21 Nov 2011
- As much as any European election in recent memory, the political economy for the new Spanish conservative government looks extraordinarily limiting. New Prime Minister Mariano Rajoy will have – and will expect to have -no political honeymoon either domestically or in Europe.
- He will be well aware that his government will have to contain profound resentment and unrest on the Spanish street, manage the expectations of Spanish voters and impress Spain’s creditors enough to restore Spain’s battered credibility and credit rating.
- Rajoy’s PP conservative party has a unprecedented grip on both regional and national government, but the reality of austerity will be felt sharply at the regional level and the politics of this are likely to be complicated.
- In his first few months Rajoy face three immediate tests: the bond markets, the budget and the banks. It is hard to know which will be toughest. Rajoy electoral campaign has traded on calculated ambiguity. It is about to be replaced by painful specifics.
The views expressed in this note can be attributed to the named author(s) only.