Spanish Prime Minister insists Socialist Party must lead new government


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Spanish Socialist Party (PSOE) leader Pedro Sanchez attends a parliamentary nomination debate in Madrid, Spain, March 2, 2016.

Andrea Comas | Reuters

Spanish Prime Minister Pedro Sanchez told CNBC that a government led by his Socialist Workers’ Party remains the only option for a future political coalition in Madrid. This after more than eight weeks of negotiations since the last national vote has so far failed to produce a parliamentary majority.

“There is no other alternative, because I have double the seats of the second political force in parliament,” Sanchez said in Brussels on Friday.

“The rest of the political forces must assume their own responsibilities” in Madrid, he insisted, and these would include efforts to avoid a new general election and “to facilitate the governability of Spain”.

Spain’s April 28 election proved largely inconclusive as its socialist party, the PSOE, and its natural allies, the anti-austerity movement Podemos, failed to secure enough combined seats in the Congress of Deputies in Madrid to form a simple majority.

Since then, under the country’s constitution, Sanchez has accepted a commission from the Spanish monarch, King Felipe VI, to attempt to form a new government.

But it turned out to be far from straightforward for the leftist politician, whom supporters describe as a consensus builder and who was photographed late Thursday night in Brussels, in the middle of a conversation with European power actors. like German Chancellor Angela Merkel, French President Emmanuel Macron. and the President of the Council of the EU, Donald Tusk.

Sanchez dissolved Spain’s former parliament in mid-February after separatist Catalan lawmakers refused to vote in favor of the legislative framework of his government’s budget proposals.

These same Catalan parliamentarians belonging to independence parties in the rich region of northeastern Spain, in Catalonia, had already supported Sanchez in his efforts to overthrow his center-right predecessor Mariano Rajoy the previous summer.

Now they and other small regional parties are insisting on onerous and often contradictory conditions for their respective participation in any Socialist-led government, ahead of parliamentary votes to endorse Sanchez as prime minister which are tentatively expected to take place in mid -July.

“The threat of a new election might be enough for parties to allow his reappointment,” wrote Antonio Barroso, deputy director of research at political consultancy Teneo Intelligence in a recent research note to clients.

But an unstable coalition of supporters in Spain’s legislature could herald additional uncertainty for businesses and investors focused on the country’s growth potential.

“The fragmentation of parliament will continue to make it difficult for the government to pass laws,” Barroso said. “As a result, the room for maneuver for substantial changes in economic policy will likely remain quite limited even if Sanchez is re-elected.”

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