Spaniards battling a deep recession have voted in two regional elections that could deal a blow to Mariano Rajoy, prime minister.

Sunday’s elections are full of risks for the Spanish leader as he agonises over whether and when to request a eurozone rescue line to help finance the nation’s soaring public debt.

Rajoy’s right-leaning Popular Party has imposed tough austerity measures on the eurozone’s fourth-largest economy and now faces votes in the premier’s home region of Galicia and in the Basque Country.

Many investors believe Rajoy is waiting to get the two votes out of the way before requesting a rescue, keeping world financial markets on edge.

In Galicia, which has 2.7 million eligible voters including 400,000 abroad, the Popular Party was defending a tight, absolute majority. Opinion polls gave it hopes of keeping power.

Left-wing separatist coalition Euskal Herria Bildu, headed by Laura Mintegi, is expected to finish second [Reuters]

In the Basque Country, a pro-independence coalition is expected to enjoy a surge in support in the first regional vote since the armed separatist movement ETA renounced the use of bombs and guns.

Polls in the Basque Country showed the nationalist Partido Nacional Vasco (PNV) is set to knock aside a Socialist government in the elections.

A new coalition of left-wing Basque separatists, Euskal Herria Bildu, is expected to finish second, behind the PNV, forcing the latter to make an alliance.

A new coalition of left-wing Basque separatists, Euskal Herria Bildu, is expected to finish second, behind the PNV, forcing the latter to make an alliance.

Bildu was created last year to fill the space left by the Batasuna party which was outlawed in 2003 for alleged ties to ETA, and includes independent candidates who are former Batasuna members.

ETA is blamed for 829 deaths during its four-decade armed campaign for an independent Basque homeland in parts of southern France and in the northern Spanish region.

Basque independence

Inigo Iturrate of the PNV, said the election is an opportunity to consolidate peace in the Basque Country.

“We are living an unrepeatable opportunity in this country and we can’t miss it. We have to consolidate the peace process, we have to get ETA once and for all to lay down the weapons, to dissolve and say goodbye for ever to this country so they let everyone to do politics and solve problems through conversations,” Iturrate said on Friday.

Meanwhile, Laura Mintegi, the head of Euskal Herria Bildu coalition, called on voters to come out in force in order to achieve their long term goal of a state wholly separate from Spain.

“On these times the brand Spain is a burden for the Basque Country“ – Inigo Iturrate, Partido Nacional Vasco

“People that are in favour of independence and consider themselves to be supporters of the [political] left, aren’t ordinary voters, they are political activists,” she told the cheering crowd in the city of San Sebastian on Friday.

Together, PNV and Euskal Herria Bildu, will likely sweep around sixty per cent of the vote, putting the cause of Basque independence firmly back on the negotiating table.

Asked whether his party would request independence for the northern Spain region, Iturrate said the Basque Country would have better credit rating as an independent region.

“On these times the brand Spain is a burden for the Basque Country. It is a burden for the Basque Country because it makes us compete with a disadvantage over our possibilities in exportation and the internationalisation of our companies,” he said.

The Basque Country has healthy finances and small deficits compared with many other regions and credit rating agency Standard and Poor’s rates it two notches higher than the long-term rating on the sovereign.

Rajoy, recently announced 65bn euros ($80bn) in spending cuts to try to reach a deficit target of three per cent of gross domestic product by 2014, as he tries to keep Spain from following Greece, Ireland and Portugal into an international bailout.

On Friday, Rajoy was greeted by more than a thousand campaign faithful in Galicia, Rajoy’s home region and political

stronghold, he introduced local Popular Party candidate Alberto Nunez Feijoo.

“I’ve been in politics for 30 long years, and I want to continue for a few more” said Rajoy. “And here we’ve never lost elections. Never. The Popular Party always wins elections in this province.”