Spanish election: exit polls suggest landslide victory for People's party

Giles Tremlett Madrid

The conservative opposition People's party (PP) of Mariano Rajoy appeared to have won a landslide victory in Spain's general election todayyesterday, according to an exit poll shared by several television stations.

Rajoy had a lead of 14% over the socialists of outgoing prime minister José Luis Rodríguez Zapatero, enough to ensure an absolute majority in parliament.

State television TVE gave Rajoy's party between 181 and 185 deputies in the 350-seat lower chamber. The socialists, meanwhile, were on target for one of their worst defeats ever with between just 115 and 119 seats.

Exit polls have proved untrustworthy in previous elections, so it will not be clear until official results are through later tonight whether Rajoy has received a free hand to deliver reform and austerity in an attempt to save Spain's troubled economy.

Although the 56-year-old is an apostle of deficit control and liberalisation, he has been deliberately vague about his plans so as not to frighten off voters.

With yields on Spanish sovereign debt soaring to new highs at the end of last week he takes over a country in crisis.

He will come under immediate pressure from markets to reveal exactly how he intends to both kick-start growth and cut spending to meet next year's deficit target of 4.4%. Experts say he must find some €18bn through cuts or tax hikes.

Rajoy pleaded last week for markets to give him "more than half an hour", but has also said that his party already has clear plans.

PP spokeswoman Ana Mato confirmed that the party's own polling also gave them an clear majority. "The PP has won with an ample majority," she said. "Our only objective now will be to overcome unemployment and the crisis."

Rajoy is a former property registrar who held various ministerial posts in the governments of José María Aznar between 1996 and 2004.

Spaniards show little personal enthusiasm for the uncharismatic conservative, but had tired of Zapatero – who oversaw a dramatic economic slump that left growth at 0% and unemployment at 23%.

With Spain's sovereign debt yields last week approaching levels at which Portugal and Greece needed bail-outs, socialist candidate Alfredo Pérez Rubalcaba had little chance of extending the seven and a half year period of left-wing government under Zapatero.

The socialist prime minister had brought elections forward by six months and said he would not stand again.

Zapatero stays on as caretaker prime minister for another month, however, as parliament must meet and the king has to consult political parties before a new government is formed. Parliament does not sit until 13 December.

It was not clear how the caretaker government would coordinate its response to the ongoing sovereign debt crisis with Rajoy's future government, though it has promised to work with the PP.

Government spokesman José Blanco last week rejected calls by senior PP officials for the handover to be speeded up.

"The timings and calendar are determined by law and cannot be changed," he said on Friday.

Spaniards hope the change of government will calm markets that had increased pressure on the country's debt despite Zapatero's own austerity programme, which saw civil service pay cut and pensions frozen.

Deficit spending by regional government, which provide basic services like education and health, has also been squeezed, sending public service trades unions out in protest.

Zapatero has also extended the retirement age and changed the constitution to allow for a long-term deficit limit to be set on the budget. Rajoy has said one of his first measures will be to set that limit.

Rajoy's promises of major reforms, more austerity and strict deficit control are in tune with market demands and with those of Germany's Angela Merkel, the European Central Bank and the European Commission.

PP shadow finance minister Cristobal [acute o] Montoro has said the new government will act hard and fast, introducing reforms immediately.

Rajoy's must now name his future finance minister. He has made clear in the past that he is happy to choose someone from outside the party, so may end up naming a market-friendly technocrat.

Further spending cuts on top of those already imposed by Zapatero risk tipping the country into recession. They may also be energetically opposed by the peaceful 'indignado' movement that took over city squares earlier this year.

For the first time in decades, Spaniards voted without the threat of violence from Basque separatist group Eta, which declared an end to 40 years of terrorism last month.

Basque voters turned out in force and looked likely to send up to half-a-dozen avowedly separatist deputies to the new parliament.