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April 13, 2012 5:52 pm
José Luis Rodríguez Zapatero, Spain’s Socialist former prime minister, was in power for more than four years before he experienced a collapse of international confidence in his government. For Mariano Rajoy, his centre-right successor, it has taken less than four months for the doubts to materialise.
Mr Rajoy replaced Mr Zapatero in December after leading his Popular party to the biggest election victory in its history, but by this week he was already on the defensive, denying that Spain needed a financial bailout like those required by Greece, Ireland and Portugal.
“Talking about a rescue makes no sense,” a frustrated Mr Rajoy said during a visit to Poland after a sharp fall in the price of Spanish and Italian sovereign bonds. “Spain is not going to be rescued, Spain can’t be rescued. There’s no intention, and no need and so Spain will not be rescued.”
PP voters did not think it would come to this, at least not so soon. Mr Rajoy, a 57-year-old career politician from Galicia, was never regarded as charismatic, but his supporters saw him as a competent manager who would restore order to Spain’s public finances and win the confidence of European leaders and foreign investors.
Within days of taking office, his ministers had announced a €15bn emergency package of public spending cuts and tax rises, unveiled a €50bn plan to clean up the balance sheets of Spanish banks and embarked on a long-awaited reform of the country’s inflexible labour laws. A general strike on March 29 passed without significant incident.
But bad economic news in the eurozone and the government’s own errors have conspired to dent the government’s credibility at home and abroad.
“There’s no single voice explaining clearly to the citizens what’s going on,” says Manuel Arias Maldonado, politics professor at the University of Málaga. “I think Rajoy lacks the qualities needed for this job – to be self-possessed and clear, and to transmit the confidence that is needed now.”
José Luis Alvarez, a professor at the Esade business school, says Mr Rajoy, directly elected with a clear majority, at least enjoys a political legitimacy that his counterpart Mario Monti lacks in Italy. But Mr Rajoy seems to have copied Mr Zapatero in choosing the “path of least resistance” rather than launching bold reforms. “There’s a general disenchantment . . . because nothing has changed. The only thing that’s changed are the managers.”
Investors want to know if Spain needs EU bailout money to recapitalise its banks and whether the central government will rein in spendthrift autonomous regions. European leaders, meanwhile, are wondering whether Mr Rajoy can fulfil his promise to cut the budget deficit by more than €30bn before December, reducing it from 8.5 per cent of gross domestic product in 2011 (an unwelcome legacy from Mr Zapatero) to 5.3 per cent this year.
Opinion surveys show that voters, even those who voted for the PP, remain pessimistic about the situation and about Mr Rajoy’s ability to improve it.
For many Spaniards, Mr Rajoy’s biggest mistake so far has been to waste valuable weeks – which could have been spent restoring public finances – by delaying Spain’s 2012 budget until after the March 25 regional election in Andalucía. The PP plan was to delay the bad news about austerity until after the party had won over cautious Andalucían voters, and then bring the region to heel. But the tactic failed when the left retained power.
“The government missed a chance by delaying the budget,” said the chief executive of one Spanish company this week, lamenting the depressed state of the domestic economy. “We [in business] are not having fun at the moment.”
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