Spanish PM to form new government after elections

Spain’s ruling conservative party was fighting to cling to power last night after exit polls from yesterday’s (Sunday’s) general elections gave the Popular Party (PP) of Prime Minister Mariano Rajoy just over a quarter of the vote. The Partido Popular remains first with nearly 29% of the vote, the PSOE a strong second with 22%, followed closely by the extraordinary showing by Podemos, which received more than 20%.

“Today a new Spain has been born”, said Pablo Iglesias, the leader of Podemos in his post-election speech. He’s right: the two-party system which has governed Spain since its emergence from dictatorship in 1975 has just ended.

Socialist party leader Pedro Sanchez said the results of the election prove voters want a change in political direction.

Victor Sampedro, a professor of Public Opinion and Communication Policy at King Juan Carlos University in Madrid, agrees that the leftist parties could try to form a government with the support of nationalist forces, but “it will be difficult”. While the Popular Party (PP), the incumbent regime, finished with only 28.7 percent – far from the majority needed for single party rule.

Podemos’s rise was also hailed by Greek Prime Minister Alexis Tspiras, whose Syriza party is its ally. The Socialists won 90 seats, compared with 110 four years ago, when they were ousted from office after an economic crisis hit Spain.

The Socialists and Podemos on Monday ruled out voting in favour of Rajoy. In this scheme, a Portuguese scenario is possible, in which the second and third party form a government.

The Euro gapped down against the US Dollar at the open of the trading week after preliminary results from Spain’s general election crossed the wires.

Rajoy’s People’s Party lost a third of its lawmakers even as it beat out the Socialists to take the most votes and earn the first shot at forging a government.

Spain joined a global backlash against establishment politics as voters opted to challenge a two-party system that has seen the PP and the Socialists alternate in power for the past 33 years.

Spanish voters dealt a blow to the country’s political establishment and fell short of giving outgoing prime minister Mariano Rajoy directions on what colour of coalition government he should pursue as leader of the largest party. “The key question is whether there will be a coalition of parties against Rajoy”. In October 2015, the unemployment rate came in at 21.6 percent compared to 23.9 percent a year earlier, the second-highest rate in the European Union after Greece, although it has fallen from its 2013 peak of 27%.

“This result will… likely usher in weeks of political uncertainty, as the various parties try to hammer out a working arrangement in a country that has a limited history of multi-party government”, said Eurasia Group analyst Federico Santi. Since the current Spanish constitution was passed in 1979, the king has always nominated the candidate from the party with the most votes, who was then appointed PM by parliamentary vote.

On a first vote the candidate must get more than half of the 350 lawmakers in parliament in order to form a government.