RIGHT-WING PARTY
BEATS SOCIALIST PARTY
IN SPANISH ELLECTIONS



The conservative opposition People's party (PP) of Mariano Rajoy have won a clear majority in Spain's general election.
The right-wing PP won 186 seats compared to 154 in the last legislature, while the Socialists fell from 169 to 110, their worst performance ever.
Although the 56-year-old is an apostle of deficit control and liberalisation, he has been deliberately vague about his plans so as not to frighten off voters.
He will come under immediate pressure from markets to reveal exactly how he intends both to kickstart growth and cut spending. Some experts say he must find €18bn through cuts or tax hikes. Rajoy pleaded last week for markets to give him "more than half an hour", but has also said that his party already has clear plans.
PP spokeswoman Ana Mato confirmed that the party's own polling also gave them an clear majority. "The PP has won with an ample majority," she said. "Our only objective now will be to overcome unemployment and the crisis."
Rajoy is a former property registrar who held various ministerial posts in the governments of José María Aznar between 1996 and 2004.
Spaniards show little personal enthusiasm for the uncharismatic conservative, but they tired of Zapatero, who oversaw a dramatic economic slump that left growth at 0% and unemployment at 23%.
With Spain's sovereign debt yields last week approaching the levels at which Portugal and Greece needed bailouts, Socialist candidate Alfredo Pérez Rubalcaba had little chance of extending the seven-and-a-half year period of leftwing government under Zapatero.
Spaniards hope the change of government will calm markets that had increased pressure on the country's debt despite Zapatero's own austerity programme, which saw civil service pay cut and pensions frozen.
Deficit spending by regional governments, which provide basic services such as education and health, has also been squeezed, sending public service trade unions out in protest.
Zapatero has also extended the retirement age and changed the constitution to allow for a long-term deficit limit to be set on the budget. Rajoy has said one of his first measures will be to set that limit.
Rajoy's promises of major reforms, more austerity and strict deficit control are in tune with market demands and with those of Germany's Angela Merkel, the European Central Bank and the European commission.
PP shadow finance minister Cristóbal Montoro has said the new government will act hard and fast, introducing reforms immediately. Rajoy must now name his future finance minister. He has said in the past that he is happy to choose someone from outside the party, so may end up naming a market-friendly technocrat.
 

BASQUE GOVERNMENT CONSIDERS

PARTIAL CANNABIS LEGALIZATION

The Basque regional parliament is to propose an amendment to its Addiction Law to allow for the "cultivation, sale and consumption" of hashish and marijuana. The bill, which will be presented next year, was put forward on Monday by regional deputy health chief, Jesús María Fernández, during the presentation of the VI Addictions Plan 2011-2015.

Fernández stated that it is better to "regulate rather than prohibit behavior that is already established in our society."

The regional health chief, Rafael Bengoa, explained the proposal would be available to over-18s to consume cannabis in a "responsible" manner, with all necessary information about the consequences and with full respect for the health rights of other citizens. "We do not want to be prohibitionist," he added.

THE INCREDIBLE RETURN

OF THE PESETA

The breakup of the euro zone has long been considered an impossible event, even by those who harshly criticized the way it was born. But the public debt crisis and the response by European leaders has changed that outlook. In early November, French President Nicolas Sarkozy and German chancellor Angela Merkel showed Greece the door and placed Italy under surveillance.

"Over the next decade, it is very unlikely that no country at all will pull out of the euro zone," wrote Barry Eichengreen of the University of California in 2008, in one of the best-known analyses on the issue. But Eichengreen believed that the alleged cure could be even worse than the disease itself, even in countries undergoing a brutal recession like Greece. These days, Eichengreen continues to feel the same way, except now he is a lot more pessimistic.

"If they don't give the reforms time to generate growth, that will be the euro's death sentence," he warned a few weeks ago. And according to him and most other scholars, only Germany and the European Central Bank can buy that kind of time.

Pulling out of the euro zone poses enormous legal challenges. As the British jurist Charles Proctor has analyzed in great detail, there is only one way out: Article 50 of the Union Treaty, which also implies a simultaneous exit from the European Union. Unless the treaties are reformed, there is no way of kicking a member state out of the euro zone.

History shows that monetary unions can break up: the Austrian-Hungarian empire, the Soviet Union, Yugoslavia and even the US during the Civil War provide ample evidence of it, although it was almost always as a consequence of economic and political collapse.

A few minority voices claim that there are more advantages than drawbacks to leaving the euro zone. A report by the consulting group Capital Economics holds that for Ireland, Greece, Portugal, Italy and Spain, it would be better to return to their national currency and regain control over monetary policy. That would allow governments to devaluate and use the central bank to print legal tender, and buy public debt if necessary. With a cheaper currency, exports would benefit greatly, too. According to this report, a sharp drop in domestic demand would soon be compensated with a dramatic rise in exports and tourism.

IS URDANGARÍN GUILTY?


The Institute Nóos, of which Iñaki Urdangarín is chairman, received almost 5 million Euros from 2004 to 2006 from the Balearic Government of Jaume Matas and the Valencian Government of Francisco Camps.

In 2005, the Instirute Nóos received 1.2 million Euros, which were not justified.

The money was received for the holding of a conference to analyze the relationship between tourism and sport.

In 2006, the Institute chaired by Iñaki Urdangarin regained 1.1 million of the Balearic Government, to organize another conference in Mallorca.

In addition, the institute Nóos organized lectures in Valencia to analyze the economic impact of major sporting events. In this case, the organization of the Duke of Palma would have received 2.2 million from the Government of Valencia.

On the whole, the Institute Nóos has received nearly 5 million Euros in three years.

At present, the judge is reviewing the invoices provided by the organization of Iñaki Urdangarín.

It is not known if the judge will sit both Iñaqui Urdangarín and his partner on the bench to be judged.


by Jorge Maíz