Spain will have to take the pain
Spanish voters went to the polls yesterday in a very different mood from that of their Irish counterparts last February.
The troubles of the two countries are strikingly similar, but in Spain little passionate anger was directed against the outgoing Socialist prime minister, Jose Luis Zapatero, and little faith reposed in the prospects of his People's Party rival Mariano Rajoy.
Although every opinion poll predicted a sweeping victory for Mr Rajoy, and although Mr Zapatero had clearly failed to overcome the economic crisis, the People's Party seemed determined to keep itself and the electorate free of enthusiasm.
The party leader, no doubt wisely, refrained from making any election promises.
Instead, he declared himself "ready for what the Spaniards want", by which he evidently meant what he thought they needed.
His shadow finance minister promised immediate reforms.
In other words, Spain can look forward to austerity and gloomily contemplate the existing Greek, Irish, Portuguese and Italian models.
Spain, however, is in much better economic shape than any of the three bailout countries: in some respects, in better shape than Italy.
Its budget deficit is high but manageable. The Zapatero government did not engage in the wild borrowing and spending that contributed so much to the Irish crash.
But the appalling unemployment rate is far higher than ours, at 21.5pc.
And the housing bubble is comparable to that of Ireland.
One of the major complaints against the Zapatero government has been that it failed to take early action to cool the property market. This, of course, will ultimately result in a collapse instead of a mere correction.
Over the last week the financial markets -- always nervous, with or without justification, at election times -- have targeted Spain as they previously targeted the bailout countries and Italy. Bond yields have soared to a level of 6pc or more: bailout territory.
The first objective of the new government will be to avoid a bailout. This will be immensely difficult.
It could become impossible in a matter of weeks, the length of time it takes in normal circumstances to install a new administration.
The People's Party election slogan claimed that "with Rajoy it's possible".
The sad truth is that, under whatever government, another major European economy is on the brink.
Irish Independent
