Alvaro Barrientos, Associated Press
MADRID — Two northern regions in Spain are holding elections for their legislatures Sunday in the first popular test of the central government's stringent austerity policies since it came to power late last year.
A deepening financial crisis and how best to address the nation's separatist tensions are the main issues facing political leaders and voters in the turbulent Basque region and in northwestern Galicia.
With 2.7 million voters, Galicia is a traditional stronghold of the ruling Popular Party and the homeland of Prime Minister Mariano Rajoy, so an upset there would rock the PP regionally and nationally.
Spain is in its second recession in three years and has near 25 percent unemployment. Since being voted to office in general elections in November, Rajoy has been forced to hike taxes, cut spending and introduce stinging labor reforms in a bid to persuade investors and international authorities that Spain can manage its finances without the need for a full-blown bailout.
However, Spain's public finances have been overwhelmed by the cost of rescuing some of its banks and regional governments, many of which have suffered heavy losses in the property sector crash of 2008.
Some observers believe Rajoy will seek a bailout soon after the elections.
The government's austerity measures have led to protests across the country, some of which have ended in clashes between demonstrators and police. The financial crisis has also brought to the fore calls from some of Spain's 17 semi-autonomous regions for greater independence.
Spain has separatist groups in Galicia, the Basque region and prosperous and influential Catalonia.
About 1.8 million Basque voters are likely to oust Socialist leader Patxi Lopez — who ruled thanks to an agreement with the PP — from the 75-seat legislature in the industrious and well-off northern region that borders France. The Basque region has been wracked by decades of separatist violence.
"We hope this election succeeds in bringing us peace, so we can reach an understanding between ourselves and let us know how to make concessions," said Sister Teresa Ormazabal, a nun in the Basque region's largest city, Bilbao.
Lopez was jostled by demonstrators carrying placards backing violent Basque separatist group ETA as he voted early Sunday.
ETA, which stands for Basque Homeland and Freedom, is classified as a terrorist group by the European Union, the Unites States and Spain.
The group is blamed for the killings of more than 825 people in a violent campaign of bombings and shootings for an independent Basque state straddling the border with France.
ETA was decimated by arrests over recent years and declining grass roots support among Basque nationalists who stomached its activities in exchange for working toward the goal of independence.
It announced a definitive cease-fire last year but Spain insists it must lay down its arms and dissolve.
Lopez said these were the first elections in the Basque region where people can vote "in freedom from fear."
Alberto Nunez Feijoo, who is the president of Galicia's regional government and the head of PP there, was also jostled by a group of protesters as he went in to cast his ballot.
Associated Press writer Jorge Garma in Bilbao contributed to this report.
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