Spaniards vote as right heads to crushing victory

20th November 2011, Comments 0 comments

Spaniards voted in rain-swept elections Sunday that were all but certain to hand a thundering victory to the right and topple yet another debt-laden eurozone government.

Bowed by a 21.5 percent jobless rate, economic stagnation and deep spending cuts, the first voters of the 36 million-strong Spanish electorate headed to polls ready to punish the ruling Socialists.

"Spain chooses a government to confront the crisis storm," blared the front page of the leading centre-left daily El Pais.

"Spain stakes its future," headlined the conservative daily ABC over a picture of opposition Popular Party leader Mariano Rajoy and his wife walking with their dog.

Rajoy has a lead of about 15 percentage points over the Socialists, latest polls showed, enough for an absolute majority in parliament and a free hand to reform.

Octavio Arginano, a retired 67-year-old factory worker, said he voted for the right for the first time in his life.

"My son has been unemployed for over a year, my daughter earns just 600 euros ($800) a month looking after young children," he said as he left a polling station in the Madrid neighbourhood of Lavapies.

"There has to be a change although I am not sure anyone knows what to do to get us out of this situation," he said.

If the polls are right, Spain would become the latest of the so-called periphery eurozone nations to ditch its government, after the debt crisis toppled rulers of Ireland, Portugal, Greece and Italy.

Though considered uncharismatic even by many of his supporters, the 56-year-old Rajoy has galvanised support by promising a break from the past to fix the economy and create jobs.

Rajoy has given few details of his austerity plans but analysts say Sunday's winner must quickly impose reforms and cut costs to reassure world markets about Spain's determination to repay its debts.

Rajoy has vowed to make cuts "everywhere", except for pensions, so as to meet Spain's target of cutting the public deficit to 4.4 percent of gross domestic product in 2012 from 9.3 percent last year.

"We are going to comply with our deficit obligations," he said Friday.

Spain's risk premium -- the extra interest rate investors demand compared with safe-haven German debt -- shot to a euro-era high of more than 500 basis points in the days ahead of the vote.

Prime Minister Jose Luis Rodriguez Zapatero's government is blamed for reacting too slowly to the 2008 property market crash, which threw millions of people out of work.

His government enacted austerity measures from last year that bled further support, cutting public sector wages by an average 5.0 percent, freezing pensions and raising the retirement age from 65 to 67.

A nationwide protest movement erupted in May to vent anger over the high jobless rate and corrupt politicians, accusing the authorities of favouring big business and banks over ordinary people.

Hundreds of "indignant" protesters rallied in Madrid in the days leading to the vote. Much larger protests are expected once a new government begins taking an axe to spending.

Zapatero, 51, bowed out of the election battle after two terms and nearly eight years in office.

The Socialists' new standard bearer, 60-year-old Alfredo Perez Rubalcaba, has warned voters that the right will cut health and education.

But latest polls show his party is headed for a thrashing.

Whoever wins, and whatever action they take, some analysts say the answer to Spain's problems lies beyond its borders.

Barclays Capital said Spain will likely need the European Central Bank to step up its support.

"Another round of labour market reforms, banking sector restructuring and enhanced fiscal consolidation are the likely priorities for the new government," it said.

"Those policies would undoubtedly be welcomed by markets, yet may not be enough to stabilise the Spanish sovereign. Ultimately, we think it likely that the ECB will need to step up its support."

© 2011 AFP

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