New Spanish PM installed as tarnished Rajoy departs

MADRID (Reuters) — Spanish socialist Pedro Sanchez was catapulted to power on Friday, taking over as prime minister from veteran conservative Mariano Rajoy, who lost a no-confidence vote in the wake of a corruption scandal.

Lawmakers stood and cheered in parliament as the untested 46-yearold – a pro-European lawmaker who has never been in government – became the country’s seventh head of government since its return to democracy in the late 1970s.

Rajoy’s departure after six years in office may lead to a spell of political uncertainty in the euro zone’s fourth-largest economy, just as Italy, the third-largest, pulls back from early elections.

“I am aware of the responsibility I am assuming, of the complex political moment our country is going through, and I will rise to all the challenges with humility and dedication,” Sanchez told reporters.

Sanchez, who became prime minister with only 84 seats for his Socialists in the 350-member assembly, thanks to support from the hard-left Podemos and smaller nationalist parties, said he intends to steer the country through to mid-2020 when the parliamentary term ends.

But his majority – the smallest for a Spanish government since the return to democracy following Francisco Franco’s death in 1975, makes it unclear how long his administration can last.

His strong pro-European credentials, and the fact that Rajoy also ran a minority government, suggest fallout from any political ructions 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, soothed by Sanchez’s commitment to respecting a fiscally conservative budget passed by Rajoy.

Meanwhile, anti-establishment 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.

In Berlin, a government spokesman said Germany hoped for a stable government in Madrid.