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Zapatero meets with Rajoy for two hours on handover of power

Socialist and Popular Party teams agree an agenda for the transition; PP leader wants more information before deciding on spending cuts

Spain's Prime Minister-elect Mariano Rajoy and the outgoing Socialist premier José Luis Rodríguez Zapatero met Wednesday evening to discuss the handover of power to the new government after the Popular Party's resounding victory in last Sunday's general election.

With the country's sovereign debt under severe pressure, the markets have been anxious to know how Rajoy plans to deal with what he himself has described as the country's worst crisis in 30 years. The PP leader, however, so far has kept his cards to himself over vital issues such as who will head up the Economy Ministry.

Rajoy and Zapatero met for two hours at the prime minister's residence in Madrid. The two leaders exchanged views of the current situation and agreed to see each other again shortly.

Zapatero has offered the PP his "maximum collaboration" in the handover process.

The sense of urgency required by the situation was highlighted by the fact that it was 11 days before Zapatero met with the then-PP Prime Minister José María Aznar after the Socialist's surprise victory in the 2004 general elections.

The encounter took place hours after the Socialist and PP teams led respectively by Ramón Jáuregui and Soraya Sáenz de Santamaría had met. The two sides discussed the setting up a channel of information and agreed to negotiate a common stance in meetings in which the outgoing Socialists represent Spain until the new government is in place, which is expected to be just before the Christmas holidays. "Difficult times lie ahead," Jáuregui told Sáenz de Santamaría at the start of the meeting. "Yes, bad times. You must be feeling a mixture of emotion and responsibility," Sáenz de Santamaría replied.

The key issues affecting Spain in the handover such as the economic crisis, international commitments and questions of terrorism and defense will be dealt with by Zapatero and Rajoy.

The first key date on the transition calendar is December 13 when Congress is due to sit again for the first time after the elections after which the PP will start talks with the opposition parties on forming a government. Given the PP has a clear majority in the lower house discussions with the opposition will amount to little more than a compliance with protocol. The investiture debate in the lower house is expected to be held December 20-21.

On the vital economic front, a close advisor of Rajoy said the PP leader wants to know the exact state of the country's public finances before deciding what spending cuts to make to meet Spain's deficit-reduction commitments with the European Commission. "It's not the same to cut 15 billion euros as 30 billion euros," Miguel Arias Cañete, who chairs the PP's electoral committee, said.