The
2008 general election brought a second consecutive victory for the
Spanish Socialist Workers' Party (PSOE) which won 169 (just seven short of an
overall majority). Declining to form a
coalition or seek
confidence and supply agreements with smaller parties,
José Luis Rodríguez Zapatero was re-elected as
prime minister of Spain on the second ballot of
investiture and went on to form the going on to form the
first female-majority cabinet in
Spain's history. By then, however, the
Spanish economy was already showing signs of fatigue and slowing after a decade of growth. The defeat of the opposition
People's Party (PP) led some internal factions and conservative media to question
Mariano Rajoy's leadership. After fending off a challenge from the
Madrilenian president,
Esperanza Aguirre, Rajoy was re-elected at the
July 2008 PP congress, but the internal crisis continued for months amid several
political scandals. In early 2009,
El País revealed an alleged plot by the
Madrid regional government to
spy on Aguirre's political rivals. Soon after, the
National Court of Spain opened a judicial probe into the
Gürtel case, which implicated the PP—especially its
Madrid and
Valencia branches—in a
bribery,
money laundering, and
tax evasion scheme. Investigations were delayed due to the
examining magistrate,
Baltasar Garzón, being tried for violating
lawyer-client privilege through
wiretapping, while criticism over a hunting trip with him led formed
justice minister Mariano Fernández Bermejo to resign. The PP victories in the
2009 Galician and
European Parliament elections helped reassert Rajoy's authority within his party amid voters' growing economic concerns. caused a
real estate crisis. This made Spain one of the countries hardest hit by the
Great Recession, leading to an increase in
unemployment and a ballooning
budget deficit. The impact of the
Great Recession in Spain dominated Zapatero's second term, with early criticism focused on his delay in acknowledging the crisis and acting sooner. Worsening
forecasts and rising
fuel prices pushed the government to approve a first
stimulus package based on
tax rebates and the removal of the
wealth tax, while a
truck drivers' strike erupted in June 2008. The crash of the
Spanish property bubble triggered a
real estate crisis, and the July 2008
bankruptcy of
Martinsa-Fadesa in July 2008 became Spain's largest corporate
default. A second stimulus package followed in August, including further
tax deductions, the opening up of the
services sector,
red tape cuts for
small and medium enterprises (SMEs), and simplified
environmental plan requirements. The
bankruptcy of Lehman Brothers in September deepened the
global financial crisis and caused historic losses for the
Madrid Stock Exchange. By the end of 2008 Spain had entered
recession, with
inflation and
unemployment rising sharply. The
Spanish government's €50-billion "Plan E"
public works program failed to meet its goals and drew criticism for unsustainable spending. A
banking crisis forced the state to bailout several failing
savings banks, with the
FROB being established to manage
restructuring. In 2009,
economy and finance minister Pedro Solbes was replaced by
Elena Salgado, and further
austerity measures—including tax hikes (such as a rise in the
VAT) and cuts in non-essential spending—were introduced to contain the growing
public deficit. Zapatero's government initially tried to avoid cutting
social security and
welfare state policies. However, a ballooning deficit, unemployment levels unseen since the
1993 crisis, and fears of
contagion from the
Greek government-debt crisis (which threatened a
euro area crisis), forced a change of course. On 12 May 2010, Zapatero announced emergency measures aimed at preventing a possible
default and
bailout, including cuts to
civil servants' wages and
dependency spending, a
pension freeze and the removal of
birth allowances. A
labour reform followed, introducing
incentives to youth employment, decentralizing of
collective bargaining, and reducing
severance payments for
layoffs. These
U-turns caused
approval ratings for both Zapatero and the PSOE to collapse, and a
general strike was called against the reforms. Zapatero attempted to regain political initiative with a major
cabinet reshuffle in October 2010, but his government had to deal with an
air traffic controllers' strike in December, which led to a
state of alarm (the first since the
Spanish transition to democracy). Rising
bond yields and threats to Spain's
credit ratings prompted further measures, including the partial privatizations of
AENA and the
State Lotteries, higher
tobacco taxes, limits on
unemployment benefits, and a tax cut for SMEs. A
pension reform saw the compulsory
retirement age rising from 65 to 67 years. Growing discontent with austerity culminated in the
15-M Movement in May 2011, also known as "the indignant ones" (), which would spark
protests,
demonstrations and
occupations in Spain in the ensuing years. square in
Madrid (depicted here on 20 May 2011) became a focal point and a symbol during the
anti-austerity protests in Spain. Domestically, the government also faced public outrage after the hijacking of the fishing trawler
Alakrana to
piracy off the coast of Somalia in October 2009. It approved a new
abortion law based on a time limits-scheme (allowing abortion without conditions up to the 14th week and up to the 22nd week in cases of
pregnancy complications), while also removing
parental consent for minors aged 16–17. During this period, the government passed a new regional financing model, a
sustainable economy law (which included the controversial
Sinde Law on internet
copyright infringements), and a major
Criminal Code reform that introduced harsher penalties for
terrorism,
sex crimes and real-estate corruption. In 2010, a
Constitutional Court ruling that curtailed the
Catalan Statute of Autonomy—following a PP
appeal—sparked
protests in the region, fueling a
sovereigntist movement and, ultimately,
pro-independence sentiment. Economic hardship also contributed to the fall of the
tripartite government in the
2010 Catalan election and the victory of
Convergence and Union under
Artur Mas. The
activity of the
ETA group saw an attack on the
EITB offices in 2008, and the
Burgos and
Palma Nova bombings in 2009, although police operations dealt severe blows to the group's capabilities. ETA's first murder of a French policeman in March 2010 also became its last, as the organization announced a ceasefire in September 2010, declaring it permanent in January 2011. A judicial investigation uncovered a tip-off during the
2006 ceasefire that had delayed the dismantling of an ETA extortion network (the so-called Faisán case); the opposition PP tried to link the case to the
interior minister,
Alfredo Pérez Rubalcaba, but only two police officers were ultimately tried and convicted. Concurrently, the
Supreme and the Constitutional courts banned
several parties with alleged ties to ETA and the outlawed
Batasuna, including the
Communist Party of the Basque Homelands; the
Basque Nationalist Action, several groups formed to contest the
2009 Basque election (
D3M and
Askatasuna), as well as
Sortu in March 2011. The Constitutional Court allowed the
abertzale left to contest the
2011 local elections under the
Bildu banner, which achieved a major electoral breakthrough. On 2 April 2011, Zapatero announced that he would not seek a third term as prime minister, but his initial plan to hold a
party primary to choose a successor was scrapped following the PSOE's heavy defeats in the 2011 local and
regional elections.
Defence minister and likely contender
Carme Chacón withdrew from the race in favour of Rubalcaba, who became the party's prime ministerial candidate unopposed. The final months of Zapatero's term were marked by a
constitutional reform in the summer of 2011 introducing a
balanced budget amendment, and by his decision to bring forward the general election to 20 November in response to mounting political and economic pressure. ==Overview==