PEDRO SANCHEZ IS NEW SPAIN PRIME MINISTER
AS HIS PREDECESSOR MARIANO RAJOY LOSES NOCONFIDENCE VOTE
MADRID : Socialist leader Pedro Sanchez took over as Spain’s prime minister on Friday, after parliament toppled his predecessor Mariano Rajoy in a no-confidence vote triggered by a corruption scandal involving members of his centre-right party.
Lawmakers stood and cheered as Sanchez - who had earlier promised to try to steer the country through to mid-2020 when the parliamentary term ends became the country’s seventh head of government since its return to democracy in the late 1970s.
But Rajoy’s departure after six years in office casts one of the euro zone’s top four economies into an uncertain political landscape, just as another - Italy pulled back from early elections.
Sanchez won Friday’s no-confidence motion by 180 votes to 169, with one abstention. The 46-yearold’s Socialist party holds just 84 seats in the 350-member assembly, making it unclear how long his administration can last.
But his strong pro-European credentials, and the fact that Rajoy also ran a minority government, suggest fallout from any political ructions in one of the euro zone’s fast-growing economies is likely to be limited.
Spain’s stock market rose after the parliamentary vote, to trade nearly 2 percent higher on Thursday’s close, while the country’s borrowing costs fell.
“Sanchez has reiterated a commitment with European orthodoxy and budget control in Spain,” UBS analysts said. “We do not anticipate a substantial impact on the pace of growth.”
Michael Metcalfe, head of global macro strategy, State Street Global Markets, added: “We’ve had a rude awakening of European political risks this week... but the situation in Spain is very different from Italy.” Antiestablishment parties in Rome revived coalition plans on Thursday, ending three months of turmoil by announcing a government that, by contrast, says it will increase spending and challenge European Union fiscal rules.
CATALONIA MOVES TO END MADRID RULE
Catalan authorities announced their new cabinet on Friday, paving the way for Madrid to end direct rule over the region by excluding four nominees under investigation for their role in its independence drive.
The news coincided with the departure of Mariano Rajoy as Spain’s prime minister, voted out of office by parliament on Friday and replaced by Socialist leader Pedro Sanchez.
Sanchez said on Thursday that, if his party’s motion of no-confidence against Rajoy succeeded, he would resume dialogue with the government of Catalonia.
Rajoy imposed direct rule on the region in October after sacking its government following an independence referendum that Spanish courts declared illegal.
His failure to resolve the political crisis caused by the standoff contributed to dissatisfaction with him, though the no-confidence vote - backed by Catalan pro-independence parties - was triggered primarily by a longrunning corruption trial involving members of his centre-right party. Under the terms of its rule, Madrid is obliged to devolve power back to the Catalan government.