Rajoy Aims to Sway Spanish Voters With Pre-Election Handout

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Photographer: Pau Barrena /Bloomberg

Prime Minister Mariano Rajoy gave Spaniards a pre-election handout in a bid to secure a second term when voters go to the polls around the end of the year.

Rajoy raised public workers’ salaries by 1 percent and increased pensions by 0.25 percent as he approved the 2016 budget at a cabinet meeting in Madrid Friday. One group missing from the electoral sweeteners was the almost 50 percent of young Spaniards who are unemployed. Many of them are backing the anti-austerity party Podemos that Rajoy said threatens the recovery.

“This year we’re cutting taxes and next year we’re going to improve the situation of public workers,” Rajoy said at a televised press conference. “We are repaying people’s sacrifices, little by little.”

The prime minister is looking to rebuild his political capital after a series of high-profile corruption allegations and almost four years of austerity cost him the support of more than 2 million voters since his 2011 election victory. As the economy speeds ahead at the fastest pace in eight years, the government is deploying a barrage of pledges and giveaways to bring disenchanted former supporters back on board.

“This budget has a strong electoral component,” said Antonio Barroso, a London-based political analyst at Teneo Intelligence. “Rajoy knows that if we wants to win the election it comes down to the economy and the idea that the recovery is taking hold thanks to his policies. Hiking pensions and wages for public workers fits that rhetoric.”

Deadlocked Polls

Earlier this month, Rajoy upgraded the government’s growth forecast to 3.3 percent for 2015, and brought forward a tax cut planned for 2016, while pledging to increase the number of jobs in Spain to 20 million if he wins a second term.

Rajoy has yet to announce a date of the election, but he said he intends to see out his four-year term which expires in November.

Facing competition from alternative parties led by younger politicians, the 60-year-old prime minister has moved to modernize his People’s Party’s image with a new logo and younger candidates nominated to take the lead on the campaign trail. Still, he’s struggling to shake off the stain of graft.

Asked about the allegations against his party, he said, “Let’s not talk about the past.”

Rajoy’s PP trailed the main opposition Socialists by 23.5 percent to 23.1 percent in a Metroscopia poll for El Pais newspaper this month. Podemos was on 18.1 percent with Ciudadanos, a pro-market challenger to the PP, on 16 percent. Metroscopia interviewed 1,000 people by telephone between July 20 and 22. The margin of error was 3.2 percentage points.

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(Updates story with comment from analyst in fifth paragraph)
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