Spain Economy Shows Mixed Signs as June Repeat Vote Looms

Bloomberg - 03.06.2016

Prime Minister Mariano Rajoy's conservative People's Party (PP) won the most seats in the parliamentary election on Sunday, exit polls showed.

The repeat parliamentary election aimed at breaking a six-month-long political stalemate, but the outcome looked to leave Spain's political landscape just as fractured as before.

PP was on track to win 137 seats compared to 123 seats last December, according to state broadcaster RTVE with over 90 percent of the votes counted.

Despite the gains, the results put the conservative party far short of the 176 seats needed for a majority in the 350-seat parliament.

The Socialists, a 137-year-old party, came in second place and are set to pick up 85 seats, down from 90 seats last year.

Unidos Podemos, an alliance of leftist parties led by Podemos, was predicted to pick up 71 seats. Earlier results initially suggested that Unidos Podemos had come in second place, which would have been signified an unprecedented shift in Spain, but official results put the coalition in third place.

"We had expected to do better," Podemos alliance head Pablo Iglesias said following the results.

Liberal upstart Ciudadanos, potentially a PP ally, was on course to win 32 seats, down from 40 in December.

Rajoy demands 'right to govern'

Although PP has ruled for the past four years, the party has struggled to find support from rival parties. Sunday's inconclusive ballot now sends political leaders into another six months of negotiations on who should form a government.

Following the surge of support for Rajoy's center-right party, the prime minister declared he would make a push for power in the upcoming coalition talks.

"We won the election, we demand the right to govern," Rajoy told a victory rally in Madrid.

Spain, the European Union's fifth-largest economy, has yet to have a coalition government. Should the parties fail to agree, the country could see a third general election in six months' time.

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