Spain's regional and municipal elections on May 22 are expected to deal a severe blow to the ruling Socialists as voters blame them for persistent high unemployment and a struggling economy, according to Reuters. The results would put the conservative opposition Popular Party (PP) in power in most of the country's regional legislatures and city councils, even in traditional left-wing strongholds. They may also weaken Prime Minister Jose Luis Rodriguez Zapatero's ability and resolve to implement measures quickly to curb the deficit, and could even increase the chance of an early general election, due by March 2012. Zapatero is unpopular after implementing reforms to trim the deficit, trying to dodge a fiscal crisis that could force Spain to follow other euro zone countries in seeking a rescue. Many economists say worse-than-expected regional budget figures could start to trickle out after Sunday's vote. But it is unlikely regional budget holes will be sizeable enough to make the government miss its target to cut the public deficit to 6 percent of GDP this year. Below are two possible scenarios from the May 22 vote. PP WINS KEY POLLS, EARLY GENERAL ELECTION PRESSURE If the PP takes key Socialist regional strongholds such as Castilla-La Mancha or Extremadura, as is most likely, it will further weaken a national Socialist government ruling in minority. Opposition politicians will interpret such a result as evidence of lack of confidence in the government and a taster of a Socialist drubbing in a general election next year. The PP will undoubtedly renew calls for Zapatero to resign, although its ability to force his resignation via a motion of censure is limited under operating rules of Spain's congress. Furthermore, smaller regional party support of the Socialists in parliament is not expected to be withdrawn. This result has two possible consequences: 1. Zapatero's own party could force him out after June, when they are expected to choose their candidate for the premier in the next general election. Zapatero's popularity has plummeted while the economy has stagnated and he announced last month he would not run for a third term. An unknown could emerge in Socialist primaries, a repeat of Zapatero's own debut on the national political scene in 2000. If the Socialists sense that a new candidate has a chance of winning a national election, they could force early elections, perhaps as soon as September or October. That would make political capital of an expected decline in unemployment over the peak tourist season, and perhaps an improvement in consumer confidence. 2. Poorer than expected budget figures are likely to emerge from different regions, making spending cuts and unpopular austerity measures necessary. That will also mean more pressure on central government accounts from bigger regional deficits, and greater difficulty in reaching agreement because of clashes with opposition parties in power in regional fiefdoms. This will not change the fact that further tough measures may have to be taken, but it could make the process lengthier. Paradoxically, a very poor result for the Socialists could eventually boost the party's chances in a general election. That is because the onus of making draconian and unpopular spending cuts at the regional level will fall to the new PP leaders. PP WINS, BUT SOCIALISTS HANG ON TO KEY SEATS In this scenario the PP win overall but without Castilla-La Mancha and Extremadura. Up until last weekend many analysts argued that this was the most likely outcome. But growing social protest is seen as increasing the rate of abstention in Sunday's poll, and in the past higher abstention has done damage to the Socialists. A PP win without those key seats would be read as a relative victory for the Socialists given current predictions of a rout, and will probably diminish pressure on Zapatero from his own party to call early elections. But even in this scenario, market pressure for the government to keep the deficit under control is unlikely to abate, and is always subject to increase because of events elsewhere in the euro zone.
