Spanish Prime Minister Jose Luis Rodriguez Zapatero won a vote in parliament on Thursday by the thinnest of margins, one vote, raising doubts about the government's ability to stay in power till 2012. The slim margin of the vote on the Socialist government's austerity plan highlighted challenges faced by Zapatero as he tries to push through tough spending cuts and labour reforms to prevent Greece's debt crisis spreading to Spain. Voter support is falling after pay cuts and a pensions freeze alienated the Socialists' public sector and working class base, unemployment stands at a massive 20 percent, trade unions are restive and Zapatero lacks political allies. An opinion poll in the left-leaning El Pais daily after the 15 billion euro in spending cuts was announced showed the conservative opposition Popular Party had opened up a nine point lead over the Socialists after being only slightly ahead for months. Only the Socialist PSOE party voted for the deficit-cutting package. The unpopular measures passed thanks to the abstentions of Catalan centre-right party CiU, Canary Island party CC and Navarra regional party UPN. “They are absolutely alone. They have their 169 votes and that's it. The vote was passed by one vote only because there were 13 abstentions,” said Juan Diez, political analyst at Analisis Sociologicos, Economicos y Politicos. Zapatero is already juggling the competing demands of the unions, traditional Socialist allies who want workers' rights to be maintained in a reform of rigid labour markets, and businesses that want the costs of hiring and firing to be cut. The government has been vulnerable since 2008 elections when the Socialists failed to achieve an overall majority, leaving them reliant on support from small, regional parties, such as the Catalan nationalist CiU. But now it is under even greater strain as it deals with huge international pressure to bring down its budget deficit which hit 11.2 percent of gross domestic product in 2009 while trying to pacify supporters at home. Labor reform, budget hurdles CiU parliamentary leader Josep Antoni Duran i Lleida said he would vote against the 2011 budget bill although his party abstained on Thursday, enabling passage of the austerity plan. CiU voted against the budget last year, but the government managed to scrape it through with the support of other minority parties. “It's already been having trouble getting majorities, I don't know if things have substantially changed for him from yesterday,” said Juan Carlos Rodriguez, analyst at consultancy Analistas Socio-Politicos. With the austerity package now on the statute book, Zapatero's next challenge is the reform of the labor market, seen as key to restoring Spain's competitiveness and returning the country to stronger growth. The government has set a deadline of May 31 for unions, the government and business groups to reach an agreement but with just five days to go, there is still no deal and the unions say major differences remain with employers. If no agreement is reached, Zapatero could decide to legislate unilaterally on the reform, something which could be tougher if he cannot count on a parliamentary majority. The biggest union confederation, CCOO, said on Thursday it would call a general strike if the government imposed labor reform by royal decree. Another small, but potentially important vote, is the setting of a spending ceiling for public expenditure in 2011 - the first step in next year's budget process. That vote is likely to take place some time in June. The 2011 budget, probably the biggest legislative hurdle facing Zapatero, will be presented around the beginning of December. Failure to get that through parliament would almost certainly mean the government would have to resign, leading to early elections. “It would have difficulty continuing,” said Rodriguez of consultancy Analistas Socio
