Business&Finance: A new Partido Té?

A new Partido Té?

By shifting to the right, Spain’s prime minister risks losing votes to the centre

UNEMPLOYMENT is sky-high and growth is at best anaemic. Yet Spain’s prime minister, Mariano Rajoy, has at last seen off his country’s worst recession in decades, and can now start thinking about how best to recover lost votes before the general election that is due late next year. So why is he kicking things off by proposing a bill sharply to restrict abortion, an idea that is opposed by the vast majority of Spaniards?

The abortion bill, passed through cabinet during the Christmas period, is a reminder that, although Mr Rajoy's Popular Party (PP) claims to be liberal on economic issues, it is socially conservative. The bill would replace a woman’s right to abortion on demand during the first 14 weeks of pregnancy with a system requiring proof of potential damage to a mother’s mental or physical health. Four out of five Spaniards dislike the proposal. Even most PP voters think it unnecessary. And it comes with another new piece of legislation, a law-and-order bill giving the police extraordinary powers to fine people who are deemed to have insulted them, Spain or their local town halls. Fines for these last two can reach €30,000.

José Pablo Ferrándiz of Metroscopia, a pollster, says that PP voters see themselves as more moderate than their party. The abortion law may please half a million diehard conservative voters, but it will cost votes in the centre where elections are won—and the upstart Union for Progress and Democracy (UPyD) is growing fast. The abortion bill is a gift to the opposition Socialists, boosting their otherwise lacklustre performance in the polls. It may give the party the lift it needs to win European elections in May. Many PP bigwigs know that, and are angry that Mr Rajoy has dusted off an election pledge to “reinforce protection of the right to life” and turned it into a hard-hitting proposed law.

A party that occupies most of the spectrum to the right of centre is bound to have internal conflicts. Mr Rajoy’s most vocal critics are social conservatives and those on the right who see tax rises as a sell-out. Jaime Mayor Oreja, a conservative former interior minister, has declined to lead the PP into the next European elections. Alejo Vidal-Quadras, a former party boss in Catalonia and now vice-president of the European Parliament, has also quit.

He has joined the newly created Vox, a Spanish-style Tea Party backed by PP malcontents who think Mr Rajoy has gone soft and betrayed the party’s liberal economic principles. They accuse him of tinkering rather than unleashing radical reforms to cut the regions’ powers, slim the administration and squash separatist sentiment in Catalonia and the Basque country. Jorge San Miguel, an analyst at the Politikon blog, says Vox may have trouble winning parliamentary seats, but can still damage the PP by splitting off some of its voters.

Prominent among Mr Rajoy’s critics is a former PP prime minister, José María Aznar. He stayed away from a recent PP convention, even though he is honorary president. Esperanza Aguirre, the Madrid party boss, is leading criticism of tax rises as the government struggles with a budget deficit that some say was still stuck at 7% of GDP last year. Ms Aguirre, an on-off rival of Mr Rajoy, says lower rates would boost tax revenue and accuses the budget minister, Cristóbal Montoro, of behaving like a social democrat.

Mr Rajoy has pledged to cut taxes next year. But loopholes and cheating mean that even high nominal rates still do not produce enough income. The top income-tax rate in the cash-strapped north-eastern region of Catalonia is 56%, one of the world’s highest, according to KPMG, a consulting firm. Yet Spain’s income from tax and social contributions is well below the EU average. Fiscal reform will have to be far-reaching if Mr Rajoy is to balance the books.

The economy, along with 26% unemployment, remains Spaniards’ chief worry. If Mr Rajoy concentrated on that, he could yet beat the Socialists in the European elections. Going backwards on abortion can only damage his party’s chances.