Spanish vote delivers more uncertainty for Europe after Brexit

MADRID,  (Reuters) – Spanish elections delivered a hung parliament for the second time in six months yesterday, adding to political uncertainty in Europe after last week’s shock Brexit vote and piling intense pressure on Spain’s warring politicians to form a government.

Acting Prime Minister Mariano Rajoy’s centre-right People’s Party (PP) again emerged with the single biggest bloc of seats but fell short of a majority, leaving the euro zone’s fourth-largest economy at risk of another lengthy political stalemate or even of a third general election.

The PP was the only major party to increase its share of seats from December’s inconclusive poll, sapping the power of a wave of new parties which had fed on years of deep recession and public anger over corruption scandals within the major parties.

“We have won the elections,” Rajoy told hundreds of cheering supporters outside PP headquarters in Madrid late yesterday.

“We claim our right to govern.”

The PP won 137 seats, up from 123 in December but short of the 176 needed for an outright majority.

Spain now enters another round of backroom talks to see which parties can form a governing coalition, a task that eluded them despite months of negotiations following the December vote.

It was unclear whether Britain’s vote to leave the EU, which hit financial markets in indebted Spain particularly hard, led more people to vote for the conservative PP. However, the uncertainty and confusion sweeping Europe in the wake of Brexit will pressure politicians to reach a deal quickly.

Among the hundreds of people cheering Rajoy and other party leaders on Sunday, waving blue party flags and red and yellow Spanish flags, there were some more cautious PP supporters.

“Whether we have a government or not will depend on what the left wants. Without a majority it’s hard to do anything,” said Raul Quintana, a 42-year-old concierge from Toledo.

Options to form a government include a centre-right pact between the PP and liberal newcomer Ciudadanos, a German-style grand coalition between the PP and the Socialists, or even a minority PP administration.