Spain’s political gridlock deepens as Sanchez still struggles to form government

Madrid — Spain’s Socialists won the greatest number of seats in Sunday’s election, but the results are so fragmented that party leader Pedro Sanchez is going to struggle even more than before to form a government.

The political deadlock gripping the country has deepened.

The Socialists fared worse than in April’s inconclusive poll. The ballot was meant to strengthen Sanchez’s standing. Instead, the main opposition People’s Party jumped in support and the Spanish nationalists of Vox more than doubled their representation in parliament.

Sanchez, the acting premier, remains in pole position to claim a second term, yet it is far from clear how he will get there. His most obvious partner, the anti-austerity party Podemos, has seen its own support shrink and relations with Sanchez have soured. So that coalition looks easier on paper than in practice.

The scattered results confirm that weak, minority governments have become the new normal in Spain. Many voters say their lawmakers are clinging to the political order of old when Spain was for decades dominated by the centre-left Socialists and the centre-right People’s Party.

Even if Sanchez can win the backing of all his natural allies, he will still fall short of a majority in the 350-strong chamber. To get over the line, he would need a Catalan separatist party, Esquerra Republicana, to support him or at least to abstain in a parliamentary confidence vote. With their leader in jail for organising an illegal independence referendum in 2017, the separatists will not be willing supporters.

One other possibility would be for the People’s Party to abstain in a confidence vote, letting Sanchez take office in the national interest, a tall order for the conservatives.

“The feeling is that we’re stuck in the same place without having made any progress,” Enrique Sanchez, 85, a retired lawyer and Socialist Party supporter, said while he waited for Sanchez to address the crowd outside party headquarters in Madrid. “I don’t think Sanchez can be happy. The far-right has taken a big stride forward and the Socialists have stood still.”

“One way or another, this time we are going to have a progressive government,” Sanchez told a group of supporters in Madrid on Sunday evening.

He is, however, testing the patience of voters, dragged back to the polls for the fourth time in as many years. The economy’s post-crisis surge has so far proved resilient despite more than four years without an effective government, but the expansion is slowing now and the list of challenges facing the next administration — whenever it finally takes power — is growing.

If Sanchez fails again, Spain would be heading to an unprecedented third ballot and he would be facing questions over why he is not offering more concessions to reach a coalition agreement. The collapse of potential centrist partner Ciudadanos narrows his options further.

Another way to break the gridlock would be for the centre-right People’s Party to stand aside and abstain in a parliamentary vote in the interests of getting a government into power.

The People’s Party would probably insist that far-left Podemos is not able to influence government policy.

Podemos leader Pablo Iglesias said on Sunday evening that his party is willing to support Sanchez. But the far-left Iglesias said Sanchez’s decision to call new elections was misguided and allowed the surge of Spanish nationalists of Vox. They were the primary beneficiaries of a public backlash to violent protests in Catalonia and Sanchez’s decision to exhume Spain’s long-time dictator Francisco Franco from a mausoleum outside Madrid.

While the immediate and direct cost of such political paralysis on the economy has been manageable, there have been signs that Spanish businesses have put investment plans on hold. For now, the country’s economy has continued to grow more robustly than its euro-area peers such as Germany and Italy.

The long-term economic consequences, though, of Spain’s political stalemate are becoming evident. Lawmakers have not approved any major economic reforms since the aftermath of the country’s financial crisis more than half a decade ago.

The unemployment rate is still ticking downward and stands at 13.9%, but job creation has started to stall. Economists say the unemployment rate is unlikely to fall much more because it is bumping up against deep-seated structural impediments such as an overreliance on temporary contracts and the small size of Spanish companies, which limits hiring. Sanchez appears undeterred by the complicated political mathematics.

Bloomberg