WHEN Mariano Rajoy and his conservative People’s Party (PP) were elected in 2011, Spain had been knocked flat by the euro crisis and the bursting of a property bubble. Unemployment had more than doubled, to 20% (it peaked at 26% in early 2013), the economy was in a prolonged slump and most of the cajas (savings banks) were insolvent. Spain today is an altogether brighter place. The economy is still smaller than in 2008 but is set to grow by more than 3% in 2015—the best performance among large western European economies. Unemployment is falling steadily. Consumer and business confidence is robust. As Mr Rajoy proclaims: “Spain has passed from being a country on the brink of bankruptcy to a model of recovery that provides an example to…the European Union.” Mr Rajoy hopes that this record will bring him victory at an election on December 20th (see article). He can claim some credit for the recovery. While other euro-zone countries dithered, his government acted boldly. It has sorted out the banks, halved the budget deficit and made Spain more competitive by reforming the labour and energy markets. He makes a good case for another four years. But many Spaniards want political renewal, too—and to that Mr Rajoy’s response is a shrug.

The slump exposed the accretion of corruption and cronyism in the PP and the opposition Socialists, which have largely run Spain since democracy replaced Franco’s dictatorship. Both had recourse to illicit financing; their gouging of the cajas and their spendthrift regional governments contributed to the national collapse. Hence the crisis has spawned new political forces. Podemos (“We can”) is a cry of anger. Its leader, Pablo Iglesias, a leftist political-science professor, now spends less time talking about class struggle and more praising the Nordic social model. But his enthusiasm for Greece’s disastrous experiment with his ideological soulmates, the Syriza party, bodes ill.

A more constructive response to the euro crisis lies in Ciudadanos (“Citizens”), a liberal party (in the British sense) in a country where liberalism has never been strong. Its leader, Albert Rivera, aged 36, is untested, but his advisers propose many policies that Spain needs. Ciudadanos would do more than the PP to deepen economic reforms, cut wasteful duplication in government and boost sluggish productivity. It wants a single labour contract in place of the cosseting of insiders that leaves many young people as temporary hires. Like Podemos, it wants to reverse the PP-Socialist carve-up of institutions that ought to be independent, including the judiciary, the diplomatic service and the universities. It opposes Catalan independence but, unlike the PP, recognises that Spain is a pluricultural country. And unlike Podemos, it wants to build on, rather than threaten, the achievements of the past 40 years.

Reform politics, as well as the economy

If The Economist had a vote, it would go to Ciudadanos. But the next government is likely to be a coalition, because opinion polls suggest that, although the PP will again be the largest party in the Cortes, it will fail to keep its majority. Since his party is in the centre, Mr Rivera may have the casting vote. He should resist the temptation to join Podemos in a centre-left government led by the Socialists under their lightweight leader, Pedro Sánchez. Such a government would be weak, and the Socialists have promised to undo the PP’s labour reforms. Rather, Ciudadanos should ally with Mr Rajoy—on condition that the next government adopts the anti-corruption agenda on which it has campaigned. Populism is on the rise in the EU. If Spaniards eschew it and embrace reform, their country will indeed be an example to Europe.