• Spain crisis gives way to new battles for PM

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    MADRID: Conservative political survivor Mariano Rajoy who has won confidence vote in parliament on Saturday, which has since been formalized by a royal decree of King Felipe VI, is expected to take over once again as prime minister this week.

    At the same time, he is also poised to face unprecedented opposition as he grapples with painful economic reforms and resurgent Catalan separatism.

    The 61-year-old prime minister has been at the helm of a provisional government without full powers for the past 11 months following inconclusive elections in December 2015 in which his Popular Party (PP) lost its absolute majority despite coming first. New elections in June once again failed to hand him an absolute majority.

    He is expected to name his new cabinet Thursday after which he will need to submit a budget to parliament for approval after a delay of several months — a difficult task given that he commands the votes of just 137 of Spain’s 350 lawmakers in the lower house.

    If Rajoy is able to persuade enough parliamentarians to back — or not oppose — his taxation and spending plans, he will still face the scrutiny of the European Union, which will want to know how the country will reduce its structural deficit to below three percent of GDP for 2017.

    But it may prove impossible for Rajoy to secure enough parliamentary support while meeting the terms laid down by Brussels.

    To slash the deficit Rajoy will be faced with the thankless task of either cutting spending by 5.5 billion euros ($6 billion), angering the left on whose support he may depend to get the budget passed, or hiking taxes, a move that could draw the ire of business and jeopardize investment.

    The country has the second highest unemployment rate in the EU — second only to Greece — at 18.9 percent, which coupled with a pensions crisis exacerbated by an ageing population, threaten Spain’s fragile green shoots of growth.

    His best hope would be to appeal to parliament’s 32 centrist Ciudadanos members.

    AFP

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