Election Special: Spain

Result of parliamentary election on November 20 hangs on who voters believe can cut the deficit and create jobs.

Spain will be unlikely to meet it's public deficit target for 2011 reports The Guardian. If figures released for the first half of the year are indicative of the country's performance for the second half then, given borrowing needs, the "chances of bringing the deficit down from 9% to 6% were slim", Angel Laborda of Funcas, a savings bank federation, told the newspaper. Spain appears set to trim a bit more than a single percentage point, according to these calculations. However, Spanish analysts had projected that a figure of 6.5% could be met.

José Luis Rodríguez Zapatero, the Socialist prime minister, has "staked its creditibility" on hitting deficit reduction targets, says The Guardian. But poor growth and profligate regional governments are being blamed. The opposition conservative People's Party (PP) has pledged to meet targets, but then so had the current Socialist finance minister, Elena Salgado, who has "repeatedly vowed to meet this year's 6% target".

The whole process is hugely unpopular, with Madrid's Puerta del Sol square filling with workers and supporters of the 15-M Movement protests. Yet Spanish unemployment is rising relentlessly, adding another 50,000 to dole queues in August alone. 45% of the youth and over 20% of the total workforce are out of work, figures which probably surpass all other European countries. Unemployment is always high in Spain, but has risen further since the construction boom ended.

The PP is set for victory, but reducing unemployment while tightening budgets is a tough call. The party has been ahead in opinion polls since around April 2009 and its leader, 56-year old Mariano Rajoy enjoys significant support. But the gap between the big-tent parties is narrowing and a hung parliament may result.

The socialist PSOE elected a new leader in July when Interior Minister Alfredo Pérez Rubalcaba took over. An ex-chemistry doctor and education minister, 60-year old Rubalcaba resigned his latest portfolio mid-year to focus on the general election campaign.

The third and fourth placed parties both command up to 5% of total support. They are:
  • the anticapitalist hard left socialist IU or United Left
  •  the CiU or Convergence and Union, a Catalan regional party headquartered in Barcelona which is fiscally right-wing yet socially centrist.
Clearly, a PP/CiU coalition would be discussed should the People's Party fail to achieve an outright majority. 

The PP has been out of power since José Maria Aznar's government fell at the 2004 election. Mariano Rajoy held education and interior ministry portfolios in that administration. It's return to power does not auger well for either Madrid's relations with the Basque Country (as the PP has persistently taken a hard line on Basque separatist aspirations), or for civil calm at a time when a popular movement commands such vocal support.

Yet the deficit has to be trimmed to meet the expectations of the Germans, the international investment community and credit agencies, and jobs must be created for the unemployed. Rajoy will have his plate full if he wins.

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