Spain’s Rajoy calls for alliance of like-minded parties

Spain's acting prime minister Mariano Rajoy on Tuesday renewed his overtures to political rivals after an inconclusive election, urging them to back a government that would defend Spanish unity in the face of a Catalan independence drive.

Mr Rajoy, whose centre-right People’s Party (PP) won the most seats in the December 20th ballot but was well far short of a majority, also said that another general election would be undesirable. If it came to that, he would want to lead his party into it once again, he said.

Mr Rajoy did not mention his Socialist opponents or centrist Ciudadanos by name in his appeal for a “broad-based, consensus government”. But he called for parties which share its stance on issues such as Spanish unity to come together, in a nod to these rivals.

Divisions over whether or not Catalonia, a wealthy northeastern region, should be allowed a referendum on independence have become a stumbling block as political parties vie to form a government.

The Socialist Party (PSOE) on Tuesday reiterated it would in no way back a government led by the PP or Mr Rajoy. But it may also struggle to pair up with leftist Podemos, which supports a Catalan referendum when the Socialists do not.

Spanish bond yields held firm while other euro zone yields rose, in a sign markets see a leftist coalition in Spain as increasingly unlikely.

Mr Rajoy made it clear he still considered some form of “grand coalition” of the PP and the Socialists to be an option.

“There is a majority of Spaniards who have expressed their backing for fundamental issues, such as defending Spanish unity,” he told a news conference. “The [outcome] that would best match the will of the majority would be a government with broad support [from parties].”

An alliance of this kind would give Spain the stability it needs to continue its economic recovery, Mr Rajoy said. He estimated Spanish output would grow 3.2 per cent in 2015, compared to the government’s previous forecast of 3.3 per cent.

The PP won 123 seats in the general election, shy of a 176-seat parliamentary majority and meaning it needs other parties to back it or abstain in a vote for it to form a government.

The Socialists came second with 90, followed by Podemos and Ciudadanos with 67 and 40 seats respectively.

Senior Socialist politician Cesar Luena told a separate news conference that Spain "needs big pacts", but insisted that the party would veto a PP government. – (Reuters)