Spanish Prime Minister, Mr Jose Maria Aznar, who won a surprising landslide majority in the general elections 11 days ago, is preparing to name his new cabinet after four successful years in government.
Unlike his first term in office, when his minority Popular Party government was forced to rely on the support of other parties to pass legislation, Mr Aznar now has a free hand. Although few expected Mr Aznar and his centre-right party to lose the elections, pollsters predicted a second term with only a narrow majority for Mr Aznar.
In the event, he won 183 seats in the 350-seat lower house of the Cortes, or parliament.
His victory was to a large extent thanks to Spain's healthy economy, which has jumped by leaps and bounds since he came to power in 1996, and persuaded the voters to stick with the party which had brought them that "feel good" factor.
Much of the credit must go to the outgoing Economy Minister, Mr Rodrigo Rato, who is tipped to take over the portfolio of foreign affairs. But it was greatly enhanced by the economic situation the US-educated Mr Rato inherited from his Socialist predecessors, who had put in the tough groundwork, taken Spain into the EU and prepared the nation for entry into the euro.
The Spanish economy is currently growing at an annual rate of 3.8 per cent, some 0.6 percentage points faster than the rest of the EU.
But there are worrying signs that all is not rosy.
Unemployment remains too high and inflation is rising too fast. The 12-month rate for consumer prices rose to 3 per cent last month - up from 2.9 per cent in January - the worst inflation rate since the Popular Party first came to power, making it one of the highest in the euro zone, and well above the government's target of 2 per cent for the year.
Acting Secretary of State for the Economy, Mr Cristobal Montoro, last week blamed the inflation rise on the 21 per cent increase in fuel costs over the past 12 months.
But Mr Emilio Ontiveros, a leading financial analyst, believes that this is only a partial excuse, and that the incoming government could take steps, such as reducing energy taxes, to keep the price down.
"The new government must introduce structural reforms and liberalising measures to oxygenate competition," he says.
"Before the elections, they had the excuse that they didn't have sufficient parliamentary support to take controversial measures but now they have a huge majority in parliament and have no excuses for not taking whatever steps are necessary."
He points out that telecommunications costs are still too high in Spain, that property prices are inflated and too strictly controlled and that urgent steps are needed to open up liberal professions - such as notaries and lawyers, who keep their professional charges high and make it difficult for new entries into their profession.
"Property prices are very important in our economy and it influences the inflation rate. Spaniards are reluctant to rent and everyone wants to buy his own little pad," he says.
From the outset, Spain has been a loyal supporter of Europe and its organisations but there was considerable surprise in some financial circles when the country, after considerable sacrifice, managed to meet the criteria for entry into the single currency in the first wave.
"Banking on the euro was part of the Socialist policy before the conservatives came to power, but no one banked on it falling so fast or on the strength of the dollar and sterling.
"But, indirectly, it has been good for Spanish exports, particularly those to Latin America, which accounts for more than 10 per cent of our overseas sales."
He is optimistic the euro will improve before too long and believes that the currency is suffering from teething problems which could have been foreseen by those planning its introduction.
It is a symptom of lack of conviction from some of the member-states of the euro zone, he believes.
"The European Central Bank has been too slow and confused in its actions," he says. "Spain's economy is very integrated into Europe. If the euro does well, Spain will do well."
