Introduction

1Since the early 1980s PASOK and PSOE have been two of the best performing parties of the social-democratic family (Gallagher & Williams, 1989; Grunberg, 1996; Puhle, 2001; Moschonas, 2002; Alliès, 2007; Delwit, 2007). However, in the aftermath of the Euro-debt crisis (post 2009) they have both witnessed a significant decrease in their strength. In the case of PASOK the erosion of its appeal has been dramatic [1]. Meanwhile, both countries have seen the resurgence of parties of the Left. Evidently, this is more pronounced in Greece where the Coalition of the Radical Left (SYRIZA) is arguably in the process of replacing PASOK as the main left-of-centre political force.

2In attempting to explain this phenomenon one can reasonably point to the fact that PASOK and PSOE are paying the price for their failure to manage the Euro-debt crisis. Both parties were in office during that time (PSOE won the elections of 2008, while PASOK those of 2009) and in both cases their record was one of unmitigated failure [2]. The economic and social fallout of the crisis was such that it unsurprisingly had its toll on the centre-left parties.

3However, this is only part of the story. The fact of the matter is that the current problems of the two socialist parties run deeper than their failure to manage the crisis. In fact, as it will be shown in this paper their present difficulties have a lot to do with the crisis of a previously dominant model of socialism which now seems to have reached a historical cul-de-sac.

4In particular, after the democratic transitions PASOK and PSOE, aided by the quasi-unelectability of the Right, managed to impose an electoral – if not ideological – hegemony built on a composite mix of (i) social welfare extension, (ii) promotion of civil liberties and (iii) growth based on economic liberalism (Moschonas & Papanagnou, 2007). This model and its deep anchorage in liberal economic solutions (for PASOK after 1985) was normatively reinforced in the 1990s with the entry into force of the Maastricht criteria (and EMU in 2001) and the surrender of monetary (and to some extent fiscal) policy to supranational authorities adhering to a strict monetarist paradigm.

5Thus, in Greece between 1993 and 2004 the socialists run an electorally successful program based on social, civil and economic liberalism (with a particular EMU influenced neo-liberal tint). Similarly, in Spain between 2004 and 2011, Zapatero’s PSOE also implemented a series of reforms that were in total accordance with the liberal spirit of the EMU (Featherstone, 2005; Field, 2009; Bosco & Sanchez-Cuenca, 2009).

6These reform programs of the last two decades did produce a number of tangible results. In the area of civil rights they led to the implementation of important reforms – more prominently in Spain (Mouzelis & Pagoulatos, 2003; Mathieson, 2007). In terms of social policy, the record was more mitigated but did not signal a complete reversal of past trends. After expansion in the 1980s, the 1990s and the 2000s were periods of moderation and streamlining – partly guided by the influence of New Labour/Third Way recipes in welfare reform and partly by the requirements of EMU in terms of public spending.

7However, in the economy (and despite high growth rates) the socialist governments failed to substantially alter the dominant model of production and distribution that was based on internal consumption (as the principal motor for growth), low investment on R&D, low productivity, higher inflation vis-a-vis the Eurozone, a high current account deficit, tax evasion and corruption.

8I argue that even though these pitfalls were understood by the socialist parties and informed to some extent their agendas, the centre-left governments ultimately failed to address them chiefly because of: (i) their (EMU reinforced) belief in the capacity of deregulation and liberalization to stimulate both sustainable growth and profound socio-economic change and (ii) their desire to win elections in largely bi-partisan, majority producing electoral systems, thus avoiding greater political costs.

9Nowhere is this more obvious than in the strategically important areas of tax evasion and corruption. Overturning such long-established practices and profoundly altering the structure and levels of fiscal revenue would have ensured the financing of the more lofty aspirations in social welfare and civil liberties. Also, it would have allowed deeper and more sustainable changes in the problematic models of production. However, under the influence of the EMU sponsored neo-liberal doxa, the emphasis of the socialists was on achieving high rates of growth via the opening up of markets and not on collecting taxes. As an outcome, the socialist governments for some time seemed to be allowing the private enrichment of citizens while ultimately eroding the sustainability of long-term reforms and growth.

10Hence, this paper will critically discuss the record of the two parties in the areas of social, civil and economic reforms. I will show how it conformed to their historical political pedigree and how it allowed them to argue that they were working towards modernization. In the process, I will show how in the economic realm it was connected to the EMU monetarist paradigm and how ultimately this underlying vision undermined more profound efforts. The particular focus will be on the Simitis (1996-2004) and the Zapatero years (2004-2010). The article will not take into consideration the record of the G. Papandreou governments and that of the Zapatero governments post 2010. This is because in both of these cases the governments were not so much implementing a socialist reformist agenda as much as attempting to react to the exigencies of the financial markets and the dictates of external agents.

11In terms of comparability I argue that despite taking place in different time periods the cases have strong affinities. In both countries the two leaders advocated and implemented a reform agenda faithful to southern European socialism’s political pedigree. Similarly, in both cases the influence of EMU related neo-liberalism was strong. And in both cases their economic records ended up protracting an outdated model of production and distribution, while neglecting more profound obstacles that required a more conflictual and politically costly program.

Political discourse in the European south: Modernization, EMU and liberalism

12In both Spain and Greece political discourse in the past three decades has been dominated by the themes of modernization and Europeanization (Kennedy, 2001; Featherstone, 2005). Nonetheless, in light of the right-wing authoritarian past of the region the social and cultural dimensions of modernization (building a welfare state, reducing social inequalities and extending civil rights) are also considered vital parts of this process (Moschonas & Papanagnou, 2007).

13In the 1990s and the 2000s mostly as an outcome of the direction of European integration (Single European Act, European Monetary Union) modernization in Europe acquired a particularly neo-liberal tint (Gill, 1998). In particular, EMU was premised on the maxims of central bank independence, the primacy of price stability, market deregulation and competition and fiscal frugality. Consequently, in both Spain and Greece pro-European political discourses were axed around the nodal points of economic liberalization, deregulation, monetary convergence and lowering taxes and interest rates (Pagoulatos & Triantopoulos, 2009).

14Thus, once in government centre-left forces in Greece and Spain sought to maintain macro-economic stability, instil flexibility in internal markets and deregulate key economic sectors. However, during that time they also sought to maintain levels of social protection (Garcia & Karakatsanis, 2006) and pushed for the extension of civil liberties in cultural settings marked by traditional attitudes.

15However, what remained out of the radar of these centre-left, European oriented modernisms was a clear strategy for altering historical deficiencies of the socio-economic matrix. In particular, what was missing was a strategy for qualitatively improving the wobbly foundations of public finances and strengthening the competitiveness of their respective economies. Evidently, the reasons explaining the failure of the Greek and Spanish centre-left governments to improve the collection of taxes, combat corruption and by extension address key weaknesses in their economies, in many ways go beyond the willingness shown by political protagonists. Structural economic impediments (e.g. heavy presence of self-employed), deficiencies in the state machinery, institutional and cultural inertia are all barriers that are very difficult to overcome in the space of a few years. This is more obvious in the case of Greece. Indeed, in the last three decades Greece’s fiscal problems have been much more pronounced than those of Spain; a fact related to the intensity of problems like clientelism and administrative incapacity and also to the heritage left by the fiscal hyperboles of the early Andreas Papandreou governments vis-à-vis the more balanced policies of Felipe Gonzalez (Boix, 1998; Zahariadis, 2010; Featherstone, 2011; Lyrintzis, 2011; Triandafyllidou, Gropas & Kouki, 2013).

16Nonetheless, the point made here is that the neoliberal spirit that guided the economic policies of Simitis’s PASOK and Zapatero’s PSOE was averse to reforms like increasing the levels of taxation. Additionally, it conceived growth as the outcome of a process of fast and strong liberalization. Obstacles like low innovation and productivity were supposed to be addressed only implicitly via the opening up of markets (especially labour productivity was almost entirely premised on the deregulation of the labour market). Hence, for the better part of this period (slightly prior to and after EMU) both PSOE and PASOK systematically downplayed the difficulties involved in overturning structural barriers and heavily stressed the opportunities unleashed by European Monetary Union and liberal economic modernization. Consequently, this played to the interests of those better placed in markets, or in general those closer to the centres of power, and allowed an outdated system of production to survive.

PASOK and economic modernity. Preparing for the future?

17The anchorage of PASOK in economic liberalism and modernization/ Europeanization took a decisive step forward in 1996 with the accession of Costas Simitis to the party’s leadership and the assumption of the reins of government by the faction of the modernizers [3] (Moschonas, 2001; Spourdalakis & Tassis, 2006).

18After having fully embraced EMU [4] the modernizers put the emphasis on liberalizing markets and limiting the role of the state. Their main priorities were to combat inflation and achieve macro-economic stability, reduce the public deficit, and deregulate the economy. (Simitis, 1995, p. 34). The historically overextended Greek state was to retain only a strategic role, mostly as a provider of services of social importance and as a guarantor of social solidarity (education, health, pensions etc.) (Simitis, 1995, p. 107).

19Concurrently, entering EMU became a national “obsession” (Simitis, 1995, p. 111; Simitis, 2002, p. 183) setting the limits to the politically possible (Featherstone, 1998). In this vein, EMU inspired neo-liberal economics were the royal road to becoming European. They would in theory lead to better living standards and to a more open and transparent society; creating in the process the conditions for the social and cultural improvement of the country. It was this “obsession” which in many ways prevented more fundamental reforms from gaining visibility.

20Thus, after 1996 the government prioritized the struggle against inflation, the reduction of the public deficit and growth achieved through deregulation. Thanks to an unprecedented wages curb, in part the product of consultation with the country’s trade-union leaderships (close to PASOK), the socialist governments succeeded in reducing inflation from 14.4 % in 1993 to 8.2 % in 1996 and then 3.4 % in 2001 (OECD Factbook, 2010). Simultaneously, the socialists took measures towards increasing public revenue mainly via privatizations and secondly through fiscal consolidation. (Pagoulatos, 2005, p. 374). The public deficit was reduced from 11.9 % in 1993 to 3.7 in 2000 but then rose again after 2001 to reach 7.4 % of GDP in 2004 in the run-up to the Olympic Games (OECD Factbook 2010). Similarly public debt was also temporarily reduced only to spiral out of control again after 2000 [5]5 (103.1 % of GDP in 1996 and 114.2 % GDP in 2004. OECD Factbook, 2010). Lastly, following European directives and recommendations the government completed the liberalization of the banking sector and that of the telecommunications and energy sectors, while it also partly liberalized the labour market (inter alia Matsaganis, 2002; Featherstone, 2005).

21Between 1996 and 2004 the Greek economy grew on average by 3.9 % of GDP per year (OECD Factbook, 2009) mainly as an outcome of the lowering of interest rates brought about by entry into the EMU – which led to a significant increase of household credit and consumption. Growth was also aided by the fiscal stimulus provided by the organisation of the Olympic Games, immigration and the boost it provided to the booming housing sector, and the revenues from tourism (Mitsopoulos & Pelagidis, 2009).

22Nonetheless, while growth was achieved and the official macro-economic results for some time improved the country’s international image, when it came to reversing chronic weaknesses PASOK’s record was more than disappointing.

23Most importantly, because of their strong inclination towards achieving fast growth the socialists never made combating tax evasion their number one priority (Artavanis, Morse & Tsoutsoura, 2012). The weak tax collection is associated with a large informal economy which has been estimated by Schneider (2009) to be around 25 % of GDP (OECD Greece, 2009, p. 59). The Greek state has not been able to tax the mass of the self-employed (around 30 % of the population) and small businesses. In addition, there is considerable slippage also in social security contributions, with evasion estimated between 20 and 30 % of the revenue collected (Tatsos, 2001). As is the case with tax evasion, contribution evasion is larger among the self-employed than wage earners (OECD Greece, 2009, p. 72).

24Thus, three decades after the democratic transition total tax revenue at 32.6 % of GDP (in 2008, just before the crisis) was still very low by European standards; and lower than that of Portugal, Italy and Spain. To these one has to add an unjust tax system that puts a heavy emphasis on indirect taxes and pressures the middle classes, thus contributing to both significant income inequality and chronic shortfalls in revenue (Stathakis, 2011). At no point did PASOK try to decrease the weight of indirect taxes. (OECD, 2010, p. 91). On the contrary, it maintained and increased the higher levels of indirection taxation (OECD, 2010, p. 91). At the same time, taxes on personal income as a percentage of total taxation in Greece remain significantly lower than for example those in Spain. (OECD, 2010, pp. 87-88).

25It would of course be a mistake to argue that the “modernizers” did not make any efforts towards combating tax evasion and fraud. (See OECD Greece Surveys from 1996 onwards). These issues were indeed part of PASOK’s modernizing discourse. Hence, the socialists’ failure to redress the dire state of fiscal revenues was in part also an effect of the structural barriers of the economy and the incapacities of the state machinery (including the governmental budgeting process) which historically plague Greece (OECD 2010, p. 19). However, the point made here is different. It is argued that because of the deregulation logic of PASOK’s discourse and because of their yearning for quick results and political success, the modernizers never prioritized the significant improvement of tax collection and public corruption. This would have required a much more conflictual discourse and a more long term strategy.

26A more conflictual path in terms of addressing the chronic imbalances of the Greek state-economy complex would have also put the socialists in a sounder path towards tackling two further, interrelated problems of the Greek economy: the lack of competiveness and low productivity. The Greek economy is characterized by low competitiveness as a result of the inflation differential vis-à-vis the northern Eurozone [6]. However, one of the major causes of the higher inflation is weak competition in the product and service markets (OECD Greece, 2009, p. 20). The reality is that the easy access of Greek big capital to decision makers, and its control of major television and press outlets, have fostered a model of development that is not very conducive to price competition. In fact, during the years of the Simitis governments PASOK developed highly questionable ties with part of the Greek capitalist class (Lyrintzis, 2005, p. 252; Spourdalakis & Tassis, 2006, p. 500).

27Similarly, PASOK never made low productivity and by extension the funding of R&D one of its priorities [7]. During the modernizers’ tenure the Greek economy remained dominated by a mass of internally oriented and labour intensive small enterprises (OECD Greece, 2009). Once again, reversing this trend this would have required a more systematic effort in tax collection and public investment.

Social and cultural modernization: qualified progress

28PASOK’s electoral profile was complemented with a concern for social welfare, modernizing social mores and extending civil liberties. Thus, PASOK from 1996 onwards solidified and partly extended the coverage of the welfare state (Sotiropoulos, 2004). Social expenditure in Greece increased from 10.2 % of GDP in 1980 to 16.5 % in 1990, with the bulk of the money however going to pensions. (OECD Social Expenditure (SOCX) database 2010. See also George, Stathopoulos & Garces, 1999). During the modernizing period PASOK continued to increase social expenditure (maintaining the heavy emphasis on pensions to the detriment of other social benefits), albeit at a slower pace (17.3 % of GDP in 1995 and 21 % of GDP in 2005. OECD SOCX database, 2010). Thus, Greece, which (with Spain) was traditionally in the group of countries with relatively low levels of social expenditure (less than 20 % of GDP), approached countries with a historically more developed social policy. Nonetheless, it needs to be noted that social security and health provision are still characterized by many deficiencies in terms of coverage, efficiency, administrative rigidities and unlawful practices (e.g. under the table payments to doctors) (Venieris, 2003). In fact, as Petmesidou and Polyzoidis (2005, p. 121) note despite the increase in social expenditure, the effectiveness of social transfers in reducing inequality and poverty remained strikingly limited; a fact which puts PASOK’s achievements in this domain into question.

29At the same time, PASOK has traditionally been a promoter of civil rights and cultural liberalism (Mouzelis & Pagoulatos, 2003). Civil reforms under the modernizers have been somewhat less spectacular than in the 1980s but nonetheless important. Paramount amongst them were measures taken to improve the treatment of minorities. Hence, in 1998 the government abrogated legal provisions (Article 19 of the Greek citizenship code) which made it possible for the Greek state to deprive “non-ethnic” Greeks (especially members of the Muslim/Turkish minority) of Greek citizenship (Anagnostou, 2005; Grigoriadis, 2008). Additionally, the Simitis governments legislated affirmative action policies, such as the establishment of preferential quotas for the entry of Muslim minoritarian students in state universities. On the other hand, efforts to extend social rights to the large masses of inflowing immigrants were restrained (Baldwin-Edwards & Fakiolas, 1999). Finally Simitis established in 1998 of the Office of the Ombudsman as an independent administrative authority with the task of protecting citizens from rights violations, abuses, mistreatment, or general malpractice on the part of the public administration.

30More memorably however PASOK clashed with the Orthodox Church over the elimination from identity cards of any reference to religion. In 2000 the Church under Archbishop Christodoulos and with the support of Nea Dimokratia waged an unprecedented public campaign against the government (collecting 3 million signatures for a referendum), which however failed to obtain any results.

31Despite its weaknesses, the record of PASOK in increasing social expenses and extending civil rights was not lost on centre-left voters. It acted as reinforcement to the party’s historical image as a progressive reformist force and allowed it to lead the political debate in these fields. It was exactly this composite record in social and cultural modernization which ultimately allowed PASOK to claim, with some success, that its liberal policies towards achieving (nominal) convergence with EMU were part and parcel of its mission of modernization (Muller, 2005; Schmidt, 2010).

Zapatero’s PSOE: neo-liberalism and civic republicanism

32Immediately after taking the reins of the PSOE, Zapatero gave emphasis to ideologically and programmatically repositioning the organization with a view to presenting a new centre-left agenda. (Augustin, 2006; Lago Mendez, 2006; Maravall, 2009). Taking its cue from the success of the New Labour Party, the new generation of cadres led by Zapatero sought to give bigger emphasis to issues of individual self-fulfilment, social openness, tolerance and liberty; all thought to have been neglected by the Felipista and Guerrista elites. The signifier of the Nueva Via (New Way), echoing Blair’s Third Way and Schroeder’s New Middle, aimed exactly at symbolizing a new beginning both in terms of generational change and in terms of promoting a new vision for Spain.

33Key towards this new discursive articulation was the work of political theorist Philip Pettit on freedom as non-domination (Marti & Pettit, 2010), which provided Zapatero with the right philosophical framework for developing his own ideas on personal self-fulfilment, freedom and solidarity (Marti & Pettit, 2010, p. 110). Accordingly, as Secretary-General Zapatero related his vision of freedom as non-domination to modernization. This modernizing process involved primarily an ethos of respect and sincere dialogue in the political sphere, guaranteeing authentic equality of opportunity, promoting education as the key to the future and tending to the needs of the most disadvantaged (Maravall, 2009). Politics would thus be about fostering the emancipation of individuals from social relations of oppression and enhancing the accountability of government (Marti & Pettit, 2010, p. 14).

34Following his dramatic victory in 2004 (Chari, 2005) Zapatero as primeminister promoted a political discourse axed around the themes of economic growth and stability, individual freedom, public accountability and solidarity (Kennedy, 2007). Simultaneously, against the PP’s widely unpopular involvement in the “Coalition of the Willing”, he implemented a return to Spain’s more traditional EU oriented foreign policy. In symbolic terms this choice also tied well with PSOE’s historical commitment to Europeanization.

35Unsurprisingly however, in the economic field Zapatero’s discourse about individual autonomy and freedom translated into rather orthodox neo-liberal policy choices like deregulating markets and running fiscal surpluses while lowering taxes (Mulas-Granados, 2009). As argued by Jordi Sevilla (2002) (prominent member of the Nueva Via) socialism’s duty was to support private property and the creative forces of the individual and at the same time limit the importance of hereditary privileges and economic monopolies which restricted personal liberty and eroded equality. Sevilla’s and Zapatero’s economic reasoning, despite stressing the need for solidarity and social sensitivity, was based on a notion of equality of opportunities. The emphasis was clearly on creating individual wealth and not on building a more socially sustainable economic model. This logic was to a great extent conveyed by Zapatero himself when he succinctly argued that “lowering taxes is also a policy of the Left” (Navarro, 2012). In the same vein, the 2004 electoral program of the PSOE, masterminded by liberal economist Miguel Sebastian, promised to introduce a unique tax rate for personal income, which would also be similar to that of corporate tax (Mulas-Granados, 2009, p. 189).

36Hence, the fact that the PSOE maintained to a very significant extent the economic policies of J. M. Aznar comes as no surprise (See Murphy, 1999). Impressive rates of growth were thus achieved between 2004 and 2008 but much like in Greece these were principally an outcome of: (i) high levels of consumption driven by lower interest rates (an outcome of the country’s entry to EMU); (ii) The “explosion” of the construction sector, which was facilitated by the increased permanent income and debt capacity of households [8]; (iii) The reduction in unemployment as a result of the growing economy; (iv) The influx of immigrants which tempered demand pressures on real wages, thus sustaining job creation, primarily in the service and construction sectors. (For the above see OECD Spain, 2007, p. 22; OECD Spain, 2010).

37Profiting from the high rates of growth Zapatero’s governments managed to reduce the public deficit and public debt (The country run a budget surplus of 1.9 % GDP in 2007, while the debt was reduced from 53.4 % GPD in 2004 to 47 % in 2008). Nonetheless, main weaknesses in state-economy relations remained almost unchanged (Royo, 2009a, p. 435). First and foremost, Zapatero systematically avoided raising taxes. In 2007, the tax code was simplified by the reduction of the number of tax brackets to four and the top marginal rate was cut from 45 to 43 % (OECD Spain, 2007, p. 93). In addition, the corporate tax rate was cut from 30 to 25 % for small- and medium-sized enterprises, and from 35 to 30 % over two years for larger firms (OECD Spain, 2007, p. 94). While the PSOE refrained from implementing its more radical electoral promises the path that was finally chosen obviously conformed to neo-liberal orthodoxy.

38Of course, the Spanish fiscal system has historically been more stable than the Greek one. Additionally, Spain traditionally lacks the heavy emphasis on indirect taxes and relies more on the taxation of personal income and profits, and social security contributions (trends maintained by the governments of Felipe Gonzalez). Nonetheless, what emerges from an examination of the data is that the Zapatero governments did not increase public revenues and crucially failed to address fiscal failures and imbalances (OECD, 2010, p. 83). Characteristically, income lost to tax fraud and evasion remains significant. Total tax revenues stood at 33.3 % of GDP in 2008 while the shadow economy was equivalent to 18.7 % of GDP (Schneider, 2009; OECD, 2010, pp. 77-80). Meanwhile, the government failed to address endemic phenomena of corruption, which involve the abuse of public money. (Jimenez 1998). According to Transparency International Spain’s score in the Corruption Perceptions Index deteriorated from 6.9 in 2004 (out of 10) to 6.2 in 2011. Nonetheless, this still sets Spain apart from Greece which in the same rankings scored 3.4 in 2011, and 4.3 in 2004 (Transparency International, 2011).

39Partly as a result, the PSOE was not able to address a number of structural issues that burden Spain’s economic performance. In particular, like in Greece the socialists failed to find the antidote to the economy’s reliance on domestic demand and labour intensive industries (especially construction and the services) as the main stimuli of growth (OECD Spain, 2007, p. 69). Furthermore, they did not redress the very big current account deficit – a record 11 % of GDP in 2008 – which was accentuated by the persistent inflation differential vis-à-vis other core EU [9]. Likewise, they paid little attention to the meagre productivity gains and to the inability of the private sector to absorb technological innovations [10] (OECD Spain, 2007, p. 35-37; Dolado & Stucchi, 2008).

40It would of course be incorrect to say that socialist discourse was blind to the aforementioned structural economic weaknesses (they were after all mentioned in the National Reforms Program (NRP) adopted by the government in 2005). Nonetheless, like in the case of PASOK, these played a second role to maintaining high rates of growth, low levels of taxation and a balanced budget. In that sense, it is telling that tax evasion and corruption were not mentioned as one of the seven separate targets to be addressed by the NRP. Repeating the pattern that we saw in Greece the PSOE governments, adhering to neo-liberal stricture, seemed content to allow an outdated model of production based on cheap and abundant temporary jobs in sectors of low innovation and productivity to survive (Maravall, 2009, p. 258). As long as economic growth sustained the budget and helped reduce unemployment the government could avoid addressing tax evasion and fraud (Royo, 2009b, pp. 19-20).

PSOE’s social and cultural modernization

41The record of Zapat ero’s PSOE in social expenditure is mixed. Zapatero did not significantly increase social expenditure, opting instead to divert resources to key targets and rationalize expenses. Thus, social expenses rose from 21.4 per cent of GDP in 2005 to just 21.6 % in 2007 (OECD Social Expenditure database (SOCX), 2010) with funding increasing for housing, pensions and dependent care (Mulas-Granados, 2009, p. 192). Similarly, R&D spending made only very minor gains. Overall, according to Bernardi and Sarasa the welfare reforms of Zapatero’s PSOE followed New Labour’s model in reforming social protection and thus paid more attention to rationalizing expenses. (Bernardi & Sarasa, 2009, p. 245). It is thus fair to say that PSOE’s mixture of modernization was not based on a significant extension or redesign of welfare policies. Nonetheless, in tune with the political discourse of non-domination Zapatero’s governments exhibit a much more impressive record in extending civil rights.

42A lot has been written about Zapatero’s record in combating domination (Field, 2009). Hence, only a brief overview is necessary here. To begin with, breaking with the post-Franco era Zapatero’s 2007 Law on Reparation called for the Ministry of Justice to collect every claim of abuse, torture, and murder connected to the Civil War and the Franco era, and to adjudicate indemnities to the victims of the dictatorship, including restoring pensions to republican soldiers, and the extension of Spanish citizenship to the children and grandchildren of those exiled from Spain (Encarnación, 2009, p. 410).

43Furthermore, Zapatero took great efforts to bolster the civil rights of women, gays and lesbians, and immigrants. In a symbolic move his first ministerial cabinet was equally divided between eight men and eight women. Also, with the 2004 law on Gender Violence the government sought to protect the rights of abused women as the law stipulated stiffer sentences for male perpetrators of domestic violence. The law also introduced a host of new entitlements in the areas of housing, welfare, labour law and criminal and health assistance for female victims of sexist violence (Calvo & Martin, 2009, p. 489). Additionally, in February 2009, the government introduced a new abortion law intended to allow women to terminate a pregnancy after the first 12 weeks. In terms of homosexual rights, breaking with southern European tradition, Spain became only the third country in Europe in 2005 to legalize same sex marriage (Encarnación, 2009, p. 408). Lastly, in 2005 the PSOE government promised amnesty and the path towards full Spanish citizenship for those immigrants who chose to register. By 2007, Spain’s amnesty policy had led to the legalization of over one million illegal migrants who could prove that they were employed (Field, 2009, p. 387).

44The imprint of Zapatero’s anti-domination discourse on all of the above mentioned reforms is clear. The record of the socialist governments in extending civic rights was to some extent impressive. Nonetheless, the fact remains that Zapatero’s liberal republicanism neglected the deeper changes that would have to be made in taxation and in combating corruption in order for many of his ambitious civic reforms to have a long term future.

Assessment

45What transpires from this critical examination is that the once dominant electoral model of southern European socialism is in effect largely responsible for many of today’s ills. In the 1980s and early 1990s the socialists implemented policies that were supposed to guarantee economic growth, connect their economies to other EU countries and promote greater social welfare and civil rights (Puhle, 2001). While in terms of securing the democratic transitions this might have been enough, in the context of the late 1990s and early 2000s it was a failure. During that time and up until 2009, the socialists implemented policies of deregulation, liberalization and privatization in a context of low interest rates. At the same time they tried to maintain social welfare expenses and extend liberties. While this mix allowed them to win elections – in times of economic and political normalcy – it did little to avert problems arising from tax evasion and fraud, corruption, low productivity and falling competitiveness. In light of their political past, and because of the influence of EMU-monetarism, the socialist governments never made the combating of these deeply rooted pitfalls their number one priority. Their emphasis, even if implicit, was on extending private enrichment and not on achieving socially cohesive development.

46Thus, one can reasonably argue that today we are witnessing the end of the hyper-dominant social-liberal, southern-European, socialist paradigm. The present context requires addressing issues of corruption, fiscal consolidation, productivity, and competitiveness. This means that PASOK and PSOE as the organizations that dominated the thirty-odd years following the democratic transitions will have trouble presenting themselves as capable of leading this turn. The rise of the Left in both countries is emblematic of that difficulty, without this meaning that they will be the ones necessarily benefiting from the present turbulences.

47Additionally, the paths of the two parties seem to be diverging. The similarities in both cases have been strong but naturally can only reach a certain degree. As we have shown in this article PASOK’s efforts were ultimately more disappointing. Whether this was an outcome of the more complex Greek economy-state relations (clientelism, public corruption, higher levels of indirect taxation etc.) is not the point. Rather, the point is that the Greek socialists in the face of hard challenges shied away from making more drastic and meaningful reforms and decisions. The fact that the PSOE performs much better than PASOK is not an accident. The sounder state of fiscal policy in Spain and its greater sophistication (even though belated in terms of dealing with the dictatorial past) in terms of civic liberalism have allowed the party to retain a good part of its power. As political and economic lines are shifting in southern Europe these once hegemonic parties face different challenges.