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Socialists in Trouble in Spain

(Reuters) – Spain’s Socialist government grappled with a deepening political crisis on Sunday, with reforms of a “dysfunctional” labor market hanging by a thread and its chances of survival beyond the autumn looking shaky.

Weekend opinion polls showed Prime Minister Jose Luis Rodriguez Zapatero’s government far behind the opposition, and that many voters believe he will have to call early elections as support for a 2011 austerity budget will be hard to muster.

“The government faces not only an economic crisis, but a political crisis too because the way it’s governing is not good enough,” said Angel Laborda, an economist at Spanish savings banks consultancy FUNCAS. “I believe that early elections will be called, sooner or later.”

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