Rajoy's rocky ride after 100 days in office

Four months after general elections in which Spaniards gave an absolute majority to the Popular Party, citizens are deeply discouraged and skeptical, according to opinion polls. An avalanche of austerity measures and budget cuts imposed by the government, which have had serious social repercussions, has not managed to calm foreign investors, and the constant barrage of bad news about the state of the economy and the financial sector, the relentless rise in unemployment (now more than 5.5 million people) and the deepening economic depression has worn Spaniards out. Day after day, they are witness to the extent to which Mariano Rajoy is prepared to go in order to regain the confidence of the markets; and day after day, their hopes of solid results - and not just momentary relief - are dashed.

Moreover, while all eyes are trained on the economy, other problems keep popping up to worsen affairs: Argentina's expropriation of Repsol affiliate YPF, corruption scandals, trouble with the monarchy, and above all, a growing concern over the degree of social change taking place: are healthcare and education cuts temporary measures, or actually a new social model that is being ushered in with no public debate under the pretense of the crisis? Is the constant pressure on regional governments to comply with budget restrictions simply camouflage for ulterior motives concerning Spain's territorial model?

The voice of calm in moments of deep crisis is normally the prime minister - the person in whom citizens have deposited their trust. And in Spain right now, Mariano Rajoy enjoys an uncommon advantage: he has four years of parliamentary majority ahead of him and a clear political path, circumstances that his European counterparts must envy, given that many of them are facing upcoming, and uncertain, elections. Despite this, the prime minister's image has not been consolidated at home nor abroad during these, his first 100, anxiety-ridden days of power.

People close to the prime minister believe that Rajoy is genuinely surprised by the lack of backing his measures have received in the international markets and by the intense and relentless pressure they are exerting on Spain. Rajoy complains that "some people," especially outside Spain, do not appreciate the unusual strength of his position, and he cannot understand why the Italian prime minister, technocrat Mario Monti, who does not enjoy the same level of political power, is able to instill more confidence than Rajoy.

"I, and this government, can pass whatever austerity measures we feel are called for at any given moment," he bragged to a Socialist politician. And it's true that there are few European governments who could manage to get both personal and value-added tax hikes approved, while simultaneously shaving 10 billion euros from healthcare and education, without causing major tremors in their respective parliaments.

Yet those in the Spanish prime minister's camp are wondering how to stem the rapid loss of popularity he and his government are experiencing - eight percentage points in less than 100 days. It won't be easy, not only due to the harshness of the government's austerity measures, but also because citizens see them as improvised and forced, brought in under the pressure of foreign markets and ratings agencies. They watch baffled as the government says one thing one day and another thing the next, without any plausible explanations from the prime minister that might help convince them that decisions are well-thought-out steps and not just deplorable stop-gap measures.

While all eyes are on the economy, other problems keep popping up

Rajoy's own personality does not do him any favors. The 57-year-old Galician, who has had a long political career, has always preferred ambiguity and little public interaction. He has never bothered to improve his communication skills with citizens nor has he based his leadership on his ability to persuade. Nobody can remember a press conference where Rajoy made more than just a superficial appearance. In essence, he has presented himself as a long-distance runner - one with the ability to govern.

His trademark talent for using indecisiveness to his advantage is floundering in this new setting, one much more difficult than normal in which Spaniards are rejecting uncertainty and demanding reassurance. And it's still too early to even consider a cabinet change that would pave the way for an economic leader who can convey greater strength and leadership than Cristóbal Montoro and Luis de Guindos are able to offer or to turn to the Socialist opposition, which has not yet recovered from its catastrophic electoral defeat.

Given this situation, various members of the Popular Party (PP) are urging the prime minister to put his characteristic remoteness aside and to establish a greater presence - beyond the obligatory and sporadic parliamentary sessions.

"Rajoy is a conservative in the strict sense of the word: he's averse to change, somebody who has always believed that if you don't do anything, you can't do anything wrong. And he has taken over a country in the middle of the worst economic crisis in its democratic history, a situation that requires constant changes from him, and at breakneck speed. This is the opposite of his nature," explains one PP politician who worked alongside the prime minister in the party and who is not optimistic about the chances of him changing his political ways now to bridge the gap with the electorate.

Still, he believes it's unfair to attribute to the prime minister a secret desire to unleash the full extent of the PP's austerity plan on citizens. "On the contrary, Rajoy is constantly saying that he does not like what he is doing at all. He doesn't talk about economic models or trimming Spain down but of a series of separate and unpleasant measures that are necessary in order to move forward. In a way, you could say that he is legitimizing what he is doing."

"While it is true that the austerity measures are not based on some liberal ideological discourse," says a veteran PP deputy with Christian democratic leanings, "the policies that are being passed tend to lean in that direction." He feels that the economic reforms are not so much products of Rajoy's own ideology as they are the result of his desire to provide quick responses to Germany's demands, which the prime minister sees as a way of recovering the confidence he longs for, in addition to the wide berth the prime minister allows his ministers, "many of whom have their own ideological prejudices."

The voice of calm in moments of deep crisis is normally the prime minister

The prime minister's opacity and the difficulty in knowing what he is thinking, as well as what type of social and state model he wants (beyond one that is efficient and economically stable), is the cause of constant confusion. Alarmed by statements made by Madrid premier Esperanza Aguirre, also of the PP, about the sovereignty of regional governments, Rajoy took advantage of his appearance in the Senate to state that he has no intention of redefining Spain's federal system. His brief statement did nothing, however, to stem the countless incursions made by ministers and deputies in this area, especially with regard to the situation in Catalonia.

Overwhelmed by economic issues, the prime minister doesn't seem to be paying a lot of attention to the evolving state of affairs in the northeastern region, where the CiU Catalan nationalists have managed to center debate on the so-called "fiscal pact" (an economic plan similar to the Basque Economic Agreement). Catalans feel that they have become guinea pigs for cuts in social spending, and, according to opinion polls, are increasingly convinced that their difficulties stem from their lack of economic sovereignty.

This push for economic freedom has many experts worried, especially given the weakened state of the Catalan Socialists as an integrating force. The PSC, after failing in its attempt to position Carme Chacón as general secretary of the Socialist party, has some tricky political footwork ahead of it. "They won't even give Carme a glass of water in Madrid," declares a deputy who supported her candidacy. "Neither does she have a role to play in Barcelona, but some people hope she will eventually organize a new platform." The fact that the new PSC secretary, Terrassa mayor Pere Navarro, is not a member of the Catalan parliament makes the regional party's reconsolidation even more precarious, something that deeply concerns them given the possibility of premier Artur Mas moving regional elections ahead to 2013.

Those close to the prime minister say he is "completely absorbed" by economic issues, and that "political" matters are being handled by the deputy prime minister, Soraya Sáenz de Santamaría, who has not yet carved out her own identity within the PP, opting for the time being for an administrative role. This allows her a great deal of power in daily affairs, but limits her influence over the party and its internal trends and movements.

That's why, says a former PP leader, that Javier Arenas, a close confidante of the prime minister's and a skilled negotiator, is likely to come back to Madrid from his role as PP leader in Andalusia. Rajoy wants Arenas close by so he can manage the PP, without this meaning the removal of Dolores de Cospedal from her position as general secretary. Arenas could also control movements within the party, in which to date only one "prime ministerial" candidate has emerged: Alberto Ruiz-Gallardón. "A proposal as ideologically combative as the one he presented in the Justice Ministry is more easily explained in terms of an internal maneuver than an authentic government proposal," says a former PP minister of Gallardón's proposed legal reforms.

He believes that Mariano Rajoy is right in saying that there isn't any other European leader right now with as free a hand as he has. The only upcoming elections that could prove challenging for Rajoy are those in his native Galicia in the spring of 2013. Nor are there any other European leaders who face such a weak opposition party.

Rajoy has always preferred ambiguity and little public interaction

The new government's abysmal start (something openly acknowledged within the PP) has not cost them more political capital because the Socialists have not yet regrouped. Though the Andalusian and Asturian elections killed a bit of the pain for Alfredo Pérez Rubalcaba - who is still somewhat blurry-eyed after the battle for secretary general and the first few regional congresses - the party is still inwardly focused and not yet operating with its full force. Furthermore, the pact in Andalusia with United Left has created more problems than the Socialists will admit, because it reveals what a "leftwing government" is capable of realistically achieving under the current economic circumstances.

For the Socialist and Popular Parties alike, the main concerns are the evolution of the economic situation and the sweeping effects of spontaneous social movements. The PP in particular has been waiting with bated breath for a possible student uprising over steep hikes in university fees and education cuts.

Neither party really wants any type of economic pact, except for maybe a discreet solution to the capital-challenged financial sector. In all other areas, neither the Socialists nor the PP believe there is any benefit in mutual solidarity or in the possibility, at least for now, of steering clear of arguments over basic economic issues. But "the two main parties should be careful," warns sociologist Belén Barreiro, "because right now the PP's loss is not the Socialists' gain, but fodder for smaller parties, as has happened in Greece."

In fact, none of those consulted in the PP or the Socialists even believed in the chance of a cross-party pact that would boost the prestige of embattled Spanish institutions such as the Constitutional Court or the General Council of Judicial Power, let alone the possibility of reaching an agreement on state broadcaster RTVE. Indeed, everything points to months of new confrontations and back-and-forth accusations.

"The Socialist party must focus on its parliamentary life and internal restructuring," says a Socialist deputy. Indeed, parliamentary debate must play a strong role in this government, but the first few sessions have been notable for the exact opposite. "Our current parliament has a lower level than previous ones," various veteran PP and Socialist parliamentarians plainly admit. This was evidenced by the deplorable budgetary debate, which the PP managed to reduce to a mere string of accusations against the previous government while the Socialists were incapable of escaping from the trap.

"We need a lot more gray matter," says one Socialist deputy. Rubalcaba, whom everybody in the Socialist Party believes will be the next candidate for prime minister, given the lack of a credible opponent, is planning three conferences. The first, which will focus on the party's relationship with society, including holding primaries and how to improve relations with supporters and voters, will be organized by party secretary Óscar López. The second, on subjects strictly political, such as the regulation of the monarchy, relations with the Church and the defense of democracy, will be organized by former cabinet minister Ramón Jáuregui.

He believes that if you don't do anything, you can't do anything wrong"

The organization of the third, which will not be held until after elections in Germany and which will be given over to economic policy, has not yet been assigned to anybody. This could be because Rubalcaba has not yet decided if he wants to have a strong economic advisor, who can lead the debate over the next few months, or if he, like Rajoy, will take on that role himself. Many Socialists prefer the designation of an economic spokesperson as they fear Rajoy's silence may be passed onto Rubalcaba or, in the best of the two cases, that their secretary general may become entrapped in a never-ending debate with the sector's two ministers.