Spain of faces obstacles to reform

Bloomberg News customers lined up for national lottery tickets in Madrid on Thursday. Unemployment in Spain rose for the fourth straight month in November.

Performing markets which is increasing pressure on Spain Prime Minister José Luis Rodríguez Zapatero to force difficult reforms from the political capital, facilitate the investor concerns, may be necessary.

The Socialist Prime Minister faces obstacles on two fronts. Conservative opponents, which control important regional Governments call for national elections during the Socialist Government's traditional plays, such as trade unions, are on Mr Zapatero's leadership counts Court.

Associated press of Spanish Prime Minister José Luis Rodriguez Zapatero came in the Parliament of a meeting in Madrid on Wednesday.

Meanwhile have € 67.5 billion during the Ireland (88.7 billion$) bailout, sovereign debt increased concerns Spain and Portugal. Pressure is on Mr Zapatero and cutting the country's large pension system, accelerate the overhaul of the troubled savings bank sector and reassure the international community in General that Spain a separate building, Greece or Ireland.

"He is rock and a hard place between two," said Sebastian Balfour, Emeritus Professor of contemporary Spanish studies at the London School of economics. "It is very difficult, by markets demand to carry on the type of economy."

Mr Zapatero stakes are high: analysts say all tax assistance from the European Union would trigger almost certainly ahead elections it would be unlikely to win.

Mr Zapatero may, after the ECB Thursday still would it European bonds purchase a grace period and extend some emergency due 1 end said until Jan. programs. Spanish Government bonds - and euro-zone countries other fight the debt - rallied strongly. Also said the Spanish Treasury Thursday sold € 2,468 billion of the three-year bonds in a deal that went relatively well analysts. Spain has other great bond sale later in the month.

Spain had significantly higher yields to attract sufficient interest of investors to pay. Even with the day rally yield Spanish 10 year bonds 5.2%, 2.3 percentage points more than similar German bonds. Similar Irish bonds yield of 8.95% underlines how Spain is even better than Ireland.

Mr Zapatero was adamant that Spain needs no bailout. He said in an interview with CNBC Thursday "is going Spain not having to tap each EU fund." He urged investors to see Spain as "an attractive country in the long term."

Another bid to calm markets Mr Zapatero on Wednesday announced plans, parts of the country airport authority and lottery company debt pay off privatize and said he would cancel unemployment benefits for the long-term unemployed.

At home, his efforts to calm investors have generated criticism from opposition politicians, moving to see as insufficient.

"Every time, when the markets begin nervous investors excited what the Spanish Government goes to come up with next," says Alvaro Nadal, an industry spokesman for the conservative people's Party.

Now has the left base of his Socialist party Mr Zapatero's annoyed cost-cutting measures have been. Trade unions called a nationwide strike in September, and have threatened further measures how the Government is trying to reduce costs in the face of an ailing economy.

After Thursday, had new data Spanish jobless claims rose again in November from October 24,318 or 0.6% to 4.1 million during the week of the EU agency Spain statistics data showed early an unemployment rate of 20.7%, twice the average rate of 16 countries to use the euro currency.

Spain will hold widespread regional and local elections in the spring and Mr Zapatero to call a national choice before March 2012.

"He is trying until the regional elections, hanging," said Emilio lamo de Espinosa, sociology professor at the Complutense University of Madrid. Then if, as expected, the Socialist Party bad rates, Mr Zapatero may be known, he will not stand as a candidate in the national survey, he said.

A spokesman for the Prime Minister said Mr Zapatero would be pushed down by political concerns. "He will do what he has to do location Spain for economic growth," the spokesman said.

To be sure, Mr Zapatero has made some progress in the implementation of reforms forward in Spain broken political landscape. By the Bank of Spain, he has inspired consolidation Spain's troubled savings bank sector, although delays remain. In October, he gave an agreement with Spain's Basque nationalist party and a small coalition of the Canary Islands to support the budgetary and other economic related legislation.

But some question whether this informal Coalition remains intact. Past support was fragile. His Government won such as passage in May of € 15 billion in cost-cutting measures, by the European Union, required by a single vote.

In the meantime have Spanish and Italian officials privately pushing for more decisive action by the European Central Bank to prevent further spread of the crisis.

Write toSara Schaefer Munoz sara.munoz@wsj.com and Jonathan House at jonathan.house@dowjones.com

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