When the deal with Greece was announced a little over a week ago, we noted that Euroskeptic parties across the continent were girding for a fight, eager to capitalize on Greece’s apparent humiliation at the hands of an overweening Brussels intent on forcing austerity on a periphery. So how is the fight going?Portugal yesterday announced that general elections will be held on October 4th. The country’s center-right ruling coalition, which has implemented strict austerity measures as part of its 2011 €78 billion bailout, and which has presided over a grueling recession and high unemployment, has managed to close the gap on the country’s Socialists, who have been campaigning against austerity. The messaging from Prime Minister Pedro Passos Coelho has been clear: Syriza led Greece to catastrophe, and our policies, while painful, are working. The two parties now stand neck-and-neck in the polls.Portugal, however, does not have a truly radical Euroskeptic party contending in the elections: the Socialists disagree on the degree to which austerity should be applied, but are not setting themselves up as a cousin party to Syriza. In neighboring Spain, however, where an election is slated for November, Syriza-allied Podemos had lately been on a tear, most recently making big strides in local elections. However, in the wake of the Greek crisis, it seems to have suffered a setback in the polls: As of this weekend, the center-right People’s Party had 29.1 percent, the mainstream opposition socialists had 25.1 percent, and Podemos was polling at only 15 percent.Part of the reason is surely Syriza’s debacle in Greece. But part of it, too, is that the economic situation appears to be improving in Spain. Bloomberg:
Spanish unemployment fell to the lowest level in almost four years in the second quarter, adding to expectations that stronger growth is translating into faster job creation.The jobless rate dropped to 22.4 percent from 23.8 percent in the previous quarter, the National Statistics Institute said in Madrid on Thursday. That is in line with a Bloomberg News survey of 11 economists that called for a decline to 22.5 percent […][Prime Minister Mariano] Rajoy’s government has raised its growth forecast for this year to 3.3 percent from 2.9 percent in April, putting the euro area’s fourth-largest economy on track to outpace its peers. The government foresees 3 percent expansion in 2016.
Rajoy has been celebrating on Twitter, saying that “Four years ago they told us that it was impossible to stop the destruction of employment during a recession. And we did it.”Of course, much can change between now and November. For one thing, the Greek crisis may not be over yet. Polling in Germany shows that public opinion is still quite hostile to proceeding with a third Greek bailout: 56 percent are opposed, and only 33 percent are in favor. Though the Greek parliament passed its second round of reforms early this morning, negotiations over the terms of the bailout with its European creditors may prove more difficult than expected, and if it looks like the Greeks are getting the short end of the stick, Euroskeptic parties across the continent could get another boost.But for now, at least, they don’t appear to have the winds at their backs.