How Madrid Became the Laboratory for Spanish Thatcherism

Over its 25-year rule in Madrid, the right-wing Partido Popular has given rise to vast webs of corruption, widespread privatizations, and a disastrous mishandling of COVID-19. But its Thatcherite revolution has also forged a new voter base loyal to the ruling party — meaning predictions of imminent collapse are likely premature.

President of the Community of Madrid from 2003 to 2012, the self-described “Iron Lady” Esperanza Aguirre (center) kept her friends in high places and her enemies on edge. (Wikimedia Commons)

An epicenter of the COVID-19 crisis, the Community of Madrid has been the single Spanish region hit hardest by the pandemic. Today, the regional government faces the fallout from a nursing home scandal that saw at least six thousand sick elderly residents refused hospital treatment, abandoned, and left to die alone without care.

This owed much to the disastrous record of the Partido Popular (PP), the conservative party which has been in power in the Madrid region for some twenty-five years. The PP’s policies, heavily weighted toward privatization, left Madrid’s public health care system ill-equipped to battle the most severe humanitarian crisis to hit the country since the 1936 Civil War.

Some observers have speculated that the PP’s mishandling of the coronavirus crisis in the Community of Madrid may threaten its quarter-century dominance of the region’s politics. Yet a closer look at the bases of PP control — and the electorate it has created through its Thatcherite measures — offers rather less reason for optimism.

A Community Divided

The Partido Popular took control of the Madrid regional government on June 28, 1995, ending the twelve-year reign of the Socialist Party (PSOE). Since that point, Spain’s third-largest autonomous community (behind Andalusia and Catalonia) has become what it proudly calls the country’s “economic engine.” Its growth owes to a prosperous services sector, particularly in areas such as finance, real estate, and IT and telecommunications, as well as steady growth in the construction sector.  This has been a key reason for PP’s longevity.

Not everyone has benefitted from the boom. According to the latest INE statistics, in 2018, just under half of the region’s 6.6 million population — the equivalent of the entire population of the city of Madrid — struggled to reach the end of the month. That was before a global pandemic brought Madrid to its knees. The gig economy has left thousands of families in a precarious position; and amid the mounting recession, things are not going to improve anytime soon.

Spain is a decentralized state, and its seventeen regional governments, or autonomous communities, enjoy control over areas such as health and education, as well as fiscal policies. This helps explain the Madrid we have today; according to El País, it “is the portrait of a region as rich as it is unequal, still unbalanced between north and south, and in which privatization continues to gain ground on public institutions.”

The PP heartland centers around the northern districts of the capital like Chamartín, Chamberí, and Salamanca, as well as wealthy suburban towns to the west like Las Rozas, Majadahonda, and Boadilla del Monte. Despite gains the Right has made in recent years, the southern parts of Madrid and of the wider Community remain Socialist strongholds.

Under this system of regional control, the Community of Madrid is the single region where the wealthiest have grown most detached from the daily realities of the majority. “In Spain there is a lot of discussion about Catalan independence, but those who have become independent are the rich; they live as if they were from a small country within Spain,” said Íñigo Errejón, leader of the political party Más País, in a recent interview.

This arrogance was apparent during Spain’s strict lockdown, as residents of the wealthy Salamanca neighborhood took to the streets, out of ire at being mandated to follow the same lockdown measures as everyone else. Those at the other end of the economic ladder also gathered in huge numbers — to queue for meals at Madrid’s food banks.

Lucky Generals

It’s said that one of the first characteristics Napoleon would look for in a new general was luck, often asking: “Is he lucky?” He would have loved the generals at the head of Madrid’s PP, though perhaps more than just “luck” has helped them out.

Since coming to power in 1995, four of the PP’s six presidents in Madrid have faced legal battles and a string of damaging corruption cases. Yet, time and again, the PP has found a way to wriggle off the hook.

As growth in the region continued to soar, the PP’s middle-class electorate went to the polls with bright prospects and pesetas, then euros, in their pockets. The questions about where the money came from could wait. The gravy train wasn’t slowing down.

But the PP has also been helped by the ineptitude of their bitter rivals in the PSOE. “Throughout this time, the PSOE hasn’t got it right in Madrid. The opposition here has always been very soft,” explains Luis Ángel Sanz, political correspondent at the center-right daily El Mundo.

Pablo Simón, political scientist and regular contributor to the national broadcaster RTVE, agrees. “The Socialist Party in Madrid doesn’t work,” he says, citing their own share of scandals and internal strife based on family loyalties.

On June 30, 2003, the PSOE had its opportunity. Given the tumbling popularity of right-wing prime minister José María Aznar, the PSOE’s Rafael Simancas looked set to become president of the Madrid Community, finally breaking PP dominance. But then came the incident that would become known as the “Tamayazo.” After regional elections in which the PSOE and United Left edged out the PP by fifty-six seats to fifty-five, two Socialists — Eduardo Tamayo and María Teresa Sáez — failed to appear at the final round of voting for the new administration, thus denying Simancas the votes that would have seen him wrest power back from the Right. After the shock of this vote, phone records emerged showing that Tamayo had been in contact with businessmen closely linked to the PP. In the repeat elections, PP’s Esperanza Aguirre emerged with an absolute majority — setting the scene for a new Spanish Thatcher.

The Iron Lady

Trumpian in her confrontational and scathing approach to opponents and detractors, Aguirre is the embodiment of classical conservatism. A student at the British Institute in Madrid and an avid anglophile, as regional president from 2003 to 2012 the self-described “Iron Lady” Aguirre kept her friends in high places and her enemies on edge.

“From the first minute of her mandate, Aguirre deployed a strategy whose sole objective was to control all power,” writes El Diario’s Marcos Pinheiro. “With the internal control of the party, Aguirre dedicated herself to guarantee this power by placing her relatives in councils and public companies, including the regional television, which sang her praise in the news.”

I asked Pablo Simón whether the comparisons with her idol Margaret Thatcher were accurate. “She would be delighted you even asked that question,” he replied.

In an El Mundo feature titled “Margaret Aguirre, Esperanza Thatcher,” Lorena Maldonado writes: “She invoked the iron female myth of blonde hair and lacquer, and set out on the romantic embrace of British conservatism: she claims to identify ‘in every way’ with Margaret Thatcher and to be ‘a great admirer’ of her figure.”

Aguirre eventually left the political stage, citing health reasons, but Thatcher’s legacy still very much lives on in Madrid: we have Plaza Margaret Thatcher in the swanky Serrano district close to the PP’s headquarters, as well as the CEIP Margaret Thatcher public elementary school in Barajas, a five-minute drive from the airport.

As the high-rise apartments and office blocks continued to stack up on the Madrid skyline, so too did the scandals. The so-called Púnica and Lezo cases further fed Madrid’s corruption folklore and, in 2018, PP regional president Cristina Cifuentes was forced to resign over a scandal involving the fraudulent granting of a master’s degree and a shoplifting incident.

Spanish Watergate

Such corruption was hardly limited to this one incident. Even bigger shock waves rippled through Spain’s political system when PP prime minister Mariano Rajoy became the first Spanish premier to be called to trial, as a witness in the so-called Gürtel affair. Known as “Spain’s Watergate,” the Gürtel case took over seven years to get to court, but it was worth the wait.

Historian Paul Preston’s book, A People Betrayed, explains how, “Through its use of a parallel accounting system, in return for public contracts, commissions from commercial companies were used to fund the [PP] and enrich individual members.” The case signaled the end for Rajoy, who lost a confidence vote, and his role as prime minister, on June 1, 2018.

Preston details how, during Rajoy’s vote of no confidence, Irene Moreno of the radical-left Unidas Podemos listed sixty major corruption cases. It was a landmark case, as the PP became the first national party organization to be convicted of corruption.

Despite these travails, the PP has held onto power in Madrid. Like most observers, PSOE deputy Modesto Nolla is perplexed: “Personally, I find it difficult to understand that the degree of corruption incurred by the PP governments has not weighed heavily enough among the population; I find it difficult to accept.”

Get Rich Quick

Yet there are other reasons why the PP enjoys such support in this region. As the PSOE’s own working-class base dwindled in the early 1990s, upon coming to power in 1995 the PP immediately set about building up support in the cinturón rojo — the red belt. Traditionally a Socialist stronghold in the southern part of Madrid, this metropolitan area of 1.32 million people includes smaller cities such as Alcorcón, Getafe, and Leganés.

Key here was the Metrosur project, rapidly developing an underground rail system that connected many of the growing sleeper towns surrounding the capital. This proved to be a masterstroke on the PP’s part.

“The rise of PP coincided with the era of the housing bubble and the powerful economic growth that occurred in the 1990s,” says El Mundo’s Luis Ángel Sanz. “This allowed those PP regional governments, then presided over by Alberto Ruiz-Gallardón, to invest millions in extending the public transport network, especially the metro.”

At the turn of the millennium, the Madrid region had seventy-five hospitals in total, but by 2008 that number had risen to eighty-seven. Over 200 km of metro lines were added, and employment figures continued to climb. “A decade of continuous growth meant there were jobs for all,” said Giles Tremlett in Ghosts of Spain, the defining book on modern-day Spain. Between 1999 and 2007, two-thirds of the properties built in Europe were built in Spain.

In El Diario, Sandra León, a political scientist at Madrid’s Carlos III University, explains that PP policy during this period has mostly been defined by tax cuts and “a model of health and education where private intervention played a huge role.” She points out the consequences of these policies for schooling: Madrid has the second-highest rate of school segregation in Europe. “The rich kids with the rich kids. The poor kids with the poor kids,” says Cadena SER’s Laura Gutiérrez.

What chance does any society have of promoting and embracing diversity, when economic lines are so clearly drawn from such a young age?

Yet the PP is untamed in its promotion of private business over all other considerations. Before the coronavirus pandemic brought all economic activity in the region to a halt, 450 new companies set up operations in Madrid in the first quarter of 2020, compared to 126 in Catalonia. The other sixteen autonomous communities have become increasingly disgruntled, accusing the capital of fiscal dumping and of becoming a tax haven for multinationals.

Such an agenda has been openly embraced by Isabel Díaz Ayuso, who became the latest PP president of the region in August 2019. Described by Ignacio Sánchez-Cuenca in La Vanguardia as “the most advanced disciple of Trumpism in Spain,” upon reaching office in August 2019, she  announced: “In the next four years, we are going to carry out the biggest tax cuts in the history of the Community of Madrid.”

Her Trumpism extends to a light-touch approach to the private construction industry. As Madrid now begins the road to recovery in the wake of COVID-19, Díaz Ayuso declared: “Housing is going to be the motor of the recovery.” Without consulting the opposition she announced that more than one million square meters of public land will be released to private developers.

Madrid needed a system of planning and development that served the common good. What it got was another invitation for speculation, a get-rich-quick scheme for investors, while the region battles a housing crisis.

A Madrileño State of Mind?

Nowhere else in Spain could a party have withstood such a level of incompetence and greed. But why Madrid?

Matthew Kennington, an English teacher who has lived in the Spanish capital for twenty years, says the answer is simple. “They truly represent their people. Madrileños have a reputation for having a certain swagger or cockiness which at times comes across as arrogance. Sometimes you hear people almost applaud corruption like a virtue. Perhaps people can identify with a corrupt politician.”

Political science professor Angel Valencia says that “Since Esperanza Aguirre became president thanks to the Tamayazo incident, nothing seems to surprise the people of Madrid anymore.”

The swagger Matthew refers to is widely known in Spain as “chulería madrileña.” In an interview with El Mundo, Rita Maestre, a member of Madrid City Council, argues that such cockiness has created a mindset that “Spain is divided between the capital and the provinces.”

For Íñigo Errejón, “There is a part of the Madrid oligarchy that feels like they are not just anyone. The right wing believes that power is based on surnames, as if it were a birthright. It’s a very Madrid syndrome and not representative of the whole country.”

Ignacio Sánchez-Cuena of the Catalan-based daily La Vanguardia believes that Madrid is a relative outlier in terms of capital cities across Western Europe. London, Paris, Berlin, and Brussels have long been viewed as bastions of diversity and progressive thinking, but the substantial vote in Madrid for the far-right Vox (16 percent) bucks this trend. “The capital city is today the epicenter of an uncultured and exclusionary Spanish nationalism,” he says. “With the security and arrogance that economic well-being produces, the dominant discourse of the right wing in Madrid states that the capital represents modernity and globalization, as well as a proud, liberal, universalist Spain.”

In May 2019, despite winning the overall local city election, the progressive Manuela Carmena was ousted as Madrid city mayor, as a tri-party, right-wing coalition instead took office. She had aligned herself to Más País, a left-wing party formed by Podemos exiles, with strong green values. While it focused on using Errejón’s sway in the capital to become a rising force in the wider Spanish political landscape, Carmena’s defeat was a body blow to the Madrid left as a whole.

Indeed, having ousted Carmena the city’s new governors immediately set about to reverse the good work done to make Madrid a more spacious and greener city. Regional president Díaz Ayuso aimed to justify her archaic strategy to make Madrid great again by claiming that “traffic jams are a symbol of Madrid identity.”

The New Madrid

The fabric of Madrid is changing. Its population grew by almost half a million between 2010 and 2018, and many citizens of more left-leaning parts of Spain have finally begun to change their voting residence to the capital, in order to take advantage of more favorable tax conditions.

It is now estimated that close to a quarter of Madrid’s current population was born outside Spain. It seems likely that the influx of new beliefs, religions, and political viewpoints will slowly begin to erode the PP’s stranglehold on power.

In 2015, the PP lost its absolute majority and had to make a pact with the center-right Citizens party to maintain power in the region. In 2019, it lost a Madrid regional election for the first time since 1989, but a coalition including Citizens and Vox ensured Pablo Casado’s PP returned to the throne. Since 2011, the PP’s vote tally has been slashed by more than half, from 1.5 million to 720,000. Its number of seats in the Madrid Assembly has fallen from seventy-two to thirty.

Political scientist Sandra León explains how “They are based on such powerful political capital that, although it may be eroded, they can still gather enough strength to form a coalition government.”

The latest polls reveal that, despite the health care cuts and the shambolic handling of the care home crisis, the PP’s popularity in Madrid is actually on the up. If an election were held tomorrow, they would be set to win forty-three seats.

Yet the broader coalition centered on the party now looks fragile. The COVID-19 nursing home debacle has sparked fierce tension between the PP and Citizens, threatening an open split. The fallout of this crisis and Citizens’ pivot back toward the center — coupled with the rise of a legitimate local force in Más País — suggests that the long-term future of Madrid’s Left is positive.

El Mundo’s Luis Ángel Sanz warns that “Díaz Ayuso has amply demonstrated in the past her ability to get herself into trouble.” But he agrees that the current president in all likelihood will once again emerge triumphant in the next elections. “But it will all depend on whether she is up against a strong candidate. Everything points to [PSOE prime minister] Pedro Sánchez betting on someone new.”

Right now, the priority for PSOE is getting its own house in order. Meanwhile, it might be a good idea for Mr Sanchez to start looking for a few lucky generals.