Spain’s divided opposition struggles with plan to oust Rajoy

Bloomberg

Spain’s Socialists are facing an uphill task in reconciling differences between opposition parties as they seek to garner support for dislodging Prime Minister Mariano Rajoy.
The no-confidence motion filed on May 25 by the Socialists, the largest opposition group, needs the backing of several other parties to succeed. The trust vote request, triggered by the sentencing last week of a former official of Rajoy’s People’s Party in a corruption scandal, will be placed before a cross-party parliamentary party board on Monday.
The centrist Ciudadanos, an occasional ally of the Rajoy government, wants the motion to be called off and favours fresh elections. The Basque nationalists, meanwhile, are seeking a promise that a Socialist administration would grant their demand for self-government in the region as a condition to get their assistance, and the Catalan nationalist group PdCat said they wouldn’t be caught on the same side as Ciudadanos in removing Rajoy.
Although a long drawn out political drama could unsettle markets and disrupt the economy, a lack of unity among opposition parties combined with opinion polls suggesting a fractured mandate once again may keep Rajoy’s chances of survival alive.

Rajoy Digs In
Despite the divisions, the Socialists seem unfazed. Jose Luis Abalos, a top ranking Socialist official, called on all lawmakers to support the motion, and said his party isn’t interested in negotiating with other groups.
“We are acting as we have to act, we don’t have another way or possibility than the one we are exercising,” Abalos said in a speech at a party event in the region of Valencia, Spain. “We hadn’t had such a categorical ruling as the one we’ve seen this week.”
While Rajoy was not on trial in the case that led to a 33-year jail term for a former official, the Socialists say he can’t govern as the malfeasance occurred under his watch. Rajoy signaled he has no intention of stepping down or calling elections.
Spanish stocks and bonds fell sharply on May 25. The benchmark Ibex-35 declined 1.7 percent, the most in almost three months. Investors may have overreacted, according to Gonzalo Sanchez, an asset manager at Gesconsult.
“Many times, investors shoot first and asks questions afterwards but the situation is not that bad,” Sanchez, who helps manage 750 million euros at Madrid-based Gesconsult said. “If a snap election takes place, whatever coalition is formed by PP, PSOE and Ciudadanos would be good. This is not like Italy.”
The government estimates that the political blockade could slash more than 4.8 billion euros ($5.6 billion) from Spain’s gross domestic product, acc-
ording to a report seen by Bloomberg News.