Spain Votes in Regional Poll as Rajoy Seeks Backing for Cuts

Spaniards in Prime Minister Mariano Rajoy’s home region vote today in an election the premier is counting on to show he can implement the deepest budget cuts on record and still win popular backing.

Voting began at 9 a.m. Madrid time with polls showing Rajoy’s People’s Party is favorite to hold on to Galicia, the northwestern region that has been a PP stronghold for most of the past three decades and was home to the party’s late founder, Manuel Fraga. The Basque Country, where surveys put local nationalists ahead, also has an election. Voting ends at 8 p.m.

Rajoy, who faces the second general strike of his 10-month administration in November amid mounting street protests, needs to show he can still win votes even as he trims spending and breaks pledges in an attempt to revive the economy. The end of campaigning may also remove an obstacle to seeking the European bailout that the government says it’s considering, and free its hand to deepen budget cuts.

The elections “represent the first significant test to Rajoy’s austerity policies since he was elected last year,” said Antonio Barroso, an analyst at Eurasia and former state pollster. If he wins, “he would probably argue that Galicia is the proof that austerity can be successfully implemented and supported by voters.”

Photographer: Miguel Riopa/AFP via Getty Images

A woman votes with her daughter at a polling station in Vigo, during the Galician regional election. Close

A woman votes with her daughter at a polling station in Vigo, during the Galician regional election.

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Photographer: Miguel Riopa/AFP via Getty Images

A woman votes with her daughter at a polling station in Vigo, during the Galician regional election.

Election Polls

The PP will hold on to its 38 seats in the 75-member regional assembly, maintaining the majority it’s held since 2009, according to a poll by the state-run CIS on Oct. 5. A separate poll published by Voz de Galicia newspaper showed it may win 39 seats, while a survey for daily ABC put the figure at 40-41 seats. If the PP falls short, Socialists and Galician nationalists would seek to govern in a coalition, as they did from 2005 to 2009.

In the Basque Country, voters will probably elect the Basque Nationalist Party, which governed the region from 1980 to 2005, when a one-off coalition of Socialists and the PP pushed it from power. The PNV, which seeks greater autonomy, may win 27 of the 75 seats, allowing it to form an alliance with 22 lawmakers from separatist Bildu, the CIS poll showed.

That would leave Rajoy battling bids for greater independence on two fronts, as Catalonia holds an early election on Nov. 25 focused on whether Spain’s biggest regional economy should have a referendum on independence.

Budget Cuts

Rajoy is implementing about 100 billion euros ($130 billion) of budget cuts, while bailing out banks and raising taxes in breach of promises he made during the national election campaign last year. Galicia, run by Alberto Nunez Feijoo, has one of the smallest deficits of Spain’s 17 regions and isn’t tapping the central government’s bailout fund.

Even after cutting spending in areas including health, Feijoo has the backing of 35 percent of Galicians for the president’s job compared with 12 percent for Socialist leader Pachi Vazquez, the CIS poll showed. He seen as a possible successor to Rajoy.

The end of the campaign may also remove one obstacle to Spain seeking a European bailout, said Alejandro Quiroga, a political scientist at Newcastle University in the U.K. and Alcala de Henares University in Madrid.

Rajoy has spent more than two months mulling a decision on whether to request ECB bond buying to bring down borrowing costs. He said on Oct. 19 he isn’t facing pressure from European peers to seek help and the fact the rescue mechanism exists is “very important.” Even with the yield on the country’s benchmark 10-year bond at a six month-low, the country still pays 378 basis points more to borrow than Germany for 10 years.

To contact the reporter on this story: Emma Ross-Thomas in Madrid at erossthomas@bloomberg.net;

To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net

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