Jan. 14 (Bloomberg) — Spanish Prime Minister Jose Luis
Rodriguez Zapatero today set national elections for March 9,
triggering a campaign likely to focus on the end of a decade-
long economic boom and renewed separatist violence.
Mariano Rajoy, leader of the opposition Peoples Party,
blames the economic slowdown on Zapateros Socialist government
and calls him weak on terrorism. The government approved a
decree dissolving parliament at a Cabinet meeting in Madrid
today.
The race is a rematch of the 2004 election. Polls show
Zapatero, 47, slightly ahead of Rajoy, 52. A survey published
today by El Pais on its Web site indicated Zapatero would win 43
percent to Rajoys 40 percent, within the polls margin of
error. A Sigma Dos Jan. 2 poll put Zapatero ahead by 2.5 points,
about half his 2004 winning margin.
“Zapatero has more chance of losing now than he did three
months ago, said Rafael Pampillon, head of the economics
department at Madrids Institute of Business. “He should have
called early elections.
The official two-week campaign, when party advertisements
and rallies are permitted, will start Feb. 22. Both candidates
have agreed to two debates, which would be the first in a
Spanish national election since 1993. They are tentatively
scheduled for Feb. 25 and March 3.
Distributing Wealth
Zapatero said today he aimed to lead a society “where
economic growth would serve to guarantee the rights of all, and
the equal distribution of opportunities and wealth.
“The legislature that ends today has shown that those
principles have become reality, he said in a press conference
at his Madrid residence. “I have been faithful to my word.
The centerpiece of Rajoys campaign likely will be the
economic slowdown. In 2004, the Socialists inherited an economy
in its 11th year of growth. Unemployment and inflation were
declining and the budget was almost balanced.
Under Zapatero, the government delivered a budget surplus
for three years, reduced unemployment to a 29-year low of 8
percent and extended an expansion that allowed Spain to surpass
Italy in terms of wealth per capita.
Now, a long real-estate boom that helped double the size of
Spains economy in six years is faltering, and other industries
have failed to make up for the construction slump.
Inflation, Unemployment
Surging energy and food prices pushed inflation to 4.3
percent, the highest in 12 years. Unemployment is rising and the
doubling of European interest rates since 2004 has led to
declining home prices for the first time in more than a decade.
The European Commission predicts economic growth will ease to 3
percent this year, the slowest pace since 2002.
“For Zapatero, its bad timing, said Vanessa Rossi,
associate fellow with the International Economics Program at
London-based Chatham House. “The downturn was a bit of a time
bomb waiting to happen.
Almost 70 percent of Spaniards think the governments
handling of the economy is to blame for the softening real-
estate market, according to a survey by real-estate Web site
Facilisimo.com this month.
The PP accused the Socialists of “ruining the economic
gains they inherited, in a report released Jan. 7. The study
blamed Zapatero for everything from rising oil prices to higher
interest rates. Zapatero responded by accusing Rajoy of fear-
mongering.
Madrid Bombing
Zapateros surprise 2004 victory came three days after the
March 11 Madrid train bombings that killed 191 people. The
attack fueled outrage at the ruling Peoples Party after it
initially blamed the carnage on the Basque separatist group ETA.
Investigators concluded that Islamic extremists carried out the
attack to punish the PP for supporting the U.S.s Iraq invasion.
Ever since, the Peoples Party has questioned the
legitimacy of Zapateros government. “Whats true, and
undeniable, is that March 11 won the elections for the
Socialists, said Manuel Sanchez de Diego, a professor with San
Pablo CEU Universitys Institute for Democratic Studies in
Madrid.
After taking office, Zapatero tried to negotiate a
settlement with ETA, which hadnt launched a fatal attack since
May 2003. The group has killed more than 800 people in its 40-
year campaign for Basque independence from Spain and France.
Airport Attack
The talks turned many loved ones of ETA victims into Rajoy
allies. Their anti-terror rallies have attracted more than a
million people and often featured PP officials lambasting
Zapatero for negotiating.
The governments efforts resulted in a March, 2006 cease-
fire. Nine months later, ETA exploded a car bomb at Madrids
Barajas Airport, killing two. Other attacks followed, and two
Spanish police agents were killed in a shootout with ETA
militants last month. The government has stepped up police
action against the group, forcing Rajoy to temper his criticism
even as he promises to act more firmly to crush ETA.
Rajoys campaign likely will be aided by the Catholic
Church, which has strong organizational skills and has become
more politicized under Zapatero.
More than 80 percent of Spaniards identify themselves as
Roman Catholics, even as church attendance declines. The
countrys cardinals and bishops held a rally in Madrid last
month in defense of the family. Organizers estimated more than a
million people listened to church leaders slam Zapatero for
legalizing gay unions, easing divorce laws and curbing religious
education in public schools.
“This path doesnt respect our constitution, Cardinal
Agustin Garcia-Gasco, archbishop of Valencia, told the crowd.
“The path we are heading down will lead to the breakdown of our
democracy.
To contact the reporter on this story:
Ben Sills in Madrid at
