Spain set to vote in new government to sort out financial woes

The partial count showed the PP was securing an absolute majority in the lower house of parliament, with 182 seats after yesterday’s vote.

The Socialists, in power for more than seven years, had 29 per cent of the vote or 111 seats in the lower house, the interior ministry said.

The vote came as Europe is engulfed in a debt crisis that is causing financial havoc across the globe, and polls showed that Spain was poised to become the third European country in as many weeks to throw out its governing party, following Greece and Italy.

Ireland and Portugal – which like Greece received huge bail-outs to avoid default – have also seen their governments change hands because of the crisis.

While opposition leader Mariano Rajoy and his Popular Party were expected to win control of parliament and beat the ruling Socialists, Mr Rajoy has said little – other than lower taxes on small- and medium-size companies – on what his party would do to fight Spain’s 21.5 per cent jobless rate and precisely what kind of austerity measures he would enact.

A win for Mr Rajoy, 56, would bring the conservatives back to power after nearly eight years of rule by Socialist prime minister Jose Luis Rodriguez Zapatero.

On social policy, Mr Zapatero put a patently liberal stamp on traditionally Catholic Spain by legalising gay marriage and ushering in other northern European-style reforms.

But on economic matters he has been widely criticised as first denying, then reacting late and erratically, to Spain’s slice of the global financial crisis and the implosion of a property bubble that had fuelled Spanish GDP growth robustly for nearly a decade.

Mr Zapatero slumped so badly in popularity that he decided not to 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.

Unlike Italy and Greece, which recently replaced their elected governments with technocrats with vast financial expertise in an attempt to better cope with the euro crisis, Spain will end up with a career politician no matter who wins.

“I am ready for whatever Spaniards may want,” said Mr Rajoy after casting his vote yesterday.

Mr Rubalcaba, 60, urged his supporters not to let a low turnout reduce his Socialist party’s chances.

“The next four years are going to be very important for our future,” he said. “The big decisions that have to be taken must be made by citizens, so it’s important to vote,” he said.

In Barcelona, Juan Sanchez said he had voted for Mr Rajoy’s party because unemployment fell while it was in power from 1996 to 2004, while it has rocketed to nearly five million people under Mr Zapatero.

“Hundreds of small and big businesses have closed down,” he said.

But Spain’s Socialists fear that the Popular Party will cut spending so deeply that it will hit Spain’s social welfare system hard and hamper chances for economic recovery.