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Another key issue is labor reform. "The labor market is crying out for an overhaul of collective bargaining (unions and employer associations both oppose it), and an overhaul of unemployment insurance and the costs involved in [worker] severance," says Argandoña. "The four million new jobs created during the administration of the Popular Party represent a significant achievement," adds Melle. "Now we must undertake a qualitative labor reform that addresses the precarious nature of temporary work. And, as everyone involved agrees, we must reduce the 14 types of [labor] contracts down to four."

According to Mulas-Granados, the goal is "to achieve greater employment flexibility and stability." That is because "business people have no incentives to establish more long-lasting relationships with labor … The reform they want to carry out is not unilateral. They will have to create a consensus in support of the proposal." One goal, according to Pampillón, "is to do away with temporary work. Clearly, in recent years, the rate of temporary jobs, while very high, has continued to decline [from 35 percent of all employed workers in 1995 to 31 percent in 2003]."

In any case, "you can't apply this approach in one day," notes Mulas-Granados. "It has to be achieved step-by-step, gradually." Argandoña concludes that there is no doubt about at least one thing: "The new chief executive won't be getting bored over the next four years."

Predictable Turnabout in Spain's Foreign Policy
"Unlike other countries, Spain has no guidelines for international relations on the national level," points out Sara González, professor at the Complutense University in Madrid. "It is very much influenced by the political party in power. A country cannot change its foreign policy as party positions change. That projects an image of weakness and a failure to take a leading role. A weak position in the international arena isn't helpful to the economy. Spain's interests," she adds, "should be defined and a position should be mapped out."

In what ways has Spain's foreign policy changed? Under Popular Party rule, José María Aznar promoted closer relations between Spain and the United States, which was seeking international support to combat terrorism more effectively. For 30 years, Spain has been paying a social price in its battle against terrorists. Yet the Popular Party ultimately derived no political dividends from its U.S. alliance. On the contrary, the PP fell from power. Moreover, the opposition realized that getting closer to the U.S. would mean getting further away from the European Union.

The Socialists' arrival in power means a predictable turnabout in Spain's foreign policy. One of Zapatero's first announcements was that he would comply with his promise to withdraw Spain's troops from Iraq. Equally predictable is Spain's rapprochement with the Franco-German axis and its determination to end the deadlock regarding the European Constitution.

Miguel Angel Moratinos, a candidate to become Spain's next foreign minister, told the Spanish newspaper Expansion that Spanish policy now "passes through Europe" and relations with the United States "will be managed from Brussels, not from Madrid."

Regarding the European Constitution, Moratinos contends that "it is not necessary to maintain the arrangements made in Nice. Last December, Spain and Poland blocked approval of the first European Constitution because it meant breaking with the terms of power-sharing provisions in the Treaty of Nice. The new terms established a system of a double majority – based on both the number of states and their population. Both Spain and Poland would lose some share of the powers previously outlined for them in the Nice agreement.

Apparently, the new government aims to end the deadlock regarding negotiations for the European Constitution. However, as Gonzalez notes, it still isn't clear how that will be achieved. "Would they give up a share of power in exchange for nothing?" asks González. "No one cedes power to France and Germany for nothing. I don't know what kind of strategy lets those two countries achieve their goals at no cost."

When it comes to foreign policy, the Socialists' challenge is "to connect together all the different isolated proposals (they made during the electoral campaign). If they don't manage to do that, it will be very hard to create a sense of security in the [securities] markets," notes González. "International investors have no political ideology; they don't care about that. The only thing they want is tranquility, stability, and countries that are strong. That's what drives business and investment."

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