No early elections in Spain, aide to new PM says

Spain’s new Prime Minister Pedro Sanchez has no plan to call snap elections, a top aide said on Monday, as his minority government prepares to tackle potentially fraught budget talks and a revived independence campaign in Catalonia.

Sanchez, whose Socialist party holds just 84 of 350 parliamentary seats, was propelled into office on Friday after an unlikely alliance of anti-austerity and nationalist parties backed his bid to oust Mariano Rajoy’s conservatives over a corruption scandal.

“It’s clearly unusual to govern with 84 lawmakers but the political situation remains very fragmented and everything suggests a new election wouldn’t fix that,” Jose Luis Abalos, often described as Sanchez’s right-hand man, told COPE radio.

Sanchez said prior to Friday’s no-confidence vote that he would try to steer his government, whose ministers he is due to name by the middle of this week, through the parliamentary term that ends in mid-2020.

But the lack of anything approaching a majority as well as a series of tricky political hurdles – including the Catalan crisis, a still to-be-approved 2018 budget and expectations of concerted opposition from Rajoy’s People’s Party (PP) and the centre-right Ciudadanos – make it unclear how long his administration can last.

“The new government is going to be very weak,” analysts from French investment bank Natixis said. “(Its) life expectancy … might be very short.”

Sanchez can at least count on healthy growth momentum in the euro zone’s fourth-largest economy, emphasized on Monday with data showing registered unemployment fell in May to its lowest level since the financial crisis erupted in 2008.

Financial markets also welcomed the relatively smooth handover of power in Madrid, with Spanish stocks posting gains and the yield spread on the country’s bonds over benchmark German debt falling.

ROOM FOR MANEUVER?

Catalan nationalist parties supported Sanchez in Friday’s vote, but Abalos told COPE there had been no quid-pro-quo negotiations between the camps, or discussions over the fate of politicians jailed for their roles in the north eastern region’s secessionist campaign.

Nationalists regained control of the Catalan government on Saturday, and said they wanted talks with Sanchez and would pursue their bid for independence.

Sanchez has also said he wants to talk, though he and his party are opposed to any independence referendum or secession.

The new premier also faces a potential early challenge from the PP, after lawmakers in the party said they did not rule out tabling amendments to the 2018 budget in the upper parliamentary house, where they have a majority.

While Abalos shrugged off that possibility, any attempt to block the budget – drafted by the PP while in government and voted through the lower house last month after delays – risks creating legislative delays that Sanchez can ill afford.

Over the next few days, he is expected to unveil a cabinet that may include independent ministers.

But Sanchez’s spokeswoman said on Sunday it would not include members of the anti-austerity Podemos party which, with 67 lawmakers, was a key ally in helping him topple Rajoy.

That decision seems unlikely to make it any easier for Sanchez to push bills through a fragmented parliament.

However, fast-track decrees and control of the budget, once passed, should allow it to make some legislation, including on pensions, said Pablo Simon, a political science professor at Madrid’s Carlos III university.

“He has some room for maneuver,” Simon said, adding that he expect Sanchez’s government to survive at least until after municipal, regional and European ballots due next May.

Reuters

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