Reuters: Market News: UPDATE 1-Spain's centre-right set to win key elections in Andalucia

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UPDATE 1-Spain's centre-right set to win key elections in Andalucia Mar 25th 2012, 17:40 Sun Mar 25, 2012 1:40pm EDT * People's Party set to win key election in region of Andalucia * Region has over 30 pct unemployment, highly indebted * Win would see PP introduce healthcare, education cuts nationwide * Andalucia been in Socialist hands since 1978 By Nigel Davies SEVILLE, Spain, March 25 (Reuters) - Voters in Spain's economically troubled region of Andalucia were expected to hand victory on Sunday to the centre-right People's Party, boosting Prime Minister Mariano Rajoy as he slashes spending to pull Spain out of the euro zone debt crisis. Opinion polls show the PP likely to win a full majority in the country's most populous region, grabbing the Socialists' last stronghold and allowing Rajoy's party to use his widening popular backing to push for cuts in education and healthcare spending nationwide. After more than 30 years of Socialist governments, voters in Andalucia fed up with corruption scandals and high unemployment said it was time to move on despite the austerity measures. "Andalucia needs a change. We've got to try it at least even if people are getting annoyed by the talk of more cuts to come," said Roberto Fernandez, a 41 year-old taxi driver going to vote in a school on one of central Seville's cobbled streets. He said he would vote for the PP after years of voting for the Socialists. A dozen Socialist leaders face trial on accusations of channeling benefits meant for struggling companies to family and friends. The smaller northern region of Asturias also holds elections on Sunday but no party was seen getting a clear majority, so either the Socialists or the PP will have to form an alliance with another party to govern. A solid victory in Andalucia, known for its olive oil industry and beaches, will put the PP in control of 12 of Spain's 17 autonomous regions and strengthen Rajoy's hand five days before he presents a tough 2012 budget. Voting stations close at 8:00 p.m. local time (1900 GMT) and results are expected an hour or so later. In April Rajoy is expected to pass reforms allowing regions to cut health care and education spending, treasured social services that so far have escaped the austerity drive that Spain is pursuing as it tries to escape the euro zone debt crisis. The extent of public angst over cuts will be tested on Thursday when the country sees its first general strike since November 2010. YEARS OF OVERSPENDING Spain's regions account for around half of public expenditure and overseeing their spending after years of profligacy will be key to the central government meeting its deficit targets. Andalucia is one of the most indebted regions in the country relative to its output and has the highest unemployment rate of all at over 31 percent. The region is home to almost a fifth of Spaniards and is reliant on more than 20 million visitors to its cities and beaches each year, as well as agriculture, to ease some of the domestic pain. "The Socialists are going to pay a high price for unemployment and the corruption scandals even though every party has those," said Cesar Chaparro, 35, a computer technician who said he would vote for a smaller party, since he has lost confidence in both of the main parties. The head of the PP in Andalucia, Javier Arenas, has promised to eliminate 50 percent of high level posts within regional and municipal government and shut down redundant public bodies. He also pledges to reform the health system but has not explained in detail how consumers would share the burden of medical costs. At least half of Spaniards support some spending cuts to social services as the government tries to avoid needing a bailout like neighbour Portugal. Spain's regions must find savings worth around 15 billion euros to meet deficit-cutting requirements this year. Andalucia saw its income boosted during a decade-long property boom that began to unravel in late 2007. Since then construction has gone from representing close to 15 percent of the region's gross domestic product to around 11 percent, according to the National Statistics Institute. REGIONAL DOMINANCE A win in Andalucia, where bullfighting and flamenco music traditions are strong, would give the PP firm control over the country's regions, after winning many at last May's local elections. The likely victory in Andalucia, which represents just shy of 14 percent of the country's economic output, would leave the Socialists struggling and with its lowest level of institutional power since Spain returned to democracy in the 1970s. "The loss of Andalucia will be a huge blow for Socialist morale. The party's share of power has hit bottom," said Josep Lobera, research director at Metroscopia polling company. Link this Share this Digg this Email Reprints

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