Spain’s Zapatero Says He’ll Step Down Ahead of 2012 Election

[Ghost Dog]

Source: Bloomberg

... Zapatero, a Socialist who in 2005 said he slept with his union card by his bed and pledged to keep increasing pensions, made a policy U-turn in May after the Greek crisis prompted a surge in Spain’s borrowing costs. Zapatero cut public wages 5 percent, reduced pensions and benefits and implemented a labor- market overhaul to lower firing costs and make it easier for companies to opt out of wage-bargaining deals.

After facing down the first general strike in eight years in September, he increased the retirement age and is planning further curbs on wage bargaining rules as part of the government’s efforts to steer the economy back to growth after an almost two-year recession.

His efforts, while angering his traditional union allies and undermining popular support, have prompted a decline in Spanish borrowing costs. That’s in contrast to Portugal, where yields have surged to record highs after Socrates’s failure to get austerity measures through Parliament prompted early elections. The extra yield investors demand to hold Spanish 10-year bonds instead of German debt was 194 basis points on April 1, down from a euro-era record of 298 basis points on Nov. 30.

...

Zapatero’s successor will struggle to reverse the party’s dwindling support. The opposition People’s Party stands to win 47.9 percent of the vote, compared with 31.4 percent for the Socialists, a poll published El Mundo showed on March 13.

Read more: http://noir.bloomberg.com/apps/news?pid=20601108&sid=aXt674SSdAgI

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Only occasionally do I worry about what a potential 2012 Spanish rightist christo-fascist backlash could be like...