New Spanish Prime Minister Mariano Rajoy has promised tough economic measures to avert deepening economic crisis.
New Spanish Prime Minister Mariano Rajoy has promised tough economic measures to avert deepening economic crisis.
PHOTO: AFP/Getty Images

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Conservative leader Mariano Rajoy was sworn in as prime minister Wednesday

Socialist Jose Luis Rodriguez Zapatero is the outgoing prime minister

Rajoy had a landslide victory in parliamentary elections November 20

(CNN) —  

Conservative leader Mariano Rajoy was sworn in Wednesday as Spain¹s new prime minister, to begin work on what he lists as his top priority – pulling the nation out of its deep economic crisis.

In a brief ceremony at the Zarzuela Palace presided by King Juan Carlos, the head of state, Rajoy stepped forward and read aloud the oath.

He then left for the prime minister¹s compound to prepare for the public announcement of his Cabinet ministers, a closely-guarded secret, later in the day. They will be sworn in on Thursday.

Rajoy won a landslide election victory in parliamentary elections November 20. On Tuesday, he won the investiture vote in Parliament, and he then got a call from U.S. President Barack Obama.

A White House statement said Obama spoke with Rajoy to congratulate him and “to underscore U.S. support for his economic reform.”

“The two leaders agreed on the vitality of the alliance” between Spain and the United States, the statement added.

The Obama administration previously offered its support for the economic reforms of the outgoing Socialist government, but that government’s unpopular austerity measures and the economic crisis led to its defeat at the polls.

About 5 million people in the country are jobless. Spain has an overall unemployment rate of 21.5%, but it youth unemployment rate is a staggering 45%.

In a speech to Parliament on Monday, Rajoy reiterated his campaign theme that fixing the broken economy, including growth and job creation, will be his top priority.

He said 16.5 billion euros (about $21.5 billion) will be cut from the budget next year to meet Spain’s deficit reduction target. Critics say he has yet to explain where the deep cuts will be made, but Rajoy said he can’t make the 2012 budget until his government takes power.

In the parliamentary speech, Rajoy promised to update pension payments, which were frozen under the Socialists amid much public outcry. But he said that would be the only spending increase in his new budget.

He said there would soon be labor market reforms to make Spain’s workforce more flexible and competitive, and that there would be mergers and takeovers in Spain’s troubled banking sector – which holds a lot of bad debt from 750,000 unsold new homes that went up during the real estate boom but before the financial crisis and credit crunch set in.

Rajoy said most of Spain’s national holidays that fall on weekdays would be observed on the closest Monday to improve productivity. Earlier this month, two national holidays fell on a Tuesday and a Thursday in the same week, and employers complained it was a lost week for worker productivity.

In an effort to help cash-strapped professionals and small businesses, Rajoy said they would not need to pay value-added tax on their goods and services until they collect back payments. Many of those debts are owed by government administrations at all levels, which are months in arrears in paying their suppliers due to the crisis.

Rajoy¹s first cabinet meeting is scheduled for Friday.