Ten weeks after a general election produced an unprecedented deadlock in parliament, efforts to form a government in Spain are entering a critical phase. Socialist leader Pedro Sanchez will start the countdown to a fresh ballot when he asks lawmakers to let him lead the next government in a vote on Wednesday. The legislature will then have another two months to find a prime minister before a new election is triggered. With just 90 lawmakers in the 350-seat chamber, and another 40 from his pro-market ally Ciudadanos, he’s almost certain to be rejected at the first attempt. Still, Sanchez is betting that his attempts to find a way out of the impasse will win him credit with voters and put pressure on Acting Prime Minister Mariano Rajoy’s People’s Party and anti-austerity group Podemos to drop their opposition. Sanchez aims to make the PP and Podemos look like obstacles to the Socialists’ efforts to take the country forward, according to Kiko Llaneras, a Madrid-based polling analyst at the research group Politikon. “Nobody wants to go to elections but if it has to happen everyone wants to go with the best possible political message,” said Llaneras. “The polls after the confidence votes will be a key test.”
Sixty-five percent of Spaniards would blame politicians for refusing to compromise if the country goes to fresh elections, according to a Metroscopia poll based on 2,400 interviews this month. The margin of error was 2 percentage points. Metroscopia plans to conduct a fresh study next week, as does GAD3 a rival pollster.
Spanish politicians are struggling to forge a governing majority after the country’s two-party system was swept away by the political fallout from the economic protest.
The country’s government bonds have underperformed Italy’s over the past year, even though Spain’s economy has been growing more than three times as fast. Spain’s 10-year debt yields 11 basis points more than Italy’s. In April last year it was yielding 8 basis points less.