With almost 98 per cent of the vote counted the Popular Party won 186 seats in the 350 seat congress garnering a strong mandate to push through further austerity measures in an attempt to turn around an economy that risks being engulfed by the sovereign debt crisis.

[…]The socialists suffered their biggest defeat since Spain became a democracy more than 30 years ago, punished by an electorate for their perceived bungling of the economic crisis that has left 5 million unemployed.

[…]Alfredo Perez Rubalcaba, 60, the prime ministerial candidate who took the helm of the PSOE when Jose Luis Rodriguez Zapatero said he would not seek a third term, conceded defeat after the party won just 110 seats down from 169 in 2008.

“The Socialist Party did not have a good result. We clearly lost the elections,” he told party faithful in Madrid.

The conservatives won roughly 44 per cent of the votes and the Socialists took 29 per cent, according to official election results.

The Wall Street Journal analyzes the election result.

Excerpt:

Formerly a solid growth engine for the region’s economy, Spain today is grappling with a burst housing bubble, a 21% unemployment rate and borrowing costs near levels that triggered the international bailouts of several fiscally frail euro-zone peers.

Analysts said the election of Mariano Rajoy, the conservative leader who has committed to austerity and economic overhauls, could help improve investor sentiment toward Spain, but won’t fundamentally change perceptions that Spain and other peripheral nations are risky investments. For that, they said, European Union institutions will have to extend more support, possibly by converting the European Central Bank into a lender of last resort.

[…]The groundswell of support for Mr. Rajoy is chiefly the result of a deep economic crisis that has forced Socialist Prime Minister José Luis Rodríguez Zapatero to make unpopular budget cuts and economic overhauls. Earlier this year, Mr. Zapatero said he wouldn’t seek re-election and his party chose the veteran Mr. Pérez Rubalcaba to succeed him.

Analysts said the fact that change in Spain was coming via the ballot box was another sign of a better track record on governance, which has helped to keep Spanish borrowing costs below those of its fiscally frail peers.

Although Mr. Zapatero lacked a parliamentary majority, he was able to deliver all the measures he promised last year, including a public-sector wage cut, a pension freeze and a labor-market overhaul.

As a result, a clear victory for Mr. Rajoy, who has promised to take overhauls much further than his Socialist rivals, is widely expected to shore up confidence in the Spanish economy inside and outside the country.

Many recall the Popular Party-led governments of José María Aznar of 1996-2004 for their far-reaching moves that helped set the stage for a lengthy economic boom. Mr. Rajoy headed various ministries during that time.

At a polling station in Madrid’s Chamberí district, 18-year-old engineering student Diego Cubero said he had voted for the first time and chosen the Popular Party.

This is the end of a huge mistake made by the Spanish people in 2004 when they elected the socialists. Never, ever, ever elect socialists unless you want your economy to end up like Greece. That’s what socialists do to economies.