Mariano Rajoy sworn in as Spain's Prime Minister

Mariano Rajoy has taken the oath of office as Spain’s Prime Minister to begin forming a new minority government.

Rajoy was sworn in at the royal palace in Madrid on Monday, returning to office after 10 months of political limbo which had caused Spain to grapple with increasing economic uncertainty. The deadlock ended when Rajoy won a confidence vote from lawmakers at the weekend.

The swearing-in ceremony was presided by King Felipe VI. Last week, the monarch asked Rajoy to form a new cabinet after Spain’s Socialists, who had opposed the 61-year-old and his Popular Party(PP)’s return to power, accepted to abstain in the final vote of confidence in parliament and therefore enable Rajoy to form a government with cross-party support.  

However, Rajoy, who will name his conservative cabinet on Thursday, is expected to face an array of challenges, including a weak mandate which would make it hard for him to pass laws in parliament. The most daunting of all tasks would be to find some 5.5 billion euros (USD 6 billion) in cuts or tax hikes to meet targets set by the European creditors.

Observers in the banking sector said Monday that Rajoy would fail to carry out expected reforms in the economy given the massive opposition from the Socialists and other parties. They said Rajoy would be needed to strike deals with a fragmented opposition to pass legislation in the future, something they said could become increasingly difficult.

Rajoy’s sole advantage in the new government would be the widening split among the opposition, which would give him some chance of clinching deals at the expense of keeping Spain away from another political deadlock.

SS