Grim first year for Spanish leader Mariano Rajoy

It has been a grim first year for Spanish Prime Minister Mariano Rajoy.

A year after he won power promising to fix the economy and create jobs, Spain has entered a second year of recession and the unemployment rate is at 25 percent.

So far, the right-leaning 57-year-old leader has fended off market pressure to seek a sovereign rescue.

But in any case his Popular Party government is pursuing a hotly protested campaign of spending cuts and tax increases to squeeze 102 billion euros ($130 billion) out of the Spanish budget by 2014.

In response, unions led a general strike on November 14 and hundreds of thousands of people poured into the streets in major cities, sporadically clashing with baton-wielding riot police.

On the night of his thumping November 20 win over the Socialists last year, Rajoy predicted that with the backing of the nation “Spain will be where we all want it to be — at the head of Europe”.

Indeed, the grey-bearded Galician seemed to have Spain at his feet as he led his Popular Party to its greatest electoral victory since democracy returned after the death in 1975 of General Francisco Franco.

But those days are long gone.

An October “political barometer” poll by Metroscopia for the El Pais daily found 71 percent of respondents disapproved of the prime minister’s rule, and 84 percent said he inspired little or no confidence.

“It is true that the measures we are taking hurt a lot of people,” Rajoy admitted in a news conference on Monday.

“But they are absolutely crucial,” he added.

Rajoy said the challenges this year had not taken the government by surprise.

“We knew 2012 would be bad, 2013 will be better and that in 2014 economic growth will return.”

This summer the prime minister reached out to his eurozone partners for a rescue loan of up to 100 billion euros to fix the banks, still bogged down in the aftermath of a 2008 property crash.

Rajoy tried to paint the rescue loan as a coup for Madrid, jetting off to watch Spain play Italy in the Euro 2012 football tournament the day doing the deal and declaring the crisis “resolved”.

But banks and home owners are still in deep trouble.

An outcry over soaring home owner evictions, linked to two recent suicides in the space of 15 days, led the government last week to declare a two-year halt to expulsions in the most extreme cases.

Now, many analysts are counting down to the moment when they believe the prime minister will be forced to seek a sovereign rescue, too.

To do so, Rajoy would have to submit to strict conditions in return for a European Central Bank promise to buy up Spanish bonds and curb the country’s formidable debt-refinancing costs.

As if that was not enough, the Spanish leader is fighting a rearguard action against independence stirrings in debt-laden Catalonia, which has called snap elections for this Sunday.

“To speak straight from the shoulder, Mariano Rajoy lacks leadership,” said Fernando Vallespin, political science professor at Madrid’s Universidad Autonoma.

“This is a political party man, as he has always been, not a statesman. But Spain needs a statesman,” he said.

Rajoy had an unenviable legacy when he was sworn in, in December last year, with the economy already sliding into its second recession since the housing bubble popped and unemployment surging.

But the premier, a lawyer by training who vowed transparency after the “lies” of the previous Socialist government, is also criticised for failing to deliver a clear message.

When the government adopted a tight-fisted 2013 budget, for example, it promised to meet its target of curbing the public deficit to 6.3 percent of economic output.

But just two days later, it admitted that the cost of the banking rescue would push the deficit to 7.4 percent.

Every European Union official that visits Madrid praises its efforts to fix the Spanish finances and enact economic reforms, said political analyst Anton Losada.

But “his government is seen as opportunist and unreliable,” Losada said.

“He says one thing to Brussels and another to Madrid. How can he for example promise he will keep to the deficit forecast and at the same time promise to raise pensions?”