Oct
18
Prime Minister Mariano Rajoy may
hold on to power in his home region of Galicia even as fallout
over austerity saps his support elsewhere, in local voting that
may ease an obstacle to a Spanish bailout request.
The People’s Party may hold on to its 38 seats in the 75-
member regional assembly in voting this weekend, maintaining the
majority it’s held since 2009, a poll by the state-run CIS
indicated on Oct. 5. If it falls short, Socialists and Galician
nationalists would seek to govern in a coalition. The Basque
Country, where the PP has never won an election, also votes on
Oct. 21, and polls signal nationalists in the lead.
Rajoy, who flies home from a European summit in Brussels
today to give the closing campaign speech in Galicia, is
counting on the outcome to show he can still win votes even
after implementing the deepest budget cuts in three decades. The
end of the campaign may also reduce political pressure on the
premier to delay a European bailout request and free his hand to
make deeper deficit cuts.
“If they keep their majority, Rajoy’s first message will
be we can implement austerity and still win elections,” said
Antonio Barroso, an analyst at Eurasia in London and former
Spanish government pollster. “He’ll gain breathing space.”
Protests, Strikes
Rajoy is implementing about 100 billion euros ($131
billion) of budget cuts, prompting street protests and a threat
by unions to stage the second general strike since he came to
power in December. Galicia, run by the PP’s Alberto Nunez
Feijoo, has one of the smallest deficit of the 17 regions and
isn’t tapping the central government’s bailout fund for cash-
strapped states.
Even after cutting spending, Feijoo has the backing of 35
percent of Galicians for the president’s job compared with 12
percent for Socialist leader Pachi Vazquez, the CIS poll showed.
Support for the PP is even stronger in other surveys. A
poll by Sondaxe for the Voz de Galicia newspaper indicated the
PP would win 39 seats, clearing a majority, and a poll for
national newspaper ABC showed they would win 40-41 seats.
The end of the campaign may also remove one obstacle to
Spain seeking a European bailout, said Alejandro Quiroga, a
political scientist at Newcastle University in the U.K. and
Alcala de Henares University in Madrid.
Budget Delay
“It’s the same thing as they did with the Andalusian
elections, not presenting the budget until after the vote,” he
said in a telephone interview.
The 2012 austerity budget was presented on March 30, three
months after Rajoy came to power and five days after the PP
failed to clinch a majority in Andalusian elections that polls
had indicated it would win.
Rajoy has spent more than two months mulling a decision on
whether to request ECB bond buying to bring down Spain’s
borrowing costs. Even with the yield on the country’s benchmark
10-year bond near a seven month-low, the country still pays 371
basis points more to borrow than Germany.
The elections may have also led the national government to
postpone until next month a decision on whether to raise
pensions in line with inflation. The government has signaled it
would do so even as the Bank of Spain urges it not to risk
blowing out the budget by adding 3 billion euros to this year’s
pension bill.
Aging Population
Galicia, which is holding elections four months ahead of
schedule, has the second-oldest population in Spain. The 600,000
Galicians over the age of 65 make up more than a fifth of the
region’s population, data from the National Statistics Institute
show. The PP’s margin of victory over the Socialists in 2009,
including non-residents who can vote, was 264,939.
Rajoy hails from Galicia, Spain’s fifth-biggest region by
population and home to the late founder of the ruling PP, Manuel
Fraga. It has been governed by the PP for most of the last three
decades and Feijoo is seen as a possible successor to the
premier.
After elections on Oct. 21 and a Nov. 25 poll in Catalonia
that will focus on whether the region should seek independence
from Spain, Rajoy won’t have to go back to the campaign trail
until 2015.
“This frees him up a bit and clears his path,” Barroso
said.
To contact the reporter on this story:
Emma Ross-Thomas in Madrid at
erossthomas@bloomberg.net;
To contact the editor responsible for this story:
Craig Stirling at
cstirling1@bloomberg.net
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