Spain’s unpopular prime minister called early parliamentary elections last week in the wake of the release of dismal new unemployment figures. José Luis Rodríguez Zapatero won’t stand for reelection and it seems highly unlikely that his socialist party could maintain its present majority. What the opposition conservatives would do to alleviate Spain’s economic crisis remains ambiguous however.

The number of Spanish unemployed fell only slightly last quarter to 21 percent — the worst joblessness rate in the European Union. It may get worse still toward the end of the year when seasonal jobs disappear.

Meanwhile, the specter of Spain’s demise continues to worry Europe. Its creditworthiness was downgraded earlier this year as the government struggles to mend its deficit. Zapatero’s cabinet designed a budget last year that would cut the deficit in half, down to 6 percent of GDP this year. Austerity measures include a 7.7 percent reduction in government spending, a 5 percent pay cut to public-sector salaries and an increase in personal income taxes for those earning more than €120,000 euros a year.

The socialist government also promised labor law and pension reforms to boost Spain’s competitiveness but with trade unions marching against austerity and Zapatero’s approval rating down to 25 percent, the left appears to have lost the credibility necessary to enact them.

Former interior minister Alfredo Pérez Rubalcaba will lead the socialists into November’s election. Although his party was crushed at regional polls last May, Rubalcaba has begun to eat into the opposition conservatives’ lead. If elections were held today, People’s Party leader Mariano Rajoy would find himself at the helm of a minority government.

Rajoy has announced an economic “shock plan” if elected, anticipating protests and strikes during his first year in office but enough to derail a reform agenda. “The measures will be tough and we will have trouble with a lot of people, but people will have to understand that we lived beyond our means. Spaniards will understand,” said one party leader.

The conservatives could find support from nationalists parties from Basque country and Catalonia for pro-business policies but major welfare reforms might not be enacted. “I do not intend to make social cuts,” Rajoy said this weekend. He promised tax and spending cuts but details on fiscal policy have so far not been forthcoming from the man who is widely expected to be Spain’s next prime minister.