Spanish Prime Minister Jose Luis Rodriguez Zapatero announced the end of the current legislature on Monday, signaling the run-up to a general election that his Socialist Party is expected to lose.

"I want to say thank you, above all, to the people of this country for having entrusted me all this time with the responsibility of leading the Spanish government," he said. "I can't imagine a greater honor."

Zapatero, who came into power in 2004, will not run for a third consecutive term. In July, he brought forward the date of the election from spring 2012 to November 20, citing economic reasons.

Zapatero met with King Juan Carlos Monday, as the monarch observed the protocol of approving the calling of elections.

The campaign itself officially begins on November 4, but the close of the current legislature means campaigning is effectively under way. Zapatero's successor as Socialist Party candidate, Alfredo Perez Rubalcaba, aims to overhaul a substantial gap in the polls caused in great part by the economy's difficulties.

The veteran Rubalcaba enjoys a strong personal approval rating among Spaniards. His rival, Mariano Rajoy of the conservative Popular Party (PP), is far less popular and lost both the 2004 and 2008 elections. However, for most of Zapatero's second term in office, the PP has been ahead in the polls, a lead that is now 14 points, according to the polling firm, Metroscopia.

"Either the Popular Party will get a full majority, or they'll come close to getting one," said Ramon Pacheco Pardo, an expert in Spanish politics at King's College, London.

"The Socialists might close the gap somewhat, but not enough to govern by themselves, or even to form a majority."

Economy to dominate campaign

Zapatero's party does not have a majority in Congress and has pushed legislation through by forming alliances with smaller parties.

The economy has dominated Spanish politics since the country went into recession in 2008. Spain has struggled to emerge from that crisis and the International Monetary Fund expects growth this year to be virtually flat.

In addition, the country has been battered in recent months by the kind of market speculation that led to Greece, Ireland and Portugal requesting bailouts from the European Union. The lack of growth, a high deficit and Europe's highest jobless rate, at over 20 percent, have contributed to a rollercoaster ride for Spanish bond prices.

"People blame Zapatero - rightly or wrongly - for the economic crisis and things aren't going to improve by the time of the election," said Pacheco Pardo, who expects the economy to be the focus of the campaign.

For the last year, Zapatero has been implementing a raft of unpopular reforms in an attempt to stave off the threat of a bailout. These have included tax increases, civil service pay cuts and a pension freeze. Earlier this month, the Socialists and PP reached a rare agreement on the economy, when they introduced a controversial reform to the Constitution that limited the public deficit.

An unpopular U-turn

Victor Sampedro, a political expert at Madrid's University Rey Juan Carlos, believes such measures are the main reason the Socialists are lagging in the polls.

"The Socialist Party did a 180-degree turn in terms of policy halfway through this legislature, and that alienated it from its traditional voters," he said.

The Socialists and PP traditionally dominate mainstream politics, although in recent months the indignados (the indignant) protest movement has emerged, seeking to change Spain's economic and political structure. The movement was born during the campaign leading up to May local elections, in which the Socialists suffered record losses.

The indignados are likely to be in the spotlight again during this campaign and Rubalcaba has acknowledged that some of their demands for greater transparency and democracy in public life should be heeded.

However, the indignados could be yet another problem for the Socialists.

"They could be a factor in the campaign," said Pacheco Pardo. "Although their main influence could be to persuade people who might otherwise have voted for the Socialists to abstain."

Author: Guy Hedgecoe, Madrid
Editor: Martin Kuebler