Spain has new president

By Julia Pastor, in Madrid | Update Mariano Rajoy, elected by an overall majority on November 20, made his investiture speech on Monday. The investiture debate in the Spanish parliament has been held on Tuesday, and after its closing in the afternoon, Mr Rajoy has been officially sworn in as the new Spain’s president.

The announce of austerity measures raised yesterday great expectations, since from the election day and in spite of the attacks from the Spanish press due to his silence, Rajoy has been very discreet about the reform package in waiting. Based on the two core themes that will lead the Spanish political life during the next four years, to stop the growing unemployment and create jobs as well as defining Spain’s role in the world scenario, the main Rajoy’s measures to avert the crisis can be summarised briefly:

1) Dialogue: to pass the Law of Transparency, Governance and Access to public  information in the first semester of 2012.

2) Cut the deficit by €16.5bn.

3) Ending the reorganisation of the financial system by June 2012.

4) Changes to avoid the duplication of public services between the central and the regional governments.

5) Employment reform: public holidays will be moved to Mondays, flexibility and changes in the collective bargaining, a youth employment plan, and the abolition of early retirements.

6) Fiscal benefits for entrepreuners.

7) A new model for energy and tourism.

viii) An update of pensions from January 1 in 2012. This was the only pledge about public spending Rajoy made, insisting  it was ‘the only and exclusive’ department in which the initial amount would be increased.

9) To restore the Ministry of Agriculture.

10) Education reform: a three-year secondary education certificate, promoting Spanish-English bilinguism, and trilinguism in those regions with their own official language.

Analysts at Banco Sabadell considered that

“Rajoy’s speech reflected the willingness to carry out a fiscal, financial and labour reform following the lines expected by the markets,” although they also admit that “details were not provided.”

Citi’s experts in Madrid missed

“more concrete measures” but pointed out that “many investors paid carefully attention to the new Spain’s president speech, and they liked it […] Anyway, the speech allowed to deepen the gap between Spain and Italy’s risk country.”

The most significant words of president Rajoy during his Tuesday investiture debate were for Amaiur, the Basque party, which obtained 7 seats in the last elections and which observers see as linked to the terrorist group ETA. Rajoy said he expects to put an end to ETA

“by legal means […] Neither the Spanish people nor me owe you anything” answered Rajoy to Amaiur’s spokesman.

At the end of the debate and after the voting in the Spanish parliament, Mr Rajoy has been elected president with 187 votes in favour. Tomorrow morning, the new president will announce to King Juan Carlos the composition of his government cabinet, and then it will be revealed publicly.

About the Author

The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.

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