Spain's new government faces challenges

Spain's new Prime Minister elect Mariano Rajoy (Ra-hoy) may have won a parliamentary majority, but he now faces pressure from the markets to reveal a plan to stave-off the financial crisis. The long queue outside one of Madrid's employment offices is a reminder of the monumental challenges facing Spain’s new government. The country dumped its ruling Socialist government on Sunday for the conservative leadership of Mariano Rajoy, who inherits an economy wracked by debt and an unemployment nightmare. With more than 21 percent out work, its unemployment rate is the highest among the 17 eurozone nations. Rajoy’s election campaign focused on job creation. But some of Madrid’s unemployed remain unconvinced that the new administration will make finding a job any easier. Juan Carlos Correa, Unemployed Madrid Resident, said, "All new governments have always made many promises, but in the end you don’t see any of those become reality." Rajoy also faces the challenge of trying to lower Spain's budget deficit . Jose Ramon Pin, Analyst and IESE Professor, said, "It's easy if we reduce expenditure and increase the budget through higher taxes. But to get the Spanish economy moving, to readjust the budget, that’s more difficult." There is pressure on Rajoy to calm jittery markets with fresh details of what are expected to be deep and painful austerity measures. Since his victory he has only said that there will be no miracles to fix the crisis. A new government alone hasn’t been enough to calm markets though, with Madrid’s key Ibex index down nearly two percent in early trading on Monday.