Spanish voters to pass judgement on austerity policy

Two northern regions held elections for their legislatures yesterday in the first popular test of Madrid's stringent austerity policies since Mariano Rajoy came to power late last year.

A deepening financial crisis and how best to address the nation's separatist tensions are the main issues facing political leaders and voters in the turbulent Basque region and in north-western Galicia.

With 2.7 million voters, Galicia is a traditional stronghold of the ruling Popular Party and the homeland of Mr Rajoy, the Prime Minister, so an upset there would rock the PP regionally and nationally.

Spain is in its second recession in three years and has near 25 per cent unemployment. Since being voted to office in November, Mr Rajoy has been forced to raise taxes, cut spending and introduce stinging labour reforms.