Spanish government poll woes

Spain's governing People's Party (PP) won the most votes in regional elections in Andalucia on Sunday but did not gain a majority.

The vote comes ahead of a planned general strike, with the government preparing to present its budget reforms to parliament on Friday. A delegation from Brussels will be arriving to study the economic situation before compiling a further report.

Andalucia has 30 percent unemployment rates and is highly indebted as a region. Prime Minister Mariano Rajoy had been hoping for a vote which would reinforce his policies of spending cuts to improve public finances. The region of Andalucia had been in Socialist hands since 1978.

Although the PP's result - 50 of 109 seats in Andalucia, Spain's most populous region - was a record win, it is likely to allow the Socialists and the United Left to create a leftist ruling coalition. The PP controls 11 of Spain's 17 autonomous regions, in each of which the government wants to extend cuts in health and education spending.

"We will pass a very, very austere budget," Rajoy told reporters in South Korea, where he was attending an international nuclear summit.

Rajoy's reforms have won support from voters who want Spain to avoid a bailout request similar to that being asked for by neighboring Portugal. However a general strike is planned for Thursday, ahead of the parliamentary budget announcement on Friday.

Investors were reported to have sold Spanish stocks on the news of the election result, worried that the vote would make the task of deficit reduction more difficult.

The arrival of the delegation from Brussels to look at progress on deficit reduction was described as nothing unusual by EU Commissioner for Economic Affairs Olli Rehn. The report is to be published in May.

jm/rc (AFP, Reuters)