Spain's Socialists see voter support slide

Support for Spain's governing Socialists has fallen further behind that of the conservative opposition, according to an opinion poll taken after austerity measures including wage cuts for public workers.

The GESOP poll published in newspaper El Periodico on Saturday showed the Socialists with 34 percent support, behind the opposition Popular Party on 42 percent. The Socialists had slipped 2.5 percentage points since the last GESOP poll in December while the PP was unchanged.

The poll was taken from May 17-21, shortly after the government announced a plan to save 15 billion euros (12.7 billion euros) through civil servant pay cuts and welfare freezes.

Credit ratings agency Fitch downgraded Spain's public debt to AA+ from AAA on Friday, as the government struggles to convince markets that it cut a budget deficit running at 11.2 percent of gross domestic product in 2009.

Falling opinion poll support is more bad news for Prime Minister Jose Luis Rodriguez Zapatero, whose minority government came close to possible collapse on Thursday when the austerity measures squeezed through parliament by only one vote.

The government was also in last-ditch talks on Saturday with unions and business to try to hammer out a much-anticipated labour market reform which economists say is vital to overhaul Spain's uncompetitive economy.

The unions have threatened to call a general strike if the reform goes ahead without their consent, spooking world markets fearful of a Greek-style economic meltdown in a country with almost four times the GDP.

According to the poll if an election was conducted today, the PP would hold a near absolute majority in a 350-seat parliament with between 173 to 176 seats, while the Socialists would have 131-134 seats.

Normally, Spain would hold its next general election in 2012, but this could be brought forward if the government failed to pass a bill and was forced to a call a vote of no-confidence.

One candidate for triggering an election would be failure of the government's 2011 budget bill at the end of the year. Many parties have already said they will vote against it.