Three things on the new Spanish Prime Minister’s to-do list

Ten months after first going to the polls, Spain finally has a new Prime Minister (PM). Mariano Rajoy of the Popular Party (PP) has been reinstated as the PM after serving between 2010-15, and then throughout this year as an interim while the various leading parties tried in vain to form an alternative government.

But after months of deadlock, the Socialists (PSOE) agreed to stand aside and allow the PP to reclaim parliament – albeit with vastly reduced power.

So bearing this in mind, here are three things that should be high up on Mr. Rajoy’s to-do list… 

1. Handle the economy gently

During the rudderless 2016, Spain’s economy has grown above and beyond projections, and will likely end the year with a GDP increase higher than three per cent. In itself this would be encouraging, but for such growth to have occurred in a country that has had no settled government all year is mightily impressive.

So what does this mean? It means that the laws and policies put in place by the PP during its previous government had the desired effect: to liberalise labour laws, energise the job market and restore faith in Spain’s banking, real estate and hospitality industries. All Rajoy has to do is lightly grasp the wheel and let Spain’s economy steer itself.

2. Make friends in high places

Rajoy returns to the role as Prime Minister with his powers vastly reduced, heading into government with just 137 PP seats in parliament, out of a total of 350. This means that the PP’s policies will come under heavy scrutiny by the many left-leaning politicians in the chamber.

For Rajoy, he needs to be aware that some of the more conservative measures his government introduced last time will face stiff opposition this time around. The upshot of this is likely to be more compromise and a more centrist outcome of policy, which could do wonders for certain industries that have been battered left and right in recent years, such as Spain’s policies towards solar power and renewable energy.

3. Face the Brexit question, and fast

The issue of Brexit was never going to be far from the thoughts of whoever became the new Spanish PM. With more than one million Brits living in Spain and many thousands of Spaniards living in the UK, managing the post-Brexit relations between the two countries is going to be one of the most critical decisions the new PM will have to face.

So far, Rajoy has made encouraging noises on the matter, to the effect that little will – or should – change for Brits who already live in Spain. However, with thousands of Brits eyeing the opportunity to move to Spain every single month, Rajoy is going to have to find ways to ensure this process remains as smooth and as simple as possible.