Spain's Rajoy Needs Handful of Votes to Break Deadlock

Spain's acting Prime Minister Mariano Rajoy's center-right People's Party, or PP, needs seven votes to form a coalition government by Wednesday to avoid Spain's third national election in a year. 

The PP won the most votes in June's election but lacks a clear majority, even with the support of Spain's fourth-largest political party, the centrist Ciudadanos, or Citizens.  The main opposition Socialists have so far refused to endorse Rajoy or smooth the way to a PP-led minority government.

Should Rajoy fail to win a simple majority in Wednesday's parliamentary vote, a third, and final vote will be held Friday. If that fails as well, a third round of national elections will be triggered in a calendar year. Spain has been without a functioning government since inconclusive elections in December and June failed to hand a convincing mandate to any political party. So far, party leaders have been unable to agree on forming a coalition.

The eight-month political deadlock has delayed investments in infrastructure such as roads and rail and put high-ranking government appointments on hold, leaving some Spanish embassies without an ambassador.

The Socialists are unlikely to back down from that position given local elections in September in the northern regions of Galicia and the Basque Country where support for Rajoy's PP could cost votes for the left-wing party.

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By the time of Wednesday's vote, Spain will have been 254 days without a government, the longest time in the country's democracy.

The acting prime minister also announced that he will meet on Monday with his rival Pedro Sanchez, from the Socialist Party or PSOE in order to reach an agreement, however analysts and Rajoy himself are not very optimistic. 

"I'm going to tell him what I have been saying since December 21 but  now with 170 seats. That nobody has a majority, this time the PP has more votes and seats but not a majority... I'm going to tell him  that Spain urgently needs a government and that a third election is nonsense," Rajoy said. 

Meanwhile, the anti-austerity coalition Unidos Podemos which gained popularity and influence in past two failed elections, has asked the parties that will say "no" to the investiture of Mariano Rajoy to "stand firm," and criticized to Citizens Party for supporting the conservative leader.  

The leftist coalition has the support of millions of Spaniars tired of austerity measures implemented by the PSOE and the PP, over decades of a bipartisan system, including cuts to social services, pensions and salaries, labor market reforms and other privatizations.

Since 2008 Spain has been hit hard by the global economic crisis and currently has a general unemployment rate of 21.6 percent and a 47.7 percent rate for youth. Meanwhile, poverty and social exclusion rose from 10.4 million people in 2007 to 13.4 million in 2014, according to official figures.

Spain's economy, on the rebound from a recession which ended three years ago, has powered ahead despite the lack of a functioning government, with the latest data showing strong growth fueled by consumer spending and demand for exports.

The acting government expects the economy to expand 2.9 percent this year - one of the fastest rates in the euro zone. However, economists say growth could be even higher if political uncertainty was removed.

"The lack of government is having a negative impact," said Miguel Cardoso, an economist at BBVA, whose estimate of 3.1 percent for economic growth this year would be about 3.5 percent if there was a government in place.