Spanish Socialists urged to make changes after election win.

MADRID, SPAIN (MARCH 10, 2008)(REUTERS) -

Spaniards reacted on Monday (March 10) to Spain's governing Socialist Party winning Sunday's (March 09) election.

The Socialists won but fell short of the absolute majority that might have helped them act more quickly to cushion an economic slowdown.

On the streets of Madrid there were calls for change from the party.

Newspaper stand owner Luis Garcia said the country was suffering a series of problems with prices and something needed to be done.

There were also calls for rival parties to "get along better and not confront the Spanish people".

The Socialists won 169 seats in the 350-seat lower house, up five from the previous legislature.

Political analyst Fermin Bouza said the result would probably force important political changes, mostly on the right. Everyone was waiting to see what alliances the Socialist Party would make. "It will be a very passionate period" he said.

The conservative Popular Party (PP) won 153 seats, also up five from 2004, when voters turned against them after they rushed to blame the Basque separatists of ETA for election-eve train bombings that turned out to be the work of Islamists.

The night's big losers were small left-wing parties.

The economic slowdown and a sharp rise in unemployment dominated the election campaign until Friday (March 07), when a former Socialist councillor was shot at point-blank range in the Basque Country. Both main parties blamed ETA.

Bilbao resident Armand Laurence believes the killing did affect the result of the election. But he says people were also tired of the antagonism between the two leaders of the main parties.

Zapatero has won popularity with liberals around Europe over the last four years by pushing through social policies such as legalising gay marriage. But his next term will be pitted with more serious problems as Spain's economic boom comes to a sudden end.

In the last nine months, 300,000 people have joined the jobless queues, most of them from the construction sector.

Several analysts have cut their 2008 growth forecasts to about 2 percent after 3.8 percent growth last year and some worry that things could get worse if property companies start defaulting on their huge piles of debt.

How quickly and firmly Zapatero can deal with the slowdown will depend on what alliances he strikes with smaller parties, which often demand regional policies that rile the rest of Spain in exchange for their support.