Spain’s ruling Popular Party secured the most seats in parliament, but lost its parliamentary majority, leaving Prime Minister Mariano Rajoy struggling to avoid becoming the third European leader to be ousted this year after pushing through unpopular austerity policies.
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That could result, for example, in a leftist coalition including pro-independence regional parties from Catalonia who have been promised a referendum on independence by Podemos leader Pablo Iglesias.
Spain’s political scene is traditionally dominated by the Conservatives and the Socialists – they have alternated power for more than 30 years. Led by Mariano Rajoy, the current prime minister, Sunday’s election results left the party with limited possibilities when it comes to the alliances they now need to form a stable government majority.
The PSOE followed with 90 seats and 22 percent of the vote, then Podemos with 69 seats and 20.6 percent, and finally centrists Ciudadanos got 40 seats or almost 14 percent.
An unexpected surge from upstart anti-austerity party Podemos, which now partly holds the key to power, is the latest example of rising populist forces in Europe at the expense of mainstream centre-right and centre-left parties.
Speaking to supporters in Madrid just after midnight, Rajoy said: “Whoever wins the elections has the obligation to try to form a government, and I will try to do so because Spain needs a stable government”.
Craig Erlam, senior market analyst at OANDA in London, said Spain may now face an era of “political paralysis and instability”.
A minority PP government would be technically possible but unlikely due to the strong left-wing vote, as would be a grand coalition between the PP and the Socialists, which both parties vehemently ruled out during campaigning.
The results mean the parliament will be constituted of four main groupings of significant clout, as opposed to the usual PP and Socialists tandem – putting an end to the country’s traditional bi-party system.
“But otherwise, I don’t yet see so clearly who one can congratulate in this situation”, Wirtz said, adding that no one from Germany’s government had contacted Spanish officials about the formation of a new government.
In order to be able to govern for the next four years, the PP will have to rely on other parties, suggesting a protracted process of negotiations lies ahead for Spain’s political leaders.
Protracted negotiations are expected in the coming months as a PP-Ciudadanos coalition falls short of the majority needed to rule.
Ciudadanos wants electoral reform and PSOE and Podemos want to repeal the Rajoy government’s labour reform, which made it easier to sack workers on permanent contracts. However Spain’s unemployment, hovering at 21.1%, is the second highest in the European Union after Greece. Even if a government is formed, it is likely to be weak.
In line with the Spanish constitution, after talking to each party, King Felipe VI will nominate a candidate for prime minister.
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If there is still deadlock after two months, the monarch calls a new election – probably in April or May.
