Business Day

Poll outcome deepens Spain’s political gridlock

Prime minister’s centre-left socialists secure victory but now fall further short of a majority

- Jeannette Neumann

Spain’s Socialists won the greatest number of seats in Sunday’s election, but the results are so fragmented that party leader Pedro Sanchez is going to struggle even more than before to form a government.

The political deadlock gripping the country has deepened. The Socialists fared worse than in April’s inconclusi­ve poll. The ballot was meant to strengthen Sanchez’s standing. Instead, the main opposition People’s Party jumped in support and the Spanish nationalis­ts of Vox more than doubled their representa­tion in parliament.

Sanchez, the acting premier, remains in pole position to claim a second term, yet it is far from clear how he will get there. His most obvious partner, the anti-austerity party Podemos, has seen its own support shrink and relations with Sanchez have soured. So that coalition looks easier on paper than in practice.

The scattered results confirm that weak, minority government­s have become the new normal in Spain. Many voters say their legislator­s are clinging to the political order of old when Spain was for decades dominated by the centre-left Socialists and the centre-right People’s Party.

Even if Sanchez can win the backing of all his natural allies, he will still fall short of a majority in the 350-strong chamber. To get over the line, he would need a Catalan separatist party, Esquerra Republican­a, to support him, or at least to abstain, in a parliament­ary confidence vote.

With their leader in jail for organising an illegal independen­ce referendum in 2017, the separatist­s will not be willing supporters.

One other possibilit­y would be for the People’s Party to abstain in a confidence vote, letting Sanchez take office in the national interest, a tall order for the conservati­ves.

“The feeling is that we’re stuck in the same place without having made any progress,” Enrique Sanchez, 85, a retired lawyer and Socialist Party supporter, said while he waited for Sanchez to address the crowd outside party headquarte­rs in Madrid.

“I don’t think Sanchez can be happy. The far-right has taken a big stride forward and the Socialists have stood still.”

“One way or another, this time we are going to have a progressiv­e government,” Sanchez told supporters in Madrid on Sunday evening.

He is, however, testing the patience of voters, dragged back to the polls for the fourth time in as many years. The economy’s post-crisis surge has so far proved resilient despite more than four years without an effective government, but the expansion is slowing now and the list of challenges facing the next administra­tion is growing.

If Sanchez fails again, Spain would be heading to an unpreceden­ted third ballot and he would be facing questions over why he is not offering more concession­s to reach a coalition agreement. The collapse of potential centrist partner Ciudadanos narrows his options further.

Another way to break the gridlock would be for the centre-right People’s Party to stand aside and abstain in a parliament­ary vote in the interests of getting a government into power.

The People’s Party would probably insist that far-left Podemos is not able to influence government policy.

Podemos leader Pablo Iglesias said his party is willing to support Sanchez. But the farleft Iglesias said Sanchez’s decision to call new elections was misguided and allowed the surge of Spanish nationalis­ts of Vox. They were the primary beneficiar­ies of a public backlash to violent protests in Catalonia and Sanchez’s decision to exhume Spain’s long-time dictator Francisco Franco from a mausoleum outside Madrid.

While the immediate and direct cost of such political paralysis on the economy has been manageable, there have been signs that Spanish businesses have put some investment plans on hold.

For now, the country’s economy has continued to grow more robustly than its euroarea peers such as Germany and Italy. The long-term economic consequenc­es, though, of Spain’s political stalemate are becoming evident. Legislator­s have not approved any major economic reforms since the aftermath of the country’s financial crisis more than half a decade ago.

The unemployme­nt rate is still ticking downward and stands at 13.9%, but job creation has started to stall. Economists say the unemployme­nt rate is unlikely to fall much more because it is bumping up against deep-seated structural impediment­s such as an overrelian­ce on temporary contracts and the small size of Spanish companies, which limits hiring.

Sanchez appears undeterred by the complicate­d political mathematic­s.

 ?? /Reuters ?? Minority government: Acting prime minister and Socialist Party leader Pedro Sanchez is in pole position to claim a second term, but it is not clear if he can bring together a coalition government.
/Reuters Minority government: Acting prime minister and Socialist Party leader Pedro Sanchez is in pole position to claim a second term, but it is not clear if he can bring together a coalition government.

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