events far beyond the country’s borders. In Britain, Jeremy Corbyn’s internal opponents quite legitimately point to the Labour party’s abysmal poll ratings. It says much about the state of European social democracy that Labour’s polling is higher than almost all of its sister parties across the Channel. When Tony Blair won his landslide 1997 victory, social democrats were on the march across the European continent, including in Germany, France, Italy and Scandinavia.

Today’s social democratic parties are haemorrhaging support to the new Left, the populist Right and civic nationalism. The German social democratic leadership may be committed to the sort of “third way” politics some would like Labour to adopt, but in the latest poll they languish at 22 per cent. The French Socialists face being beaten by the far-right Front National in the first round of next year’s presidential elections. Sweden’s social democrats hang on to power by their fingernails, while their Nordic allies are exiled from power. Italy’s centre-left is a rare exception, but its only hold on power is precarious and challenged by the rise of the populist Five Star Movement .

The core base of European social democratic parties has fragmented: Between younger and older voters; university-educated and working-class voters in small towns; between those hostile to immigration and those who are not. The fury exchanged between centre-left and radical Left forces across Europe is, all too often, a deflection from an uncomfortable truth: That neither has so far produced a convincing answer to how these multiple divisions can be straddled, and how a viable electoral coalition can be produced that would win power.

It is frustration at unaccountable elites that produced Podemos in the first place: Its whole narrative has been vindicated. Five years ago, millions of Spaniards who were disillusioned with the political establishment and determined to make it pay for a crisis not of their making mobilised across the country. Without these so-called indignados, Podemos and its allies would never have emerged as mass political forces. Podemos has much to teach other European leftists about how to communicate beyond traditional comfort zones. But Podemos’ results in June’s elections were disappointing: It had expected to eclipse the Socialists as the second party, and was traumatised when it failed to do so. In other local elections it routinely underperforms its opinion poll ratings. The party is now engaged in profound soul-searching, debating how to democratise the party’s own internal structures to re-engage with the mass movements that produced it.

If Podemos capitalises both on disillusionment with the Socialists and the Popular party, it could provide an example for the Left across Europe. If it fails to do so, there could be terrible consequences across the continent. Right-wing populism is on the march and it is making considerable inroads into working-class communities that traditionally opted for the Left. If discontent continues to sweep the western world — or if there is another crash — then the populist right will be well placed to gain.

The old social democratic model is crumbling, but there is no guarantee that progressive forces will fill the vacuum it leaves. In Poland, the Left has effectively ceased to exist: Politics is a debate between former British prime minister David Cameron-style liberal conservatives and right-wing populism. If the left fails, Polandisation beckons for European politics. No pressure, Spain: But Europe’s future may depend on you.

— Guardian News & Media Ltd

Owen Jones is a columnist and the author of Chavs: The Demonisation of the Working Class and The Establishment — And How They Get Away With It.