In Spain, left-wing coalition seen more likely as king ends talks

[January 22, 2016]  By Julien Toyer
 
 MADRID (Reuters) - Spain will start to find out on Friday how quickly political parties can agree on a new government, with the prospect of a left-wing alliance now seen as gaining ground over a potential "grand coalition" one month after an inconclusive election.

King Felipe will meet the leaders of Podemos, the Socialists and the conservative People's Party (PP) - acting Prime Minister Mariano Rajoy - to conclude five days of talks with all forces represented in parliament.

He is expected to propose Rajoy, whose PP won most seats but failed to gain an outright majority in the Dec. 20 vote, as a candidate for prime minister shortly afterwards.

While Rajoy is set to lose the subsequent parliamentary vote on his appointment as most parties have already said they would reject him, the move would set the clock ticking and open a two-month maximum period for the formation of a government or the prospect of new elections in May.

It would also give Socialist leader Pedro Sanchez the next shot as candidate for the job.

Sanchez opposes the "grand coalition" of center-left and center-right parties proposed by Rajoy and wants instead to strike a deal with leftist newcomer Podemos and other smaller groups to obtain a majority of "progressive forces".

That will not be easy as Podemos, which relies on strong regional affiliates, especially in Catalonia, has pledged to organize a referendum on the independence of the wealthy northeastern region, which the Socialist's reject.

The two parties however softened their respective stance on the issue earlier this week and insisted they wanted to focus on economic and social issues rather than on the Catalan question.

"We will back any candidate who is able to generate a majority for change in this country," said Joan Baldovi, from Compromis, a Podemos' affiliate in the Valencia region, after meeting the king on Thursday.

"People have voted in a clear way and what they want is that we reach an agreement," he said.

The fragmented election has thrust Spain into a situation unprecedented in the four decades since the return of democracy.

The PP and the Socialists, which have alternated in power over the last 40 years, came first and second but with greatly reduced support.

Meanwhile, two new parties, the anti-austerity Podemos and the centrist Ciudadanos, attracted a new generation of voters disillusioned with the old elite.

If Sanchez fails to be voted in as prime minister, it is not clear yet whether Rajoy would try again or the parties would directly seek a new election within the following two months.

Ciudadanos leader Albert Rivera said on Thursday his party was ready to abstain in favor of Rajoy or Sanchez to avoid a new election and provide institutional stability at a time when the Spanish economy - the European Union's fifth-largest - is recovering from its worst crisis in decades.

A majority of Spanish voters oppose holding another election to resolve the political stalemate and want parties to agree on a coalition government, a survey showed on Sunday.

(Additional reporting by Blanca Gonzalez; Editing by Angus MacSwan)

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