Spaniards were proud of having avoided an Italian-style government of unelected technocrats after they gave conservative Rajoy the go-ahead to introduce reform and impose further austerity.
But commentators warned that, similar to the technocrats running Italy and Greece, he had only limited options. "None of his predecessors have accumulated as much power as he will have," said Jesús Ceberio, a former El País editor. "But, paradoxically, none had such little room for manoeuvre."
Rajoy is hampered by the country's system for handing over power, which takes a month, and the impatience of markets that sent the cost of Spanish debt higher on Monday morning. He must also obey the dictates of an EU, dominated by German chancellor Angela Merkel, which has imposed severe austerity programmes on member countries with debt problems. "A large part of his most immediate programme is already set out in the fiscal consolidation plan demanded by Europe," Ceberio said.
Rajoy will, for example, be unable to choose Spain's deficit levels over the next three years, as strict targets have already been set by the EU.
The PP leader has warned that he does not carry a magic wand and will not be able to perform instant miracles, even though yields on Spanishbonds are floating dangerously towards the 7% level that economists consider unsustainable.
Rajoy's main message to investors is that Spain will be "compliant", meaning it will meet the deficit target of 4.4% set by the EU for next year. In a country where growth is zero and austerity already threatens a double-dip recession, that is likely to require further massive spending cuts or tax hikes, or a mixture of both.
On Sunday night he pledged to make Spain respected in, among other places, Frankfurt. That was recognition that the country now depends heavily on the Frankfurt-based European Central Bank, which has been buying Spanish bonds to keep yields down.
Rajoy is, however, in tune with Merkel, with whom he spoke by phone on Monday. Merkel's spokesman, Steffen Seibert, said they discussed "Spain's great problems".
Reforms that bring no cost to Spain's cash-strapped treasury, such as to the labour market, may come first.
Jaime García, an economist at a PP thinktank, said he expected Rajoy to announce "shock measures" soon.
PP leaders have urged the outgoing socialist government of prime minister José Luis Rodríguez Zapatero to speed up the transfer of powers, even though the law requires parliament to meet on 13 December before Rajoy can take over.
"There are extraordinary problems which demand that a holiday period between governments should not exist," said PP spokeswoman Soraya Sáenz de Santamaría. Economist Nicholas Spiro, of Spiro Sovereign Strategy, said: "The fact that investors have to wait another month for Mr Rajoy's cabinet to take the reins only adds to the uncertainty."
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