WORLD -- November 22, 2011 at 10:32 AM ET
Spain's New Government Must Now Tackle Spending Cuts
Spain's leader of the opposition conservative Popular Party Mariano Rajoy. Photo by Cristina Quicler/AFP/Getty Images.
Spain's conservative Popular Party and its leader Mariano Rajoy -- the victors in last weekend's parliamentary elections -- now have the difficult job of implementing spending cuts for the sake of Spain's economy while keeping the public and markets on their side.
The results of Sunday's elections, which came as no surprise, gave the Popular Party 186 seats in the 350-seat lower house, up from 154 in the previous legislature. The ruling Socialist Party lost 59 seats to retain a total of 110, its worst-ever showing, reported the Associated Press.
The new government won't have much time to savor its win, however. Once Rajoy takes the helm, he will have to get an austerity plan in place that will placate the bond market and reduce the nation's debt situation, said Michael Goldfarb of GlobalPost, who reported from Spain on the elections.
And he "must somehow convince the bond markets to give him breathing space" to do so -- not a small task considering there will be a one-month transition period: Rajoy will not be sworn in until Dec. 20, followed by the Christmas break, said Goldfarb. "So the odds are that whatever cuts in government expenditure he plans won't be enacted in the Parliament until early January ... and the markets move much faster than that."
Spain's government turnover is just the latest sweeping Europe. Goldfarb likens the political leaders of nations at the periphery of the eurozone as "an endangered species." The only tool at their disposal is to cut government spending, which leads to higher unemployment and a likely public backlash, he said.
"This is particularly hard on left-wing parties like Spain's Socialist Party. Outgoing Prime Minister Jose Luis Zapatero put austerity plans in place and saw his own supporters refuse to vote for him."
Meanwhile, many Spaniards are feeling a sense of fatalism about the situation, Goldfarb said. "People who have jobs go about their business, and the one-fifth of Spaniards out of work are surviving through family networks and charity."