SANCHEZ IS SPAIN PM AS TARNISHED RAJOY VOTED OUT
Rajoy ousted in vote of no confidence triggered by a corruption scandal linked to his party
SOCIALIST leader Pedro Sanchez took over as Spain’s prime minister yesterday, 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 eurozone’s top four economies into an uncertain political landscape, just as another — Italy — pulled back from early elections.
Sanchez won yesterday’s noconfidence motion by 180 votes to 169, with one abstention.
The 46-year-old’s Socialist party holds just 84 seats in the 350member 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 two 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, said: “We’ve had a rude awakening of European political risks this week... but the situation in Spain is very different from Italy.”
With most other Spanish parties also pro-European in outlook, Sanchez has already committed to respecting a fiscally conservative budget passed by Rajoy.
The fragmented Parliament means he will also find it hard to row back on structural reforms passed by his predecessor, including new labour laws and cuts in healthcare and education.
Rajoy conceded defeat prior to the no-confidence vote, congratulating Sanchez and telling deputies in a short speech: “It has been an honour to have left Spain in a better state than I found it.”
The 63-year-old stalwart of the centre-right People’s Party took over the government in 2011 amid a deep recession and oversaw a dramatic economic recovery.
However, his position had become increasingly untenable, undermined by scandals encircling his party, as well as a divisive independence drive in the wealthy region of Catalonia, which led Madrid to impose direct rule on the region last autumn.
The no-confidence motion was brought by Sanchez after a judge sentenced dozens of people linked to the Rajoy’s party to decades in jail in a long-running corruption trial.
Two Catalan pro-independence parties backed the motion of no-confidence in Rajoy.
Sanchez, who is expected to be sworn in by Monday and appoint his cabinet next week, had promised to start talks with the Catalans, but said he would not give the region an independence referendum.