Surprisingly after last March's national elections it was the winners -- the Partido socialista (PSOE)-- who appeared to be in disarray, while the losers -- the Partido popular (PP)-- were finally gaining strength. For the first time ever in his political career, PP president Mariano Rajoy got a higher public approval rating than José Luis Rodríguez Zapatero, PSOE party leader and president of the government. But the parties' relative positions continue to shift, in interesting ways. For the next four years I expect to see a much more plural politics, where the governing PSOE will need more tactical alliances with other parties, including possibly the PP, in order to get any legislation through.
During the last legislature (2004-2008), the economy was booming and the PSOE government introduced reforms that had wide popular support. (Gay marriage, gender parity in business and government, benefits for families taking care of disabled members, etc.) Meanwhile, the opposition PP was making itself obnoxious and even frightening, taking extreme right-wing positions based on a rhetoric of obvious falsehoods (wild conspiracy theories to explain their 2004 loss). Thus the other parties (Izquierda Unida and the generally left-leaning regionalists and nationalists) almost always voted with the PSOE, giving it an effective majority.
Now the economy is in what the government has finally admitted is a "crisis": the collapse of housing construction and sales has caused record unemployment and business failures, at the same time that rocketing petroleum prices are bankrupting truckers and making everything more costly, and the two forces together are diminishing government revenue (tax collection) and increasing expenses (to cover the unemployed, etc.) The government had a nice surplus in March, but was unprepared for a recession of this magnitude and for months seemed to have no answer except to counsel patience, that things would get better -- but now it doesn't look like they will any time soon, and the "kitty" is fast emptying. Thus, the PSOE needs the support of the other parties more than ever, and has to work harder and make more concessions to keep its alliances.
Meanwhile PP leader Mariano Rajoy surprised everybody by using his defeat to clean house and move to the center, making the PP a much less frightening alternative. Most commentators expected Rajoy to be much weakened after his defeat in March, and possibly even to be replaced. Instead, at the recent party congress in Valencia he not only got himself re-elected, but also replaced the hard-liners (Acebes and Zaplana, most notably) with a new cast of attractive and skillful younger women, and declared over and over again that his was a party of the "center", even distancing himself from his predecessor and former patron, the truly scary and cynical José María Aznar.
But in the PP the "center" is precarious; the right-wingers are still powerful in Madrid and other regions and will keep pushing to defend what Aznar calls the party's "principles" -- a collection of prejudices including alignment with the Catholic Church hierarchy, hostility to immigrants, and defense of private profit over public welfare (e.g., money and other breaks for private hospitals and schools while the public ones are starved for funds).
Meanwhile, at the PSOE's own party congress, the leadership has been forced by their own militants to edge backwards, resisting every step, toward the left. The main issues are women's rights, especially a uniform abortion law, and real separation of Church and State -- which is what the Constitution proclaims, but in fact Spanish taxpayers are still paying the Bishops' Conference €153,100,000 for salaries of Catholic bishops and priests, plus the salaries of the Church's own religion teachers in public schools, Catholic chaplains in the Armed Forces, and much more -- all as a result of Church-State accords signed in 1979. The PSOE leadership now says that they will try to get rid of the crucifixes in state ceremonies, but at least for now won't seek to revise those 1979 accords. But they may be forced by their own party members and other parties to move farther.
Where the PSOE is taking anything but a progressive stance is on immigration. The government is going along with the new European Union rules, permitting detention of undocumented immigrants for up to 18 months, even if they have committed no infraction other than illegal entry. The government is facing a lot of criticism for this from its own partisans and from its usual allies on the left, but the international pressures (Sarkozy et al.) for the moment seem to be stronger.
Image: Two PP women, Madrid region president Esperanza Aguirre and María Dolores Cospedal, Rajoy's pick as General Secretary of the party, in a 2007 photo; as representatives of opposing tendencies, they may not be so cozy now. Photo from Stralunato.