In the December 20 general elections, the ruling Popular Party (PP) obtained 28.7% of the vote, 123 seats in Congress. The Socialist Party (PSOE) came in second with 22.2% and 90 seats, followed closely by Podemos, which obtained 20.6% and 69 seats. The right-wing Ciudadanos party came in fourth with 13.9% of the vote.

Being the first general elections for the two new political forces—Podemos and Ciudadanos— their results were not bad at all, particularly for Podemos, whose leader Pablo Iglesias claimed they would have beat out the PSOE with another week of campaigning.

The first observation is that the new political forces grew at the expense of the two traditional parties, the PSOE and PP. In 2011, the PP and PSOE together garnered 296 seats in parliament with 73.3% of the vote. This time around, the two parties together only achieved 213 seats and 50.7% of the vote. This is a sign of the profound crisis in which the two-party political regime, in place since 1978, finds itself. Furthermore, Podemos won the most votes in Catalonia and the Basque Country, and second most in important districts like Madrid, Galicia and Valencia–making a decent recovery from its lacklustre performance in the local elections that took place earlier in 2015.

At the national level, the results mark a leftward shift of the electorate, despite the fact that Podemos has moderated its discourse considerably over the last few months. The fall of the traditional parties has been capitalized on most of all by Podemos. Despite the announced death of the formation, Podemos is alive and kicking. Not so bright was the performance of Ciudadanos, a new, hipper and younger (than the PP) right-wing party, obtaining only 40 seats.

Another take-away of the postelectoral scenario is the prominence of the Catalan question. The forces favoring a call for a referendum in Catalonia obtained 29 representatives (and 56% of the votes in the region). Some of those forces formed the coalition En Comú Podem, the electoral front advanced by Podemos in Catalonia. This is one of the reasons for Podemos’ recovery and also why Pablo Iglesias came out publicly in defense of the referendum in Catalonia the day after the elections.

Game of thrones

As happens in all parliamentary systems, the presidential candidates need to garner an absolute majority of votes in parliament—in the case of Spain, a minimum of 176 seats—in order to form a government.

The landscape following the elections leaves no force capable of doing that. Furthermore, it is likely that a coalition of at least 3 parties will be necessary to elect a president. International parallels help shed light on the possible outcomes.

A coalition of the PP and Ciudadanos–which would be the most natural match—does not reach the needed quorum. Thus, the PP has been putting pressure on the PSOE to form a “Grand Coalition” that resembles the German partnership between the SPD and CDU, in office since 2005.

However, with Spain having much more in common with Greece than Germany, the recent experience of the “socialist” PASOK has weighed heavily on the PSOE; after forming a coalition with the center-right New Democracy party, PASOK plunged into complete electoral bankruptcy.

A coalition with the PP would be extremely unpopular for the more progressive base of the PSOE. Such an alliance would be a materialization in office of the “political caste,” as they have been called by progressive forces since the 2011 anti-austerity movement and by Podemos leaders and Pablo Iglesias in particular. Thus, this option was ruled out by PSOE’s leader Pedro Sánchez.

However, the rhetoric against the “caste” seems to refer no longer to PSOE politicians when coming from Iglesias. In effect, the most likely coalition today is one between PSOE and Podemos, including IU (Izquierda Unida, a rehashed coalition of the old Spanish Community Party) and the national pro-independence groups of Catalonia and the Basque Country. The leader of Podemos has pointed out that “there are two PSOEs, one that is with the PP, and another one that wants to move forward.”

The greatest sticking point is the Catalan right to self-determination. Pablo Iglesias has asserted that he will not back down from the demand of a referendum for Catalonia, whereas PSOE leaders have consistently opposed this option. Podemos could resolve the dilemma by proposing a more nuanced alternative to the referendum, but the cost they would pay for this is too high. PSOE, on the other hand, one of the two main guardians of Spanish national unity, will find it hard to concede a referendum to Catalonia without eliciting strong internal resistance from the traditional elements of the party. However, the cost not to sign an agreement is probably bigger: in case of a second electoral round, the prospects are dire for the PSOE, which experiences a constant drain of voters to Podemos.

The ’78 regime, the caste and Podemos’ swerve to the center

After the Spanish dictator Francisco Franco died in 1975, the monarchy with the support of the major political parties of the time (including the PSOE and the Spanish Communist Party) led the “transition” to a (monarchic) constitutional democracy. A new constitution was crafted and the resulting agreement became known as the ‘78 regime. The deal included: maintaining the Crown; impunity for all army officials responsible for the genocide in which over 130,000 people had been slaughtered during the 40-year-long dictatorship; the subordination of all nations within Spanish territory to the Federal State, including Basque Country and Catalonia; and an anti-democratic electoral system where large parties are strongly favored and small forces are underrepresented.

During the ‘80s and ‘90s, the PSOE and the PP alternated in power and carried out the austerity policies demanded by the IMF and, more recently, the Troika. The center-right as well as the “Socialists” adopted the motto, “There is no alternative”. In 2007 the economic crisis hit the Spanish economy hard, after the housing bubble burst.

This was the run-up to the greatest popular mobilization in the country’s recent history: the indignados movement. Massive demonstrations flooded the streets and occupied squares, demanding an end to austerity and foreclosures, down with the two-party (PP-PSOE) system, for more participatory democracy, and for reforms of the electoral law. It is safe to say that out of this popular outrage and the rejection of TINA, Podemos (“We can”) was born.

After only 2 years since its formation and first electoral attempt, Podemos has ostensibly moved to the center, and has traded their anti-system rhetoric for a more institutionally acceptable image. From praising the ’78 agreement as a “step forward towards democracy” to asserting that “there is no other alternative than the market economy”, the misery of what’s feasible (that is, within hands’ reach) has replaced its radical discourse. A pact with the caste of the PSOE will be just one more step in the institutionalization of the party.

A broad left coalition “à la Portuguese”?

This past Wednesday, Pedro Sánchez, head of the PSOE, travelled to Portugal to meet with Prime Minister and leader of the Socialist Party (SP) of Portugal, Antonio Costa. The encounter was not accidental: the SP in Portugal managed to convene a broad coalition with the Communist Party and the Left Bloc to form a “progressive” government of the broad left. In this way, they managed to push conservative Prime Minister Passos Coelho out of government.

It was a clear signal of open dialogue toward Podemos and IU. The national leader of IU, Alberto Garzón, is already on board with such an alliance, and the friendly attitude of Pablo Iglesias vis à vis the “progressive” elements within the –once “caste”— PSOE opens the possibility of a broad coalition to oust Mariano Rajoy and the PP. As Podemos drifts to the center and becomes a more “reliable” option, the logic of the “lesser evil” gains momentum.

On January 13, the Spanish Congress will open session and a vote will take place. If there is no absolute majority to nominate a president, there will be new elections in two months. This time, the president will be elected by plurality vote (the party or coalition with the most votes wins, even without reaching half the seats in Congress). Amidst political uncertainty, one thing is clear: the two-party system that has ruled for almost 4 decades is in its death agony.