Job-hungry Spaniards seen electing center-right

AP News
Posted: Nov 16, 2011 6:58 AM
Job-hungry Spaniards seen electing center-right

Another troubled European government will almost surely tumble this weekend as Spanish voters braving sky-high unemployment, the sting of austerity, piles of debt and a bleak future are expected to dump the ruling Socialists and hand their national mess to opposition conservatives.

Polls point to a crushing win on Sunday for the Popular Party led by Mariano Rajoy _ a gangly, uncharismatic man who lost the last two general elections, only barely survived internecine fighting to hold on as party chief and generally has a low popularity rating.

He would inherit a crisis of massive dimensions as bailout fears leapfrog around the eurozone's fringe, Spain included.

A win for Rajoy, 56, would bring the conservatives back to power after nearly eight years of rule by Prime Minister Jose Luis Rodriguez Zapatero, who on social policy put a patently liberal stamp on traditionally Catholic Spain by legalizing gay marriage and ushering in other northern European-style reforms.

But on economic matters Zapatero has been widely criticized as first denying, then reacting late and erratically, to Spain's slice of the global financial crisis and the implosion of a real estate bubble that had fueled Spanish GDP growth robustly for nearly a decade.

Zapatero slumped so badly in popularity that he announced this year he wouldn't run for a new term, and former Interior Minister Alfredo Perez Rubalcaba _ a veteran figure and powerful force within the party _ emerged as the candidate to succeed him.

Now, unemployment stands at 21.5 percent _ a 15-year-high _ and economic growth halted in the third quarter after several quarters of tepid expansion in Spain's slow recovery from recession. Spain's borrowing costs are dangerously high because of contagion from the eurozone crisis, and investor fears over Spain's growth prospects and the once wildly free-lending banking sector's exposure to the real estate debacle.

"For now, the left is washed up in Spain," said Antonio Sanz, 42, a Socialist supporter, salesman and father of two who has been unemployed for the past seven months. "We do not see any easy solution here because all around us is more of the same. We see Italy. We see Portugal. We see Greece and we are in the middle of that mess," said Sanz, standing in a cold drizzle after interviewing for a job that pays euro1,000 ($1,400) a month _ half what he used to earn.

The European sovereign debt crisis that began last year in Greece has necessitated huge bailouts for that country to save it from default, followed by rescues for Ireland and Portugal. Most recently it brought down the governments in Athens and Rome, with the departure of longtime and seemingly teflon-coated premier Silvio Berlusconi. Along the way, the governments of Ireland and Portugal also changed hands in elections.

Victory is sweet by any measure but Rajoy's position would hardly be one to envy if he does win, which even Perez Rubalcaba has seemed to take for granted.

Rajoy faces the dilemma of trying to lower Spain's budget deficit _ and thus boost investor confidence to reduce Spain's borrowing costs _ without cutting spending or raising taxes so much that it puts a brake on the already listless economy and drags it into another recession.

In his only pre-election debate with Rajoy, on Nov. 7, Perez Rubalcaba testily questioned if Rajoy is going take such austerity steps and did so speaking in the future tense _ as if the race were over and Rajoy the future prime minister. He said he thought Rajoy had a hidden and painful agenda he is not telling people about.

"If you said what you have in mind, not even your own supporters would vote for you," Perez Rubalcaba said.

Perez Rubalcaba's campaign seems clearly aimed at averting an outright stampede by Socialist supporters disillusioned with Zapatero's EU-mandated austerity program, and advocates a new tax on the super-wealthy and on banks, among other measures to free up money that would be used to encourage firms to hire.

The campaign has been dull and static, with Rajoy simply trying to avoid rocking the boat and coast to victory and Rubalcaba tainted by having been part of the government that led Spain to where it is now.

Even the bombshell announcement Oct. 20 by the weakened Basque separatist group ETA that it is giving up violence _ something for which Rubalcaba can rightfully claim some credit for his work as interior minister and thus head of the security forces _ failed to give the Socialists a boost.

In the last Parliament the Socialists had 169 seats in the 350-seat lower chamber and the PP 154. A Metroscopia poll released last weekend by the newspaper El Pais said the PP might jump to as many as 196 seats _ a record for that party in Spain's post-Franco democracy _ while the Socialists could plummet to as low as 110. In percentage points, the cushion is about 14. The margin of error in the telephone poll of some 9,700 eligible voters is 1.5 points.

Rajoy's platform includes plans for business tax cuts to encourage hiring and lower the country's staggering unemployment rate.

He has also said he will meet Spain's commitments to the EU on deficit reduction, although with economic growth at a standstill hardly anybody thinks the current government's goal of cutting it to 6.0 percent of GDP this year from 9.2 in 2010 is achievable.

More austerity and tens of billions of euros in spending cuts or tax hikes on top of ones Zapatero has undertaken are almost certainly on the way. But on the campaign trail, Rajoy has avoided specifics, so as not to scare away voters.

"We are going to have to be brave, but also prudent," he told the newspaper El Mundo. He said it was important to reassure investors here and abroad that they can trust Spain with their money.

"Outside Spain, the message is that we are serious people, that we are going to do things right," Rajoy said.