FACTBOX-Main issues in Spain's parliamentary election

March 9 (Reuters) - Spain is holding a parliamentary election on Sunday. Opinion polls show the ruling Socialist party of Prime Minister Jose Luis Rodriguez Zapatero leading the opposition conservative Popular Party (PP).

Following is an overview of how the parties plan to tackle the key issues that could decide the vote in the eurozone's fourth biggest economy, where 45 million people live.



SLOWING ECONOMY

The economy was previously one of the government's strongest cards thanks to record low unemployment and to growth rates that took Spain past Italy in per capita purchasing power.

A global credit squeeze on an already cooling property market could push economic growth down from 3.8 percent last year to near 2.0 percent this year, economists say. Consumer confidence has been at all-time lows in the last few months, although it rebounded in February.

With household debt at 130 percent of annual income and interest rates rising, many people are already struggling to meet mortgage repayments. Spaniards are also complaining about racing food and fuel prices, which pushed inflation to 4.4 percent in February.



IMMIGRATION

The number of foreigners registered as living in Spain has grown from under 1 million people in 2000 to over 4 million today, or 9 percent of the population -- most of them from Morocco, Eastern Europe and Latin America.

Popular Party leader Mariano Rajoy has linked immigrants to rising crime and blamed them for strains on the welfare state. He also wants restrictions on Muslim headscarves. Under a PP government, foreign immigrants would have to sign a contract promising to adopt Spanish customs.

The PP wants to step up repatriations of illegal immigrants, and introduce a new points system for legal immigrants. This would favour skilled workers and make it easier for people from countries with historic links to Spain to move there.

The Socialists promise to work with foreign countries to ensure orderly arrivals, and say they plan to expel foreigners convicted of violent offences.



BASQUE VIOLENCE

How to defeat the violent Basque separatist group ETA was the most divisive issue during the last parliament, and the issue came to the fore again on Friday with the killing of a former Socialist politician in the Basque Country.

Although both parties opted not to make political capital out of the murder, widely blamed on ETA, the PP has in the last four years attacked Zapatero's government for making peace overtures to the separatists. The PP says it would clamp down harder on political parties suspected of links with ETA.

Zapatero says the PP has done nothing but weaken the government's hand, in contrast to his own support when he was opposition leader, but that he would not talk to ETA during the next legislature.



JOBS

Unemployment is rising faster than anywhere else in Europe -- hitting 8.6 percent in January and expected to rise above 9 percent this year. The property sector, which employs around a fifth of the workforce, has been especially badly hit by the economic downturn. Real wages have been static over the past decade, despite an economic boom.

The Socialists say they will create 2 million new jobs and increase the minimum wage to 800 euros ($1,200) a month by 2012 from 600 euros today. The PP promise 2.2 million new jobs.



HOUSING

Although house prices are now falling, millions of Spaniards -- particularly young people -- have been elbowed out the market as average property prices have tripled in the last decade.

The Socialists promise 1.5 million new subsidised houses over the next 10 years while the PP says it will promote the construction of 2 million homes costing less than 160,000 euros ($240,000).



RELIGION AND SOCIETY

The Zapatero government has in the last four years legalised gay marriage, made divorce easier and pushed through gender equality laws -- all measures opposed by the PP.

Relations between the Socialists and the Roman Catholic Church -- strained by the government's liberal agenda and measures to reduce the importance of religion in schools -- have also heated up the campaign. In January, the Church's governing body in Spain urged people not to vote for political parties that negotiate with ETA, a direct swipe at the Socialists.

The government has said it will study making abortion easier if it wins on Sunday, and double paternity leave to one month. The PP would also extend maternity and paternity leave.



TAX AND PENSIONS

The PP wants to reduce income tax for all workers and eliminate it altogether for more than 7 million people, including those who earn less than 16,000 euros. It would also end Spain's wealth tax, levied on possessions and savings.

The Socialists have promised tax rebates of 400 euros for workers and pensioners, and to scrap inheritance tax on legacies under 60,000 euros. (Reporting by Ben Harding; Editing by Kevin Liffey)