The conservative People’s party (PP) of Mariano Rajoy has swept to a landslide victory in Spain’s general election, inheriting sky-high unemployment and one of the shakiest economies in Europe. Rajoy’s PP gained an absolute parliamentary majority with a crushing 16 percentage point win over the Socialists of outgoing prime minister José Luis Rodríguez Zapatero.
The Socialists lost a third of their seats as voters dumped a government that presided over a dramatic economic slump which has left 23% of Spaniards out of work. With the PP winning 186 of the 350 seats in parliament, 56-year-old Rajoy was given a free hand to carry out sweeping reforms and impose further austerity in an attempt to turn the country around.
“It is no secret to anyone that we are going to rule in the most delicate circumstances Spain has faced in 30 years,” he said. He pleaded for time. “There will be no miracles,” he said. “We haven’t promised any.” With yields on Spanish sovereign debt reaching new highs at the end of last week, markets are unlikely to give him much breathing space. He will come under immediate pressure to reveal exactly how he intends to kickstart growth, which is currently at zero, and cut spending.
The burst housing bubble has left banks dangerously exposed to loans to real estate developers and construction companies. Unlike neighbouring Italy or Greece, which handed the reins of government to unelected technocrats in recent weeks, Spaniards have been able to choose the government they want to deal with one of the worst economic crises in living memory.