Slim Euro Victory Saves Spain`s Top Conservative

The Socialists got 38 percent of the vote despite Spain having the European Union's highest unemployment rate.

The leader of Spain's right-wing opposition may have beaten the ruling Socialists in European elections but many conservatives will be disappointed at the narrow margin of victory during a deep recession.

A cartoon in left-leaning newspaper El Pais probably summed up the feelings of many, depicting Prime Minister Jose Luis Rodriguez Zapatero celebrating his defeat by the Popular Party's Mariano Rajoy, whose leadership has been much questioned.

"I've won, because I've strengthened Mariano," says Zapatero, referring to the widespread view that the opposition leader's lack of charisma makes him an asset to the government.

While the four percentage points margin of the PP's European election victory over the Socialists was a big improvement over the opposition's defeat by the same margin at last year's general election, the government avoided the crushing result suffered by left-wing parties elsewhere in Europe.

The Socialists got 38 percent of the vote despite Spain having the European Union's highest unemployment rate, which at about 18 percent has doubled since 2007 as a construction boom turned to bust.

Many within the Popular Party feel Rajoy lacks the charisma and courage necessary to take advantage of the downturn in the Spanish economy, which economists say requires painful labour market liberalisation if it is to return to vigorous growth.

"This consolidates Rajoy as a strong leader within his party," said Juan Carlos Rodriguez, of Analistas Socio-Politicos.

But he added: "There are people who won't like that because they think that the PP won't win major elections under Rajoy."

Rajoy, a former interior minister who usually scores beneath Zapatero in voter approval polls, has mapped out a cautious strategy with few specific policy proposals beyond tax cuts.

"These results reinforce him as leader," said Juan Diez, of Analisis Sociologicos, Economicos y Politicos, "The debate within the PP, if not completely over has been put on hold. Now whether that's for the better or not is another question."

IN SPAIN, IT'S NOT THE ECONOMY, STUPID

Zapatero outperformed Socialists elsewhere in Europe by concentrating his campaign on social issues, such as liberalisation of abortion laws, which rile the traditionally Catholic PP.

Together with a stimulus plan costing around 150-billion euro ($207.5 billion) aimed at staunching the loss of jobs, the prime minister will be hoping to claw back ground against the PP by the time of the next election in 2012.

"In Spain, governments tend not to be badly hit by economic crises," Rodriguez said.

Previous administrations had suffered more from corruption scandals, which have not been a major problem for Zapatero.

While the prime minister has almost three years before having to face the voters again, he also faces increasing problems passing legislation in Congress due to his deteriorating relations with regional nationalists.

"He isn't heading to lose the next election by any means. Unless the crisis gets worse and the government becomes demoralised," Rodriguez said.