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Podemos (We Can) leader Pablo Iglesias (L) and Izquierda Unida (United Left) leader Alberto Garzon pose before their meeting at the Spanish parliament in Madrid, Spain, February 18, 2016. REUTERS/Andrea Comas/File Photo

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By Sonya Dowsett

BARCELONA (Reuters) - Yolanda Yeste lost her flat and two jobs as a hospital security guard during Spain's five-year economic crisis and its aftermath.

    Still unable to find work, the 54-year-old is one of millions of Spaniards who have yet to be touched by an economic recovery and who voted for anti-austerity party Podemos in an election last December.

No clear winner emerged from the ballot and political parties failed to form a coalition government, so voters go back to the polls on June 26 for the second election in six months.

    Yeste says she will cast her vote for a new alliance between Podemos and smaller left-wing party.

    "The fact that the left is united is a great achievement from my point of view," the mother-of-two said, sitting in a hall in Barcelona before a community activists' meeting.

"There has to be a change, we can't keep on going as we are."

    The Unidos Podemos (United We Can) alliance may or may not end up joining a coalition government in an election which the centre-right People's Party (PP) of caretaker Prime Minister Mariano Rajoy is forecast to win but again fall short of an absolute majority.

    But with opinion polls showing Unidos Podemos could take a quarter of the vote in the election, it is set to assure a strong anti-austerity bloc in the next parliament at a time when spending cuts and labour reforms in Europe have led to student protests in Paris and worker riots in Athens.

    In a 50-point manifesto, the alliance promises to row back on labour reforms put in place during the euro zone debt crisis that made it easier to hire and fire employees, and says it will increase spending on health and education.

    It also wants to increase taxes on companies and the wealthy, create a universal minimum wage of 600 euros ($667) a month, and make utilities provide free energy to the poor.

   

'I'VE RIGHT TO A ROOF'

The leading party among the young and the unemployed, Podemos arose from a surge of street-level political activism which flourished following Spain's recession on issues from housing to cutbacks in health and education.

    These issues remain pertinent in a country where unemployment is the second-highest in the euro zone, with nearly half of young people out of work, and where more than a quarter of the population is at risk of poverty.

    "A Podemos-United Left alliance appeals to those who are still suffering the consequences of the economic crisis and who are looking for change," said Francisco Camas, analyst at pollster Metroscopia.

    The community centre in Barcelona hosts meetings for the Mortgage Victims' Association, an activist movement that was set up in 2009 to help those facing eviction after Spain's housing crash.

    On a recent afternoon, around 50 people sat on white plastic chairs and talked about their housing concerns. On the wall were slogans such as "Don't trust the banks" and "I've a right to a roof".

    Podemos, led by the pony-tailed former academic Pablo Iglesias, has harnessed the power of these social movements, putting forward candidates that represent alliances of different groups. This strategy had great success in regional elections last year when Podemos-affiliated parties swept to power in cities and regions across Spain.

    Opinion polls, show the centre-right Ciudadanos up slighty from December at around 15 per cent and the Socialists dipping to around 20.5 percent.

ANOTHER VENEZUELA?

    Podemos landed a surprise in the December election. Polls predicted it would come a distant fourth but in the end it came close third, winning 69 of the 350 seats in parliament.

But its alliance with United Left could also deter some voters.

The hook-up potentially brings 1 million voters to Podemos's base of five million which it hopes will land 13 extra parliamentary seats to the 71 the two parties gained in December.

But a poll from the Sociological Research Centre and internal party estimates show around 1 million who voted for Podemos in December could cast their ballot for the Socialists or Ciudadanos in June as a result of the move left, thus erasing the potential gains of the alliance.

    "United Left would have voted with us anyway in parliament, so this confluence brings no extra upside but it does create a downside," said a senior Podemos party member, who favoured the two forces running on separate tickets.

    By overtaking the 137-year old Socialist party as the main left-wing force and raising fears of a hard-left government, the alliance may even boost support for Rajoy and smooth the way for a PP-led government.

    "For us it's just perfect. We can campaign hard on saying we're the best option to avoid a radical government like in Venezuela," said a senior PP member, speaking on condition of anonymity.

    "And if the Socialists come behind Podemos then they'll have no other choice than to back us," he said.

   Back in the community centre, unemployed former warehouse worker Dario Suarez talks of how the experience of losing his job and then his flat gave him a new political consciousness.

Suarez, who has lived with his parents since losing his home, voted for Podemos in December and said he was likely to vote for the Podemos alliance in June due to their social policies.

"I had never voted before, I didn't believe in any political party, I thought they were all the same," said the 33-year-old. "It is fantastic to me that there are new parties trying to change things."

(Additional reporting by Julien Toyer; Editing by Julien Toyer and Angus MacSwan)

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