March 25, 2012 / 9:41 PM / 8 years ago

Spain PM denied symbolic austerity boost in local vote

SEVILLE, Spain (Reuters) - Spain’s centre-right People’s Party won a regional election in Andalucia on Sunday, but did not secure the outright majority it expected, depriving Prime Minister Mariano Rajoy of a symbolic boost to help him push through harsh spending cuts.

Rajoy had hoped his PP party would secure a majority in the country’s most populous autonomous region, and planned to use it as a mandate to deepen cuts in public spending as he tries to drag Spain out of the euro zone debt crisis.

A solid win in Andalucia, known for its olive oil industry and beaches, would have also put the PP in control of 12 of Spain’s 17 autonomous regions and strengthened Rajoy’s hand five days before he presents a tough 2012 budget.

But though strong, the results suggest his party will not be able to govern the region since the Socialists can ally with a leftist party to control the legislature.

With 96 percent of votes counted, the PP had 50 seats in the 109-seat local legislature, the most it has ever won in the region. The Socialists had 47 and the United Left had 12.

Opinion polls had forecast the PP would take between 54 and 59 seats as Andalucians tired of three decades of Socialist rule, due to high unemployment and corruption scandals.

In April, Rajoy is expected to enact reforms allowing the country’s regions to cut health care and education spending. Though his party’s performance fell somewhat short of expectations, he commands an absolute majority in the national parliament and will still be able to forge ahead with his plans.

FATIGUE WITH SOCIALIST RULE

Although a Socialist-United Left coalition is not a given, United Left’s leader hinted on Sunday that his party was minded to enter such a coalition.

“Today we’ve seen that the majority of voters in Andalucia have not voted for the right. They want change that defends the social model and the equality of opportunities,” United Left leader Cayo Lara said on television.

“The people of Andalucia want change, but they want change through the left,” he said.

The United Left gained six seats in the local legislature as leftist voters abandoned the Socialists. A dozen Socialist leaders are due to stand trial on accusations that they diverted benefits meant for struggling companies to family and friends.

The Socialists did better than expected though and the outcome will breathe some life back into the party, which lost badly in general elections in November and in city and regional elections last May.

The smaller northern region of Asturias also held elections on Sunday. As expected, no party got a clear majority, and it was still not clear whether the Socialists or the PP would be able to form an alliance with another party to govern.

The extent of public angst over cuts will be tested on Thursday when the country sees its first general strike since November 2010.

YEARS OF OVERSPENDING

Spain’s regions account for around half of public expenditure and overseeing their spending after years of profligacy will be key to the central government meeting its deficit targets.

Andalucia is one of the most indebted regions in the country relative to its output and has the highest jobless rate in all of Spain, at over 31 percent.

The region is home to almost a fifth of Spaniards and is reliant on more than 20 million visitors to its cities and beaches each year, as well as agriculture, to ease some of the domestic pain.

At least half of Spaniards support some spending cuts to social services as the government tries to avoid needing a bailout like neighbour Portugal.

Spain’s regions must find savings worth around 15 billion euros to meet deficit-cutting requirements this year.

Andalucia saw its income boosted during a decade-long property boom that began to unravel in late 2007. Since then construction has gone from representing close to 15 percent of the region’s gross domestic product to around 11 percent, according to the National Statistics Institute.

Editing by Fiona Ortiz, Philippa Fletcher and Andrew Osborn

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