Rajoy wins in Galicia. Catalan test ahead.

One down and more to go? Catalan vote of 25th Nov may be his biggest test yet as Spain richest state seeks independence from budget cuts and austerity measures.

Prime Minister Mariano Rajoy extended his majority in the stronghold region of Galicia as Spanish voters offered some respite to his 10-month-old government and removed one obstacle to a European bailout.

His PP won 41 of the 75 seats in the regional assembly, allowing it to extend its majority in the northwestern region as the Socialists lost almost half of their votes and a new leftist group took nine seats. In the Basque Country, where support for the PP is traditionally weak, the Basque Nationalist Party won 27 seats, allowing it to lead a government through alliances with other parties including the 21 separatist lawmakers of Bildu.

German Chancellor Angela Merkel, French President Francois Hollande, European Union President Herman Van Rompuy and Italian Prime Minister Mario Monti discuss progress on implementing a regional banking supervisor. Swedish Prime Minister Fredrik Reinfeldt, Spanish Prime Minister Mariano Rajoy and European Commission President Jose Barroso also speak.

With the election over, Rajoy can decide whether to seek a bailout, putting Europe’s newest crisis-fighting tools to the test on an economy that’s twice the combined size of Greece, Ireland and Portugal. At their 20th crisis-fighting summit last week, European Union leaders failed to fulfill pledges made in June for greater integration, as German Chancellor Angela Merkel pushed back against demands from France and Spain.

“He’ll want to hold off a couple of weeks before asking for the bailout to save face and show they weren’t waiting for the elections,” Ken Dubin, a political scientist who teaches at IE business school and Carlos III University in Madrid. “It’s game on” for budget cuts, he said.

Via – Bloomberg


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