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Spain - radical change

What a day of joy: the centre-right Partido Popular (PP) has overthrown the Socialists (PSOE) in a landslide victory.  With 80% of the votes counted, at 22:15, the PP has overall majority with 187 of 350 seats: this is a bigger victory than when the last PP Government won with the victory of Aznar back in the nineties.  Iti is a damning result for the Socialists, who will now need to restructure and rebuild their party. All but two of the autonomous regions are now under control of the PP, and Andalucia (which the Socialists had controlled for more years than Franco ever did) has brought in the centre-right.

The victory gives the leader of the PP, Mariano Rajoy, the full backing to take radical and harsh measures needed to pull Spain back from the brink.  Clearly there will be an early euphoria in the markets as we enter the new week, but once the ectsasy of victory calms, the crude reality of the necessary austerity will sink in and the markets will return to measure the cost of years of low growth that this structural change will take.  But what outsiders may not initially realise is that this new Government will not be scared to take on the challenge of harsh change, and will be far more draconian than most can imagine.

The impact of this victory now swings the focus immediately back on Italy, and that will be the issue internationally.  Here in Spain, once the new team is installed, we can all knuckle down and get on with the hard work that every Spaniard understands is needed.  Viva Espana.