Pledging cash for newborns might not make much difference to Spain's low birth rate, but it has given a small boost to the Socialist government in its drive to win general elections due by March.

Even one of the government's most reliable supporters, left-leaning newspaper El Pais, was sceptical about the motives for this week's surprise announcement by Prime Minister Jose Luis Rodriguez Zapatero of 2'500 euros for each newborn. “The prime minister's proposal is being generally seen as an election ploy, and not an attempt to draw up a coherent set of social policies to assist families,” El Pais wrote in an editorial which cast doubt on the measure's effectiveness.

But the baby bond, revealed in this week's State of the Nation debate, has already paid off for Zapatero, according to one opinion poll, which showed him easily defeating opposition leader Mariano Rajoy in the three-day parliamentary event. While Zapatero's announcement stole the show in a debate much of the population ignored, Rajoy of the conservative Popular Party spent most of his time berating the government for not being tougher on Basque separatist rebels ETA.

The Socialists have a narrow lead over the PP in polls ahead of the elections, despite the failure of one of its key policies -- its attempt to negotiate peace with ETA, which called off a truce in June five months after bombing Madrid airport. Under Zapatero, Spain has continued its economic boom, now more than a decade old, and the government has passed social reforms including legalising gay marriage and insisting on equal representation for women in voting lists. But high levels of immigration, while providing cheap labour for Spanish companies, have unsettled some Spaniards, and rocketing house prices have made it difficult for young people to buy their first home.

Recent OECD figures, which showed average real wages have actually fallen over the past 10 years, also suggested that the benefits of a dynamic economy are not being shared evenly. However, with employment still strong and growing consumer credit not likely to dampen the economy in the very near future, Zapatero is confident he can sell the message of a richer Spain. “The economic outlook is still good between now and March and his platform will therefore be a combination of that plus social rights,” said Charles Powell, a professor at Madrid's San Pablo-CEU University. A wild card in the election could be played by ETA, said Powell. “The big question mark is of course, if there is a terrorist attack, how will people respond?” he said, adding that an attack might not necessarily hurt the government now that it has broken off talks with the rebels.

The PP's current strategy of concentrating on ETA and accusing the government of gradually eroding central government control of Spain's regions, is apparently failing to win over swing voters.


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