Rajoy says will boost business in bid to save Spain

Spain's likely new leader, centre-rightist Mariano Rajoy, pledged on Friday to restore confidence to the troubled economy and boost business after a parliamentary election in which voters are set to throw out the Socialist government. Opinion polls ahead of Sunday's election show the People's Party, led by Rajoy, has a double digit lead over the Socialists, widely seen by Spaniards as having mishandled the response to the mounting euro zone debt crisis.
Spain will become the latest precarious euro zone country to replace its leadership, following Greece, Ireland, Italy and Portugal. Economic woes have dominated the campaign, with more than one in five workers out of a job, a recession looming and government borrowing costs soaring to levels that forced other euro zone countries to resort to international bail-out funds.
Rajoy, a cautious former interior minister, will not be sworn in until around December 20. But before that he is expected to try to calm financial markets by laying out the details of how he will shrink the public deficit and reform the economy to make it more competitive. "The worst thing is the doubts hanging over Spain, the lack of confidence. My fundamental objective is to provide that confidence," Rajoy said on Friday on Onda Cero radio.
He will name economy heavyweights to his cabinet and immediately implement tax cuts for small companies that hire. "We need a shock plan for entrepreneurs," he said. "There are going to be specific measures from the start for entrepreneurs and there is going to be a clear message from the government that we're counting on them, with the help of the government, to steer us out of this crisis by creating employment."
Rajoy will have little time to act. Spain sold a 10-year government bond on Thursday with a yield of almost 7 percent. That high a borrowing cost has forced other countries into seeking international aid. However, investor concerns over European government debt have shifted to Italy and France, which means that unless the euro common currency area comes up with a big picture solution, Rajoy may not be able to save Spain from a fiscal meltdown.
Economy Minister Elena Salgado put a brave face on matters on Friday, saying Spain was able to finance its funding needs and yields on its sovereign debt did not reflect the health of its economy. "Asking for a rescue is totally out of the question," Salgado said at her weekly news conference. The Socialists chose veteran politician Alfredo Perez Rubalcaba as their leader for the campaign after Prime Minister Jose Luis Rodriguez Zapatero decided against running for a third term due to his flagging unpopularity.