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Popular Party promises more pain in Spain after predicted election victory

Reuters/Miguel Vidal

Spain is set for “cuts everywhere”, according to the leader of the right-wing Popular Party (PP), which expects to win a convincing win in Sunday’s general election. The Socialist Party, PSOE, is predicted to pay the political price of the country’s debt crisis.

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Voters turned out Sunday, despite heavy rain, with opinion polls giving Mariano Rajoy’s PP a massive 15 per cent lead over PSOE.

Dossier: Eurozone in crisis

Hit by the eurozone debt crisis that has recently toppled Greece’s George Papandreou and Italy’s Silvio Berlusconi, as well as the governments of Ireland and Portugal, Spain faces a 21.5 per cent jobless rate, economic stagnation and deep spending cuts.

The 36 million-strong Spanish electorate will choose 350 members of the lower house Congress of Deputies and 208 members of the Senate.

Ouotgoing prime minister Jose Luis Zapatero has been replaced by Alfredo Perez Rubalcaba to lead PSOE’s election campaign.

Rajoy is “completely lacking in any charisma and cultivates a sober, if not boring, image”, according to RFI’s Piotr Moszynski, and owes his support to disillusion with the government.

He has vowed to make cuts "everywhere", except for pensions, so as to meet Spain’s target of cutting the public deficit to 4.4 per cent of gross domestic product in 2012 from 9.3 per cent last year.

Spain’s risk premium - the extra interest rate investors demand compared
with safe-haven German debt - shot to a euro-era high of more than 500 basis
points in the days leading up to the election.

Zapatero's government enacted unpopular austerity measures last year, cutting public sector wages by an average 5.0 per cent, freezing pensions and raising the retirement age from 65 to 67.

A nationwide "Indignados" protest movement erupted in May 2011 to vent anger over the high jobless rate and political corruption. It was one of the movement's that inspired the current Occupy protests in the US and elsewhere.

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