MADRID - As Spain peers over the precipice at a full-blown bailout, analysts say it's not the economic consequence that scares the government, it's the political price.
Barely nine months after taking power, Prime Minister Mariano Rajoy blames the dire economy for forcing him to make spending cuts and tax rises amounting to 102 billion euros ($131 billion) by the end of 2014.
Rajoy faces two regional elections next month, street protests and sliding popularity: in a poll released Sunday by El Pais, 73 percent disapproved of his leadership; just 21 percent approved.
There is nothing to stop the eurozone's fourth largest economy snatching a rescue line: it has the perfect window this Friday and Saturday at a Cyprus meeting of eurozone finance ministers.
The European Central Bank has already laid out the path, saying it may buy government bonds for a stricken member state; all that is needed is a request, and an agreement to submit to strict conditions.
But Rajoy does not seem to be in a rush.
"We still have not taken any decision," Rajoy said Monday in his first television interview since taking power in December.
That's only logical, El Mundo journalist Carlos Segovia wrote in his blog: "No political leader wants to send a letter to the ECB throwing in the towel in his first year in power."
The main fear is being obliged to impose yet more austerity.
Rajoy has cut public workers' Christmas bonuses, equal to nearly a month's salary, raised taxes and VAT, and tightened the conditions to qualify for jobless benefits.
But he has a red line.
"If there is one area I won't touch it is pensions," Rajoy said, describing pensioners as the "defenceless" and vowing to maintain their payments in the budget for 2013.
"I could not accept that they tell us which are the concrete policies in which we have to cut or not cut," the 57-year-old leader said.
Rajoy had made protecting pensions a key plank of his political campaign, noted Luis Puch, economy professor at Madrid's Complutense University.
"The political cost is high because there are a lot votes in play," Puch added.
"The government is trying to gain a bit of time to improve the conditions" of any bailout, he said.
Spain wants any bailout conditions to apply only to deficit-reduction targets and refuses to compare its situation to that of Greece, Ireland or Portugal, the first eurozone nations to be rescued.
"That was for smaller countries," Puch stressed.
"I think that is where they will be able to negotiate: the shock that it would cause in Europe if Spain's problems got worse," he said.
That risk could be enough to convince Europe to show flexibility.
"Rajoy's calculation is not to ask for a rescue for now," said Javier Diaz Gimenez, professor at Madrid's IESE Business School and, in its position, "blocking the situation is relatively easy".
"There is no economic reason, the reasons are political," he added.
On the horizon, snap elections have been called in Rajoy's home region of Galicia and in the Basque Country for October 21.
If the Popular Party has little chance of victory in the Basque Country, where the nationalists are favourites, in Galicia it will fight all out to keep an absolute majority.
In March, Rajoy waited until after regional elections in southern Andalusia and northern Asturias before presenting an austerity budget.
"Subordinating the action of the state to electoral calcuations is one of the worst ways to conduct politics," leading Spanish daily El Pais said in an editorial.
"That's what the prime minister has done since his swearing-in," said the centre-left paper.
"Trying to win time is very risky at the moment because the market pressure is very strong," Puch said, especially since the country has about 30 billion euros in debt repayments due in October.
Rajoy seems to be relying on the recent relaxation in Spanish borrowing costs provoked by the ECB's offer to buy fragile eurozone states' government bonds.
"Financing is easier," Rajoy said.
But that may not last long.
"We are convinced that Spain will be forced to ask for aid in the end, so if the request is delayed further the markets will weaken again," warned a report by brokerage Link Securities.
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