On Saturday, Pedro Sánchez resigned as Socialist Party (Spanish Socialist Workers’ Party—PSOE) general secretary, ousted in an internal palace coup initiated by former Prime Minister Felipe González and supported by the media and big business. This paves the way for the installation of an unpopular minority government under the right-wing Popular Party (PP).

After 12 hours of tense talks in the PSOE Federal Committee between Sánchez’s faction and its opponents, led by Andalusian PSOE leader Susana Díaz, Sánchez announced his resignation.

According to surveys published the same day, Sánchez had the support of some 60 percent of PSOE members and voters. Outside PSOE headquarters, hundreds of PSOE members, mostly elderly pensioners, came to support Sánchez. As his opponents arrived, the protestors shouted slogans denouncing them as “putschists,” “fascists” and “traitors,” and shouted “Pedro [Sánchez] yes, Susana Díaz no,” and, “They are putschists, not socialists.”

Sánchez announced his resignation after his proposal for calling an extraordinary general meeting for the membership to decide who should be the PSOE’s leader was defeated 132 to 107.

A caretaker commission team was formed, led by a member of the anti-Sánchez faction, Asturias regional President Javier Fernández. Sánchez pledged loyalty to this body, stating that “the caretaker commission set up in the following hours will count upon my loyal support.”

The meeting also agreed to another Federal Committee meeting next week to rubber-stamp the putschists’ pre-approved decision to abstain in a parliamentary vote so as to allow the installation of a PP-led minority government.

Such a government would be installed in an utterly anti-democratic fashion in order to escalate attacks on workers’ social and democratic rights. The PP received only 33 percent of the vote in the last elections in June.

The spectacle that befell Spain’s oldest political party (founded in 1879), and the media’s shameless celebration of Sánchez’s ouster the next day, are indicative of the immense political crisis in Spain and across Europe.

It means the de-facto end of the bipartisan political system that has dominated Spain since the end of the fascist dictatorship of General Francisco Franco in 1978. In this system, power alternated between the PP and the PSOE, refounded in the 1970s by González, the PSOE’s general secretary from 1974 to 1997, as a free-market, pro-NATO party. Now, however, it is open and clear that these two parties both served as reactionary instruments of the same ruling class.

Gónzalez’s government, from 1982 to 1996, combined certain concessions such as publicly funded healthcare and education with massive attacks on the working class—deindustrialization, privatization, deregulation, currency devaluation and labour reform. It passed the first Anti-Terror Law and sponsored terror groups formed to murder members of the Basque armed separatist group ETA. On the international level, it took Spain into the European Union and NATO.

The claims of the putshcists and the media notwithstanding, Sánchez is not solely responsible for the PSOE’s electoral debacle—going from 48 percent of the vote in the 1980s to 22 percent today. Like social democratic parties across Europe, from Greece’s PASOK party to the Socialist Party in France, it is collapsing in the face of escalating social anger over its reactionary policies.

After the 2008 crisis, the PSOE imposed deep cuts to public expenditure and wages, including labour and pension “reforms,” laying out the main lines of the policies later pursued by PP governments. With PP support, it enshrined austerity in article 135 of the Constitution, which prioritizes the repayment of debt over social expenditure. It sent the Army to break an air traffic controllers’ strike in December 2010.

After the PP came to office in 2011, Sánchez was brought in as a transitional figure within the PSOE to give the old policies a new face.

This changed after two straight elections, in December and June, both produced hung parliaments. International financial circles started to raise concerns over Spain’s lack of a government, which prevented it from signing onto further austerity measures in an agreement due October 15. Germany and France did not invite Spain to any of the key post-Brexit negotiations.

After Sánchez voted against Rajoy’s election, the offensive to remove him began, led by the PRISA group, the strongest traditionally pro-PSOE media group. PRISA-owned El País started a campaign that intensified when Sánchez called for primary elections to validate his “no” against Rajoy. Such a step, if successful, would have kept the PSOE from abstaining in the short term and thus blocked the formation of a PP government.

On Wednesday, 17 members of the PSOE executive committee resigned after González denounced Sánchez for not abstaining in the second parliamentary vote and allowing the PP to come to power.

On Thursday, Susana Díaz stated that the priority was “first a government in Spain, and then we will open a debate in the PSOE.” Similarly, former general secretary and El País editorial board member Alfredo Pérez Rubalcaba said, “First, a government in Spain, and after, the problems of the PSOE.”

The ouster of Sánchez is a major strategic experience for the Spanish and international working class, showing how the financial oligarchy and the strategic needs of the ruling class dominate the internal life of the bourgeois parties. In the face of overwhelming public opposition to austerity, the PSOE is moving to ruthlessly implement the agenda of the banks and the military and intelligence agencies.

Sánchez’s political strategy was not significantly different from that of González. Earlier this year, he hoped to form a government alliance with the right-wing Citizens party and attract support also from the pseudo-left Podemos party. Podemos was deeply split over this proposal, however. Ultimately, the bourgeoisie decided to try to use the PSOE to bring the PP, not a Citizens-PSOE coalition, to power.

The anti-Sánchez putsch further exposes the reactionary role played by Podemos, which has applauded the austerity measures carried out against the working class by its Greek ally, Syriza. The factions around Podemos leader Pablo Iglesias, who opposed Iñigo Errejón’s plans to support a PSOE-Citizens alliance, nonetheless entirely oriented to the PSOE. They did everything in their power to spread illusions that a Podemos alliance with regional nationalist parties and with the PSOE would be a vehicle for “social change.”

As the González-led putsch has now made clear, Podemos’ chosen ally is a reactionary tool of a ruling class determined to impose its austerity policies in the face of overwhelming popular opposition.