Zapatero Faces Dual Problems in 2nd Term

MADRID -- Spain's governing Socialists embarked on a second term in office Monday, facing the twin challenges of a slowing economy and resurgent Basque separatist violence after an election that highlighted the country's deep political divide.

"A Second Opportunity," read Monday's editorial headline in the leading daily El Pais, which noted that Prime Minister Jose Luis Rodriguez Zapatero's Socialists fell short of an absolute majority and would have to rely on some form of an alliance with smaller parties in order to govern.

Offers of help came quickly from the Basque Nationalist Party, which won six seats.

"We hope to contribute to [Zapatero's] government so that together we can find a definitive solution to the Basque country's political problems," party president Inigo Urkullu said.

The Socialists, however, are not expected to form a coalition government but to rely on the ad-hoc support in the parliament from smaller parties on individual bills and policies, as the Socialists did in the previous legislature.

The prime minister has promised tax breaks for the poor and further investment in infrastructure to absorb some of those laid off due to a slowing construction sector.

The Madrid stock market rose slightly on its first day of trading following the vote, rising 0.7 percent after opening the day down.

With 99.9 percent of the vote counted in Sunday's vote, Zapatero's Socialists won 169 seats in the lower house of Parliament, compared with 153 for the conservative opposition Popular Party headed by Mariano Rajoy.

The victory, although an improvement of five seats for the Socialists from the 2004 election, left the party seven seats short of a majority in the 350-seat parliament. Turnout was 75.3 percent.

"The Socialist Party is closer to the absolute majority, and it doesn't have to envision making many deals to form a government," said Carlos Malo, the director of the Sigma Dos polling company.

"I believe this is going to be good for [Zapatero]," Malo added. "It's going to give him more stability."

The election was held in the wake of the slaying of a former Socialist party councilor, Isais Carrasco, on Friday by suspected Basque militants.

In his victory speech, Zapatero paid tribute to Carrasco, saying he should have been celebrating the victory with his family.

Carrasco was buried Saturday, a day before the vote. Town halls across Spain honored him at noon Monday by holding five-minute long silent vigils.

The timing of the attack on Carrasco was reminiscent of an election-eve massacre by Islamic militants who killed 191 people in a string of bombings against commuter trains in Madrid on March 11, 2004. Three days after that attack, Zapatero won a surprise victory amid a wave of voter outrage at the ruling conservatives, who blamed the attacks on ETA even as evidence of Islamic involvement mounted.