* Centre-right People's Party expected to win big
* Voters angry over the economy
* Likely new prime minister, Rajoy, pledges swift action
By Fiona Ortiz
MADRID, Nov 18 Spain's likely new leader,
centre-rightist Mariano Rajoy, pledged on Friday to restore
confidence to the troubled economy and boost business after a
parliamentary election in which voters are set to throw out the
Opinion polls ahead of Sunday's election show the People's
Party, led by Rajoy, has a double digit lead over the
Socialists, widely seen by Spaniards as having mishandled the
response to the mounting euro zone debt crisis.
Spain will become the latest precarious euro zone country to
replace its leadership, following Greece, Ireland, Italy and
Economic woes have dominated the campaign, with more than
one in five workers out of a job, a recession looming and
government borrowing costs soaring to levels that forced other
euro zone countries to resort to international bail-out funds.
Rajoy, a cautious former interior minister, will not be
sworn in until around Dec. 20. But before that he is expected to
try to calm financial markets by laying out the details of how
he will shrink the public deficit and reform the economy to make
it more competitive in the medium term.
"The worst thing is the doubts hanging over Spain, the lack
of confidence. My fundamental objective is to provide that
confidence," Rajoy said on Friday morning on Onda Cero.
He will name economy heavyweights to his cabinet and
immediately implement tax cuts for small companies that hire.
"We need a shock plan for entrepreneurs," he said.
"There are going to be specific measures from the start for
entrepreneurs and there is going to be a clear message from the
government that we're counting on them, with the help of the
government, to steer us out of this crisis by creating
Rajoy will have little time to act. Spain sold a 10-year
government bond on Thursday with a yield of almost 7 percent.
That high a borrowing cost has forced other countries into
seeking international aid.
However, investor concerns over European government debt
have shifted to Italy and France, which means that unless the
euro common currency area comes up with a big picture solution,
Rajoy may not be able to save Spain from a fiscal meltdown.
Austerity measures have provoked violent protests in Italy
and Greece. Demonstrators have also taken to the streets in
Spain although events have generally been peaceful.
On Thursday night, thousands of teachers and students
marched in Madrid and other cities to protest against job and
budget cuts in public education.
Prime Minister Jose Luis Rodriguez Zapatero announced
earlier this year he would not run for a third term as his
approval ratings sank in tandem with employment.
The Socialists chose veteran politician Alfredo Perez
Rubalcaba as their leader for the campaign, but he has struggled
to differentiate himself from Zapatero, since he served in his
cabinet for years, most recently as his deputy.
Rubalcaba spent the last week of the campaign trying to get
out the Socialist vote, not to win, but to prevent the PP taking
an absolute majority in Parliament.
"I'm worried that the right takes over with absolute power,"
he said in an interview published on Friday in El Pais
Spain's economic trouble dates to after it joined the euro
in 1999 and a flood of cheap credit led to a housing
and building glut. When the property market crashed in
2007 the government, companies and consumers all found
themselves over their heads in debt.
At first Zapatero tried to spend his way out of the economic
crisis but he reversed tactics and drastically cut spending
after the euro zone crisis claimed Greece as its first victim in
Spanish austerity measures, along with bail-outs and forced
recapitalization of banks, so far have been successful in
keeping the country from following Portugal and Ireland into
But they also aggravated unemployment. In 1.4 million
households no one has a formal job, and consumer groups say a
million homeowners are at risk of having their property seized
by the bank.
"In this situation you've got to vote for a change of
government to see if they can turn the situation around. In
almost every Spanish family there are people in trouble," said
Manolo, 61, a retired driving instructor standing outside an
unemployment office in Madrid. Inside, his daughter, an
out-of-work social worker, lined up for benefits.
In May this year young Spaniards fed up with rescues for the
banks but no future for themselves, took to the streets in the
"Indignados" (or Indignant) movement, which inspired the global
Occupy Wall Street protests.
The Indignados urged voters to turn their backs on both of
the main parties but they did not call big marches before
Sunday's parliamentary election. However, protests could start
up again soon if Rajoy's spending cuts bite into public health
and education, or pensions.