Spain ousts Socialists for center-right government

By Henry Chu, Los Angeles Times

Nov. 20, 2011 12 AM PT

Reporting from London — Spanish voters chucked out their ruling party Sunday in favor of a new center-right government that they hope will revive their moribund economy and keep Spain from being sucked into the vortex of Europe’s relentless debt crisis.

The Socialists, who have governed the country since 2004, were resoundingly defeated by the Popular Party, which will now enjoy a commanding majority in parliament. The drubbing added to the cascade of leaders and governments in Europe that have fallen within the last year — Spain’s turnover is the sixth — because of the crisis threatening the survival of the euro.

The Popular Party won 186 seats in the 350-member parliament, far ahead of the second-place Socialists’ 110.

The lopsided outcome means that the ascendancy of Socialist parties on the Iberian Peninsula is now over. In June, voters also ousted the Socialist government in Portugal, one of three nations forced to seek bailouts because of the euro debt crisis.

Mariano Rajoy, Spain’s incoming prime minister, will have little time to bask in his party’s return to power after seven years in opposition.

Unemployment has pushed past 21% and is particularly acute among the young, about half of whom are out of work. Global investors have rushed to unload Spanish bonds for fear the country won’t pay its debts; they are unlikely to heed Rajoy’s plea last week to give him “more than half an hour” to tame public spending and overhaul the economy to make it competitive again.

“There will be no enemies for me but unemployment, the deficit and the excessive debt,” Rajoy declared after returns showed his party’s unequivocal win.

“Today we celebrate,” he said. “Tomorrow is another day, and we will have to apply ourselves to the task.”

Seen as a bookish, uncharismatic leader, Rajoy studiously avoided making specific promises or outlining an action plan during the election campaign, preferring to surf the wave of public anger at the incumbent Socialists.

But analysts say his government will probably pursue, and perhaps expand, the public spending cuts that the previous administration adopted last year, following the tough austerity recipe the global markets have demanded of fiscally wayward nations.

“No one has a real clear sense of exactly what they have up their sleeve.... I think they’ll take advantage of the first 100 days to cut as much as they can,” said Ken Dubin, a political scientist at Carlos III University of Madrid. “Spain has been a more applied pupil of international finance than any of the other countries that have come under threat in this euro crisis.”

Where the ax will fall is the question. Healthcare, education and pensions are prime targets.

Rajoy, 56, is also expected to try to move quickly to streamline Spain’s labor laws, blamed by many economists for driving up production costs and protecting older workers at the expense of the young. One likely goal is to restrict collective-bargaining rights, which will meet with heavy resistance from unions.

But Rajoy will have a strong hand because of his large majority in parliament. His Popular Party already scored major victories this year in regional elections, giving him a broad mandate across the country.

Austerity has been unpopular in Spain, and a mass movement of young people known as the indignados has organized huge demonstrations in Madrid to protest the lack of job prospects.

But there has been none of the violence that has marred protests and strikes in Greece, the epicenter of the debt crisis. And though the Popular Party is expected to pile on even more austerity, many Spaniards cling to the perception that the party is better at handling the economy than its rivals.

That belief will now be put to the test.

“Without a return to growth, it’s hard to see how Spain is going to dig itself out of debt,” Dubin said. “It’s the same problem that everybody has.”

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