Spain’s Socialist Leader Quits as Party Shapes to Let Rajoy Win

(Bloomberg) -- Spain’s Socialist leader Pedro Sanchez resigned on Saturday, pushed out by rebels after more than 10 hours of tempestuous talks in Madrid, potentially signaling the beginning of the end for the country’s nine-month political impasse.

With his supporters gathered outside the party’s headquarters, Sanchez announced his resignation in a televised statement after his call for an emergency leadership election was rejected by group’s federal committee. He was defeated 133 votes to 107, a party spokesman said. Sanchez had been seeking the membership’s backing after the party was torn apart by fighting over whether to let its traditional rival, Mariano Rajoy’s People’s Party, take office.

“Today more than ever we have to be proud of working for the Socialist Party,” Sanchez said. “The caretaker administration that will emerge from the legitimate debate taking place in the federal committee will have my loyal support.”

Sanchez had wanted to maintain the party’s opposition to Rajoy after Socialist lawmakers voted against the caretaker prime minister’s candidacy in two confidence votes in August and September, but he came under increasing pressure from party heavyweights and business leaders to step aside. The party may now abstain in a subsequent vote.

Mass Resignation

Sanchez has been trying to rally support for an anti-Rajoy alliance since the acting prime minister lost his majority in December’s general election, but he’s struggled to bridge the ideological differences between anti-establishment group Podemos and the liberals of Ciudadanos, his most obvious allies. That impasse prompted a repeat election in June.

Sanchez lost control of his party over the course of a rollercoaster week that began with his party falling behind Podemos in two regional elections in northern Spain. The party’s divisions broke open on Wednesday, when former Socialist Prime Minister Felipe Gonzalez accused the current leader of lying to him over his political strategy and a rebel bloc resigned en masse from the party’s executive committee.

The leader’s two-year term began with a vote of party members just after his party had lost almost half of its support in the European Parliament’s elections of 2014. That was also the moment when Podemos burst onto the political scene giving voice to the millions of voters enraged by the economic crisis and a wave of corruption among the traditional parties.

Sanchez led the party into two general elections, recording the party’s worst ever result on both occasions. In March 2015, the Socialists lost their majority in Andalusia, where they have been ruling for almost four decades.