Spanish Prime Minister Mariano Rajoy’s right-leaning party yesterday retained power in his home province of Galicia despite recession and biting austerity measures, a late exit poll showed.

If the survey of voters at yesterday’s regional election proves accurate, Rajoy has avoided a political humiliation that would have undermined his standing as he tries to convince world markets that he can fix Spain’s finances and economy.

But a second regional election in the Basque Country added to the Spanish leader’s challenges as an exit poll showed a new separatist coalition had finished in second place, just after the Basque Nationalist Party which is seeking greater autonomy for the region.

The two regional votes came at a critical time for Rajoy, who is agonising over whether and when to seek a eurozone sovereign rescue to finance the nation’s runaway public debt.

His Popular Party (PP) captured 39- 42 seats in the 75-seat Galician regional parliament, slightly more than the 38 seats it had in the outgoing assembly, according to an Ipsos exit poll.

The PP had been defending a tight but absolute majority in Galicia, Rajoy’s home region, which has a population of 2.8 million, and opinion polls a week before the poll indicated it stood a good chance of success.

Voters apparently decided to stick with Rajoy’s party despite an unemployment rate that has climbed sharply to 21 per cent, nearing the national rate of 25 per cent.

The economic pain and cuts in education and health are fuelling discontent across the 17 powerful regions.

Those sentiments were especially raw in the Basque Country, which is holding its first regional vote since armed separatists ETA renounced the use of bombs and guns.

In the Basque Country, the separatist Euskal Herria Bildu coalition finished in second place with 23-26 seats out of the 75 up for grabs, just behind the conservative Basque Nationalist Party (PNV) which captured 24-27 seats, an Ispos exit pollshowed.