Spain’s socialists suffered their worst performance in regional elections this weekend since democracy was restored to the country in the early 1980s. Prime Minister José Luis Zapatero’s ruling party is blamed for Spain’s lackluster economic recovery and high unemployment rate, the worst in Europe.

Thousands of city councils and thirteen out of the country’s seventeen regional legislatures were up for grabs on Sunday. The socialists lost control of their former municipal strongholds of Barcelona and Seville as well as the Castilla-La Mancha region where they had governed for 28 years. Just in three regions were the socialists still in the lead. Nationally, the opposition People’s Party enjoyed a ten point lead.

Conservatives claimed control of Spain’s richest and most populous state in December of last year and have been on the rise nationwide for close to two years. Zapatero’s government is regarded as incompetent by many on the right and increasingly under fire from its own union backbone. In the face of mounting budget deficits, the socialists have been forced to heavily slash public spending, much to the dismay of their electorate.

When Zapatero came to power in 2004, while the country was riding a real estate boom, the prime minister expanded Spain’s welfare state with higher minimum wages and improved health insurance coverage. He made scholarships available to all youngsters, introduced rent subsidies, free child care and made health care for seniors more affordable.

In an attempt to diversify Spain’s economy, the socialists invested in renewable energies, bioengineering and infrastructure but in the process, probably destroyed more jobs in traditional industries than they created.

Seven years later, confronted with a 10 percent budget shortfall, the government froze pensions, increased the retirement age, trimmed union bargaining rights and cut public-sector salaries. The alternative, Zapatero argued, was bankruptcy, but his supporters see no improvements in their daily lives. One out of five workers is still without a job while the unemployment rate among the young is even more dramatic. A government hiring freeze and the collapse of the housing market are mostly to blame.

Increasingly unpopular, Zapatero announced last month that he will not seek a third term as prime minister in next year’s general election, hoping that his party can find a viable candidate to reinvigorate the left.