Spain’s Socialists rule out a grand coalition with Rajoy, others follow suit

Prime Minister Mariano Rajoy, leader of Spain’s Popular Party, could be the third European leader this year to be ousted from office after implementing harsh austerity measures. Ciudadanos, which has repeatedly said it will never vote for Rajoy, said that at most it would abstain so the Popular Party could try to form a minority government – given that it was the most voted.

Due to Spain’s political uncertainty, the country’s stock market dipped 3.6 percent today.

Rajoy’s PP won the most votes in Sunday’s national election but fell well short of the 176 seats needed for a parliamentary majority, setting the scene for weeks of complex negotiations on building pacts to govern. Nevertheless, PSOE leader Pedro Sánchez has stated that his party will vote against the nomination of current Spanish Prime Minister Mariano Rajoy to lead the next government of Spain. In this election, two new parties, the centrist Ciudadanos (Citizens) Party and the socialist Podemos (We Can) Party gained several seats in Parliament and upended the country’s political system.

“The two ancient parties – the old left and the old right – won’t have power anymore”, Villegas said.

Despite garnering the most votes, the center-right People’s Party (PP) had its worst result ever in a general election as Spaniards angered by high-level corruption cases and soaring unemployment turned away from the party in droves.

In an early bid to soothe concerns, Rajoy had said he would do all he could to form a government, standing on a podium in Madrid marked “Gracias” (“Thank you”) and speaking down to cheering supporters.

The outcome of the most closely fought election in Spain’s modern history has plunged the country into turmoil just as it was starting to recover from a devastating financial crisis.

Ciudadanos leader Albert Rivera at a campaign rally in the party’s heartland of Catalonia. King Felipe VI will now talk to all parties before nominating a candidate for PM, who must then win a vote of approval in the hung parliament.

The two left-wing parties won 159 seats between them in the 350-seat parliament, and with Catalan nationalists likely to join them in opposing the PP, it appears to make it virtually impossible for the PP to construct a majority.

While the PSOE has rejected Rajoy, it could agree not to vote against a conservative government that excludes the incumbent premier, said Fernando Vallespin, politics professor at Madrid’s Autonomous University. Podemos, which advocates territorial unity, is the only party to propose a Scotland-style referendum, in order, it says, to defuse tensions in the northeastern region.