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Spain's Catalan election brings relief for Rajoy

Monday, Nov 26, 2012 - 02:12

Nov. 26 - Separatists in Spain's Catalonia won regional elections on Sunday but failed to get a resounding mandate for a referendum on independence, which had threatened to pile political uncertainty on top of Spain's economic woes. Hayley Platt reports.

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A smile from Spain's Prime Minister as he visited his party's headquarters - or was it relief? Catalonia's regional elections at the weekend weren't as bad for Mariano Rajoy as they could have been. Two thirds of the votes went to separatists but they were split across four parties. The current Catalan President, although in favour of independence, was punished for implementing unpopular spending cuts It will now be difficult for him to lead a united drive to hold a referendum - when the law currently forbids it. Klaus Jurgen Nagel a professor of political science in Barcelona also believes Catalonia could now be hard to govern. (SOUNDBITE) (English) PROFESSOR KLAUS JUERGEN NAGEL, SAYING: "The new parliament is more radical than it was before on the Catalanist side but also on the Spanish nationalist side. So we have a parliament far less easy to handle by any government." Catalonia generates a fifth of Spain's GDP. But its public deficit has soared and it - like the rest of Spain - has had to introduce tough austerity measures. It blames Madrid for the country's woes and wants to control its own finances. Thomas Costerg from Standard Chartered says that would be a disaster for a country struggling with recession. SOUNDBITE: Thomas Costerg, Standard Chartered, Economist, saying (English): "Clearly it does raise some broader issues about whether those regions are able to implement the decisions they can in Madrid. But you have other issues which are different to the political picture. You still have a very weak economy, it is quite likely that early next year they will have to seek a bailout so as to get yields down." Rajoy may have escaped this time but anger on the streets continues to grow. Health workers were the latest to protest in Madrid. As the demonstrations took place Spain's economy minister said he will be asking for 40 billion euros of European aid for troubled banks. It'll come from funds already agreed. There's still no sign of a full bailout request - but many still believe it's only a matter of time.

Spain's Catalan election brings relief for Rajoy

Monday, Nov 26, 2012 - 02:12

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