Spain elected a new Prime Minister on Sunday, ousting the Socialist government after ruling the country for eight years.
The conservative centre-right party called the Popular Party (PP) led by 56 year old Mariano Rajoy, won the biggest parliamentary majority in a Spanish election in almost 30 years.
After hearing the results, Rajoy told supporters outside the PP’s headquarters in Madrid last night that “Hard times lie ahead.”
The new leader takes over at a time when Spain is grappling with a burst housing bubble, a 21% unemployment rate and borrowing costs near levels that triggered the international bailouts of several fiscally frail euro-zone peers.
Spain is the third indebt euro-zone country to see a change of government in the last few weeks. Rajoy’s victory is a step in the right direction and is definitely seen as a positive in the short-term. While a change of leadership might improve investor sentiment the real focus will be on how committed to austerity and economic overhauls the new leadership will be.
Rajoy’s promises of major reforms, more austerity and strict deficit control are in tune with market demands and with those of Germany’s Angela Merkel, the European Central Bank and the European commission.