Spain’s political limbo likely to last at least another month

Although the conservative People’s Party (PP) won the most seats - 123 in the 350 seat parliament - it lost its majority and remains without allies, largely because of its perceived failure to deal with a slew of corruption allegations against party members.

The socialist party, which has 90 seats, said this week they would continue pushing for a “majority for change” in the run-up to a 2 May deadline to form a coalition. Under Spain’s constitution, if no candidate can win a parliamentary vote to be prime minister, King Felipe VI must dissolve parliament for a fresh election at the end of June.

Most analysts are sceptical that a breakthrough could be reached in the near future, particularly since Sanchez and Iglesias had promised to meet before Easter but held a 30-minute phone call instead.

Catalonia disagreement

“The leaders haven’t stopped travelling around Spain holding events with their members and supporters, one more sign that they are in a pre-election campaign,” said an editorial in newspaper El Pais on Monday entitled 100 Lost Days.

The king nominated Sanchez to try to form a government after acting prime minister Mariano Rajoy declined his invitation.

The socialists managed to strike a 200-point pact with liberal newcomers Ciudadanos (Citizens), who have 40 seats. But the PP and Podemos voted against the programme at two investiture votes earlier this month.

Podemos continues to insist that the Socialists scrap their deal with pro-business Ciudadanos in favour of a left-wing coalition in which Iglesias would be deputy prime minister.

But Sanchez wants to make the Ciudadanos pact the basis for negotiations, saying Podemos can sign up to many of the measures such as those designed to help poor families, to increase the power of collective bargaining for workers and to tackle corruption.

Although Podemos-backed groups could potentially give Sanchez 69 seats, compared to Ciudadanos’ 40, the socialists are wary of governing with Podemos, which aspires to replace it as the largest party on the left, and because it would still need to lean on regional parties to defeat votes by the PP and Ciudadanos.

The socialists want Podemos to drop a pledge to grant Catalonia a Scottish-style referendum on whether the north-eastern region should break away from the rest of Spain, arguing under the constitution all Spaniards should have a say on sovereignty.

Looming deadline

Spain’s protracted political crisis is frustrating voters who want to see measures to tackle corruption and help families affected by the 20 percent unemployment rate.

Rajoy’s caretaker government cannot pass legislation but continues to perform other functions, including representing Spain at the recent EU summit on refugees.

However, the PP has been criticised by other parties for failing to send ministers to parliament to explain its decisions.

The government had argued that its ministers were chosen by the former parliament, so could not be held accountable by current MPs.

Rajoy has since agreed to appear before parliament to brief MPs on the last two EU summits.

Though the IMF forecast Spain's economy would grow by about 2.7 percent this year, businesses are delaying investment decisions until they gain clarity on the new government and its policy.

The PP passed the budget last year for 2016, which buys Spain some time, but the European Commission warned earlier this month it had until next month to draw up additional measures to meet its budget deficit target of 2.8 percent of GDP this year.

Some analysts think parties could become more flexible in deal-making in the run-up to the 2 May deadline, particularly if they fear losing seats at a new election.

So far, opinion polls suggest voters would deliver a similarly fragmented parliament. However, some show Ciudadanos increasing, suggesting voters are rewarding it for making a deal with the socialists.

In the weeks ahead, the parties could see the risks of another election and decide to vote for Sanchez or to abstain at his investiture.

While Rajoy has the headache of judicial investigations against party members close to him, Podemos is in the midst of a crisis after Iglesias sacked one of the most senior members of its management team over his handling of regional disputes.

“As we get closer to 2 May … the probabilities of a deal increase,” said Pablo Simon, a lecturer in political sciences and member of the political analysis group Politikon.

He believes there is currently a 50 percent chance of Spain securing a government without a fresh election and that will rise to 60 or 70 percent over the next month.

"It is the left who will decide whether there are new elections or not," he said.

"So the left has one thing that the right does not. It has the fear of losing the blame-game of who is held responsible for us having to vote in new elections."