Rajoy takes oath as Spain's prime minister

Prime Minister Mariano Rajoy took his oath Monday as leader of Spain's new conservative government — an administration that is in a minority in parliament and could have difficulty passing laws.

Rajoy's Popular Party is returning to power after two inconclusive elections left the country in a political limbo for 10 months. The deadlock ended when Rajoy won a confidence vote in Parliament at the weekend.

King Felipe VI presided at Rajoy's swearing-in ceremony at the royal palace. Rajoy is expected to name his Cabinet on Thursday.

The minority government's first challenge will be to pass a 2017 budget which must find some 5.5 billion euros ($6 billion) in cuts or tax hikes to meet a deficit target agreed with European Union authorities.

"The new government ... will be weak," Italian bank UniCredit said in an analysis, as tough negotiations with opposition parties lie ahead. "Therefore, it is hard to expect the adoption of major reforms like, for instance, a further consolidation of the banking system or a further overhaul of the labor law."