Spanish Prime Minister Pedro Sanchez has called a snap national election for April 28 after parliament voted down his budget bill, spelling an uncertain few months for a country whose political landscape is increasingly fragmented.
Spain exited a deep economic slump in 2013 but has been plagued since then by political volatility, driven by deep divisions over an independence drive in Catalonia and the emergence of new, populist parties.
Sanchez, who took office in June at the head of a minority government holding less than one-quarter of parliamentary seats, called the election after his former Catalan nationalist allies refused to back his budget.
“One cannot govern without a budget,” Sanchez said in a televised address that bore hallmarks of a campaign speech, laying out his government’s achievements and saying that he is seeking a broader majority to pursue a social reform agenda.
“Between doing nothing and continuing without the budget, and calling on Spaniards to have their say, I choose the second. Spain needs to keep advancing, progressing with tolerance.”
Sanchez’s Socialist party leads opinion polls, but they also show that no single party would win enough votes to govern on its own.
A range of possible coalition scenarios point to lengthy negotiations between three or more parties, potentially including the far-right Vox – in would be a first for post-Franco era Spain – and tapping into a divisive and high-profile debate over Catalan separatism.
Anti-immigration Vox, one of several emerging parties that have ripped apart the two-party establishment that has alternated power since Spain’s democracy was re-established after Francisco Franco’s death in 1975, saw its first electoral success in December.
Twelve of its lawmakers were elected to Andalusia’s regional parliament, where it is backing the ruling administration, and in April it seems certain to enter the national parliament and possibly the government.
With Catalan separatist leaders on trial in Madrid for a failed independence bid in 2017 that angered many voters in the rest of the country, that region’s uneasy relationship with central government will also be high on the electoral agenda.
A source with direct knowledge of the matter had said on Wednesday that the country’s highest court had no plans to suspend the trial if elections were called, even if it will now take place during campaigning.
Sanchez’s government – which had replaced another, conservative minority administration removed from office in a no-confidence vote – had also depended on the support of other small regional parties to pass legislation.
However, it was the Catalan nationalist parties that threw him against the ropes by rejecting the fiscal bill.
Pablo Casado, the leader of the conservative People Party (PP), has welcomed what he called the prime minister “throwing in the towel”, and said his party is ready to govern, adding that his first move, if elected, would be to reduce taxes.
Sanchez’s Socialists lead the polls with estimates from the last few months averaging at 24%, according to a poll of polls by daily El Pais.
But PP and another newcomer – centre-right Ciudadanos – would not be far behind and could theoretically form another coalition with Vox.
Ciudadanos might however baulk at teaming up with the far-right nationally, preferring instead a three-way alliance with the Socialists and Spain’s third prominent populist party, anti-austerity Podemos.
Markets in the eurozone’s fourth-largest economy were little changed after Sanchez’s announcement.
Bond analysts have said any political impact on sentiment should be short lived given the country’s decent macro-economic outlook.
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