Spain's conservatives win, seek coalition with Socialists

Spain's acting Prime Minister Mariano Rajoy said Monday he plans to seek a "grand coalition" with the center-left Socialists after his ruling conservative Popular Party won the country's unprecedented repeat election.

The Popular Party won 137 seats in Sunday's vote, 14 more than in a similar vote in December but still short of the majority in the 350-seat Parliament that it enjoyed after the 2011 election.

Rajoy's party also won the December election but no other major party was willing to help him form a government — a scenario that could happen again.

The party's leadership was meeting Monday to review its options. Prior to that, Rajoy, 61, told Cope radio he would push for a "grand coalition" with the Socialists, who placed second on Sunday, winning 85 seats in their worst-ever result.

"We won the election. We demand the right to govern," Rajoy said at a victory rally.

Spanish politics have been in a stalemate since December. Part of the problem is that the country, unlike other European nations, has never had a coalition government. Instead, the Popular Party and the Socialists have alternated in power for decades.

Rajoy's next best option would appear to be to strike a deal with the business-friendly Ciudadanos party, which came in fourth with 32 seats.

Ciudadanos leader Albert Rivera rejected backing any government led by Rajoy following the December vote, but recently suggested he might ease that stance. That would still leave Rajoy needing the support of smaller groups to make up a majority.

In third place, with 71 seats, was the left-wing Unidos Podemos (United We Can) group, which brings together the communists, the Greens and the two-year-old Podemos party, which grew out of a grassroots anti-austerity protest movement.

The alliance, headed by pony-tailed political science professor Pablo Iglesias, had hoped to overtake the Socialists and break the country's traditional two-party system.

"The most likely outcome after some noise is a grand coalition between the two traditional mainstream parties, the conservatives? and the Socialists, possibly even backed by the liberals," Berenberg Bank economist Holger Schmieding in an emailed analysis. "The pressure on the mainstream parties to avoid a third round of elections will be immense."

The newly-elected deputies will take their seat July 19, after which King Felipe VI will consult party leaders and likely nominate one to try to form a government.

Following the December election, Rajoy acknowledged he didn't have any support to form a government and renounced the opportunity to even try. The king then called on the second-placed Socialists to try, but they were also unable and the monarch eventually called a repeat election.

"With his big victory, Rajoy now certainly has a stronger hand than after the December election," Antonio Barroso, a London-based analyst with the Teneo Intelligence political risk consulting group, said Monday. "However, it is unlikely that other parties will rapidly give him their support."

When it was in power, the Popular Party had championed its role in Spain's economic recovery following a severe crisis. But it still had to weather much criticism over the country's high unemployment, cuts in government spending on welfare and education and political corruption scandals.