[1][2] The election campaign was dominated by the effects of an ongoing financial crisis, high unemployment, a large public deficit and a soaring risk premium.

Massive anti-austerity protests had taken place in May 2011 under the form of the 15-M Movement, and in the local and regional elections held a few days later popular support for the PSOE fell dramatically.

[5] Also for the first time in a general election, the PSOE failed to come out on top in both Andalusia and Catalonia, with the nationalist Convergence and Union (CiU) emerging victorious in the later, whereas the abertzale left Amaiur achieved a major breakthrough in both the Basque Country and Navarre.

[6] United Left (IU) experienced a turnaround of its electoral fortunes and saw its first remarkable increase in 15 years,[7] whereas centrist Union, Progress and Democracy (UPyD) exceeded all expectations with over one million votes, 5 seats and just 0.3% short of the 5% threshold required for being recognized a party parliamentary group in Congress.

[14][15] For the Congress of Deputies, 348 seats were elected using the D'Hondt method and a closed list proportional representation, with an electoral threshold of three percent of valid votes—which included blank ballots—being applied in each constituency.

The prime minister had the prerogative to propose the monarch to dissolve both chambers at any given time—either jointly or separately—and call a snap election, provided that no motion of no confidence was in process, no state of emergency was in force and that dissolution did not occur before one year had elapsed since the previous one.

The Cortes Generales were officially dissolved on 27 September 2011 after the publication of the dissolution decree in the BOE, setting the election date for 20 November and scheduling for both chambers to reconvene on 13 December.

[19] The 2008 general election had resulted in a victory for the Spanish Socialist Workers' Party (PSOE) of José Luis Rodríguez Zapatero, which nonetheless fell 7 seats short of an absolute majority.

The Socialists had been re-elected on a full employment platform,[26] despite the Spanish economy showing signs of fatigue and economic slowdown after a decade of growth.

[32][33] On 23 June 2008, Zapatero's cabinet adopted an "austerity plan" intended to save €250 million—consisting of a 70% reduction in the public job offer and a salary freeze for senior public servants—as well as financial stimulus measures—injection of €35 billion to SMEs and €2.5 billion annually until 2010 to improve the efficiency in the hotel sector—in order to soften the impact of job losses and rising oil prices,[34][35] with Zapatero finally acknowledging the crisis during an interview on 8 July.

[36] Meanwhile, the Martinsa-Fadesa bankruptcy filling in July 2008 as a result of the Spanish property bubble bursting turned into Spain's biggest ever corporate default.

[48] In April 2009, Pedro Solbes was replaced as Spain's Economy and Finance minister by the low-profile Elena Salgado as part of a major cabinet reshuffle, in a move seen as Zapatero seeking to take more direct control of economic policy himself.

[60][61][62] Zapatero's U-turn, breaching a previous pledge not to cut social spending, caused his and the PSOE's popularity ratings to plummet in opinion polls.

[63] On 9 September 2010, the PSOE government approved a labor reform, which included suspension of collective agreements during economic downturns, a lower redundancy pay in cases of wrongful dismissal—from 45 to 33 days per year worked—or cheaper dismissals for companies facing losses, among others.

[68][69] Zapatero's government announced a new austerity package on 1 December—including the removal of a €426 allowance for long-term unemployed and the privatizations of AENA and the Lotteries—but also a tax cut for SMEs.

Other general causes of ineligibility were imposed on members of the Spanish royal family; the president and members of the Constitutional Court, the General Council of the Judiciary, the Supreme Court, the Council of State, the Court of Auditors and the Economic and Social Council; the Ombudsman; the State's Attorney General; high-ranking members—undersecretaries, secretaries-general, directors-general and chiefs of staff—of Spanish government departments, the Prime Minister's Office, government delegations, the Social Security and other government agencies; heads of diplomatic missions in foreign states or international organizations; judges and public prosecutors in active service; Armed Forces and police corps personnel in active service; members of electoral commissions; the chair of RTVE; the director of the Electoral Register Office; the governor and deputy governor of the Bank of Spain; the chairs of the Official Credit Institute and other official credit institutions; and members of the Nuclear Safety Council; as well as a number of territorial-level officers in the aforementioned government bodies and institutions being barred from running, during their tenure of office, in constituencies within the whole or part of their respective area of jurisdiction.

[76][77] Disqualification provisions for the Cortes Generales extended to any employee of a foreign state and to members of regional governments, as well as the impossibility of running simultaneously as candidate for both the Congress and Senate.

Concurrently, parties, federations or coalitions that had not obtained a mandate in either chamber of the Cortes at the preceding election were required to secure the signature of at least 0.1 percent of electors in the aforementioned constituencies.

Minoritary national parties, such as United Left (IU) and Union, Progress and Democracy (UPyD), benefitted greatly from the PSOE collapse, winning 11 and 5 seats respectively—2 and 1 in the previous parliament.