Spain’s ruling Socialists will not be partying for long. A second successive term in office, with an ex­panded majority, is a personal victory for José Luis Rodríguez Zapatero, the prime minister. But there is little else to celebrate. After an uninspiring first four years in office, Mr Zapatero now faces the daunting task of rescuing an economy that is heading for the rocks. If ever there were a general election worth losing, this was probably it.

The election result, while short of an absolute parliamentary majority, means Mr Zapatero can at least hope for a return to normal politics.

The rightwing opposition Partido Popular, which never became reconciled to losing the 2004 election in the wake of the Madrid train bombings, can no longer cast doubt on the legitimacy of the Socialist government. Mariano Rajoy, the PP’s unconvincing leader, should step aside. This would allow his successor to seek bipartisan accords of state and draw a line under the four years the party has spent trying to paralyse the government through attempted constitutional challenges.

Mr Zapatero can draw confidence from a strong Socialist performance in the Basque country and the dismal showing of small parties. Amid economic uncertainty and resurgent Basque terrorism, voters rejected regionalism and opted for stability.

The government’s priority will be to steer the economy, weakened by the end of cheap credit and a sharp property slowdown, out of danger. A budget surplus amassed by Pedro Solbes, the veteran finance minister, will pay for tax cuts of €400 per person and a public works programme to recycle rising numbers of unemployed immigrants. The hope is that this will be enough to prop up growth and avert recession.

Mr Zapatero’s optimism is misplaced. Neither of these policies of­fers the panacea Spain needs. It will not take long to fritter away a €20bn fiscal surplus, equivalent to about 2 per cent of gross domestic product. Any boost to the economy from tax cuts and railway building is bound to be temporary. It will do nothing to address Spain’s economic fragility.

Its dependence on a construction boom and high private sector debt make Spain acutely vulnerable. Tax cuts will not help the 400,000 immigrants who are already out of work. It is unrealistic to expect to redeploy many of these workers when overall unemployment is rising.

Rather than pray for a tax and spending miracle, Mr Zapatero requires a bolder agenda to improve productivity. This would tackle a neglected education system and dismantle barriers to competition. Without these reforms, his second term risks being a damp squib.