Rajoy tries to form minority government in Spain despite 53 seat deficit

Jose Manuel Villegas, deputy leader of the liberal Ciudadanos party, said the fragmented election results have demonstrated that Spain’s traditional two-party system has come to an end. An absolute majority is out of the question since it would require the PP to form a grand coalition with PSOE, but PSOE already announced they would “vote No to Rajoy’s presidency and No to the PP”.

Podemos, the only national party to back a Catalan referendum on independence from Spain although it has said it would recommend voting against secession, won 12 parliamentary seats in the wealthy region of 7 million.

Negotiations will be needed to determine who will govern Spain, with the new far-left Podemos and business-friendly Ciudadanos parties making inroads because of strong support from voters tired of high unemployment, a string of official corruption cases and disgust over the country’s political status quo.

Spain’s benchmark Ibex 35 index was down 2% in trading on Monday, suggesting investor jitters following the result.

The results of the general elections on Sunday left the parliament divided, with two new parties-Podemos on the left and Ciudadanos on the right- gaining 69 and 40 seats, respectively.

So this political shakeup is obviously big news for Spain-but it could signal bigger changes in Europe, too.

After holding talks with the leaders of each party that has won seats in parliament, King Felipe VI, the head of state, will nominate a prime minister – most likely Rajoy.

Mr Rajoy had hoped to form an alliance with the Citizens Party but their combined total of 163 seats still leaves them well short of a majority.

Undeterred, incumbent prime minister and PP leader Mariano Rajoy said late Sunday in Madrid he would strive to form a government, standing on top of a tall, blue podium marked “Gracias” (“Thank you”) and speaking down to cheering supporters.

Francisco Herrera, a 43-year-old porter in Madrid, said he was disappointed with Rajoy’s leadership but would vote for his Popular Party because it “defends the economy and the type of government that suits us right now”. They blame the Socialists for plunging Spain into an extended economic crisis that began in 2008, and the Popular Party for an economic recovery accompanied by an unemployment rate of 21 per cent and more than double that for workers under age 25. It is virtually impossible for him to stay in power without the support of the Socialists, or at least their abstention, in a parliamentary vote on a new government.

After decades of clear power relations, Spain to controls with the strengthening of protest parties on political instability. If the candidate is not immediately successful, Parliament has two months to elect a prime minister or call a new election.

Rivera also said a left-wing coalition that could consist of up to 11 parties would not be viable.

In a first confidence vote, the candidate must get more than 50 per cent of the full 350 votes in order to form a government.

Rajoy set a deadline of January 13 for a first round of talks between parties, coinciding with the day parliament is due to resume.