Spain's governing Socialists embarked on a second term in office on Monday, facing the twin challenges of a slowing economy and resurgent Basque separatist violence after an election that highlighted the country's deep political divide.
"A Second Opportunity," read Monday's editorial headline in the leading daily El Pais, which noted that Prime Minister Jose Luis Rodriguez Zapatero's Socialists fell short of an absolute majority and would have to rely on some form of an alliance with smaller parties in order to govern.
Offers of help came quickly from the Basque Nationalist Party, which won six seats.
"We hope to contribute to his (Zapatero's) government so that together we can find a definitive solution to the Basque country's political problems," said party president Inigo Urkullu.
However, the Socialists are not expected to form a coalition government but to rely on the ad-hoc support in parliament from smaller parties on individual bills and policies, as the Socialists did in the previous legislature.
The election victory came despite growing concerns over a cooling economy, immigration and resurgent Basque separatists. But Zapatero welcomed the win and promised changes.
Tax breaks for poor
The prime minister has promised tax breaks for the poor and further investment in infrastructure to absorb some of those laid off due to a slowing construction sector.
The Madrid stock market rose slightly on its first day of trading following the vote, rising 0.7 percent after opening the day down.
With 99.9 percent of the vote counted in Sunday's vote, Zapatero's Socialists won 169 seats in the lower house of Parliament, compared to 153 for the conservative opposition Popular Party headed by Mariano Rajoy.
The victory, although an improvement of five seats for the Socialists from the 2004 election, left the party seven seats short of a majority in the 350-seat parliament. Turnout was 75.3 percent.
"The Socialist Party is closer to the absolute majority and it doesn't have to envisage making many deals to form a government," said Carlos Malo, director of the Sigma Dos polling firm.
"I believe this is going to be good for him (Zapatero)," Malo added. "It's going to give him more stability."
The election was held in the wake of the slaying of a former Socialist party councilor, Isais Carrasco, on Friday by suspected Basque militants.
In his victory speech, Zapatero paid tribute to Carrasco, saying he should have been celebrating the victory with his family.
Carrasco was buried Saturday, a day before the vote. Town halls across Spain honored him at noon Monday by holding five-minute long silent vigils.
The timing of the attack on Carrasco was reminiscent of an election-eve massacre by Islamic militants who killed 191 people in a string of bombings against commuter trains in Madrid on March 11, 2004. Three days after that attack, Zapatero won a surprise victory amid a wave of voter outrage at the ruling conservatives, who blamed the attacks on ETA even as evidence of Islamic involvement mounted.
The Popular Party conceded defeat, but took consolation in the fact that it also picked up seats. But both the El Pais and El Mundo newspapers said the result could lead to Rajoy's resignation as party leader, given that it was his second consecutive electoral defeat against Zapatero.
The results were a firm endorsement of Zapatero's policies, which included reforms such as legalizing gay marriage and granting on-demand divorce, once thought unthinkable in the overwhelmingly Roman Catholic country.
"The Spanish people have spoken clearly and decided to start a new era," he told supporters. "I will govern by strengthening the things we have done well and correcting the mistakes."
Zapatero also withdrew Spanish troops from Iraq after he was first elected in 2004 and launched a drive to cede more power to Spain's semiautonomous regions.
The campaign was marked by acrimony, with Rajoy hammering Zapatero on everything from immigration and Spain's semiautonomous regions to the economy.
Many conservatives consider Zapatero's 2004 victory a fluke, and saw Sunday's vote as their chance to correct it. The prime minister's victory was seen as finally giving him a legitimacy that critics say he has lacked.
Although he made a dramatic entrance with the withdrawal of troops from Iraq, Zapatero has since taken a back seat on the international stage. Some say his reticence to make a bigger impression has weakened Spain's standing abroad. Others believe he may tend to foreign affairs with more emphasis this time round.
The campaign was marked by acrimony, with Rajoy hammering Zapatero on everything from immigration to the economy.
In two televised debates between the men, Rajoy used a form of the word "liar" to describe Zapatero more than 30 times; he blamed Zapatero for not doing enough to spur the economy, which is cooling amid rising unemployment and an end to a boom in the construction sector.
Rajoy vowed to make immigrants sign a contract obliging them to respect Spanish customs and learn the language, a position Zapatero's party called xenophobic. The candidates also clashed on Zapatero's willingness to grant more self-rule to Spain's semiautonomous regions. Conservatives warn that will tear the nation apart.
Under the Socialists Spain became the third country to legalize gay marriage and thousands of same-sex couples have wed since the law took effect in July 2005, according to the Justice Ministry.
The government also pushed through laws including fast-track divorce and easier terms for medically assisted fertilization.
All of these issues have left Spain deeply polarized and these divisions will not go away soon, said Enrique Monreal, 35, a publishing company employee.
"It will take several years for things to calm down. Right now it is so tense you are nervous even talking to your neighbor," Monreal said outside a polling station in Madrid.