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Spanish Government at Risk as Sanchez Rebuffs Partner’s Demands

Spanish Government at Risk as Sanchez Rebuffs Partner’s Demands

(Bloomberg) -- Spain’s Socialist party rejected demands made by its best hope to form a coalition government, pushing Pedro Sanchez’s bid to stay on as prime minister to the brink of failure and making a fourth election in as many years more likely.

With a critical parliamentary vote looming later on Thursday, Deputy Prime Minister Carmen Calvo said the Podemos party had essentially demanded to “stuff almost the whole cabinet,” which would mean having what she termed a “parallel” administration. “They’ve literally asked us for the government,” Calvo told Cadena Ser radio in an interview.

Spanish Government at Risk as Sanchez Rebuffs Partner’s Demands

The standoff between the Socialists and Podemos comes just hours before Sanchez goes to parliament in a final attempt to get its backing for a new government. He needs the support of Podemos’s 42 deputies to be sure of winning the vote. If he loses, the clock will start ticking toward new elections, possibly in November.

At stake is Sanchez’s ability to build a stable administration that can protect an economic expansion that began in 2013. But even if he succeeds in forming a coalition with Podemos, he won’t have a parliamentary majority and may have to rely on smaller groups including Catalan separatists to pass legislation.

In a frenetic morning, Podemos made a counteroffer to the Socialists seeking a government vice-presidency and power over social policy, health, labor issues and science and universities. The Socialists rejected it minutes later.

Pablo Echenique, a Podemos negotiator, told broadcaster LaSexta there was still time for talks to progress. In the meantime, Podemos officials are deciding how they will vote in Thursday’s parliament session.

“We weren’t asking for the moon,” Echenique said in a separate interview with TVE.

The ballot in parliament will be decided by a simple majority, meaning Sanchez will win if the number of deputies supporting his candidacy exceeds those against. He lost a vote on Tuesday that required an absolute majority in the 350-seat parliament.

The Socialists and Podemos together would have 165 seats, compared with 147 for the opposition combination of the People’s Party, Ciudadanos and Vox. On Thursday, the Catalan separatist party Esquerra and the Basque party Bildu said their combined 19 deputies would abstain. The Catalan secessionists of Junts, with seven votes, will vote against Sanchez.

In a national election in April, the Socialists emerged as the biggest force but well short of an overall majority. That left Sanchez with no choice but to seek the support of Podemos and other smaller parties.

--With assistance from Macarena Munoz and Charlie Devereux.

To contact the reporters on this story: Charles Penty in Madrid at cpenty@bloomberg.net;Thomas Gualtieri in Madrid at tgualtieri@bloomberg.net;Rodrigo Orihuela in Madrid at rorihuela@bloomberg.net

To contact the editors responsible for this story: Chad Thomas at cthomas16@bloomberg.net, Iain Rogers, Chris Reiter

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