(Bloomberg) -- Spain is more ungovernable than ever and the person getting blamed for the mess is acting Prime Minister Pedro Sanchez.

He staked his career on an unnecessary election, six months after the last one, hoping to bolster his support. Instead his Socialists slipped. One potential coalition partner was obliterated while another, Podemos, attacked him for the recklessness of holding the vote. The biggest winner on the night was Vox, a Spanish nationalist group that will raise the political costs of any kind of deal.

After a bruising Sunday, Sanchez has to pick up the pieces. As Ignacio Jurado, a political analyst with Quantio, put it: “His bet turned out badly.”

Paradoxically, Sanchez could still end up in power again. The Socialists remain the most popular party in the country, so they get first dibs at forming a government, but the political landscape is so fractured that the task of cobbling together a coalition is unenviable.

The result also leaves Spain with no direction as the economic outlook darkens and the challenges of Catalan separatism rattle at its constitutional framework. And it raises questions about Sanchez’s own judgment: he bet that voters would be drawn to promises of stability and progressive policies.

Instead they are angry at the political games. Israel Gomez, for example, switched from the Socialists to Podemos: “Sanchez should have done a pact with Podemos when he had the chance.” For the 43-year-old street cleaner, Sunday’s results just confirmed he was right.

Take a Chance

It was April 28, when Sanchez was feeling on top of the world on election night.

His party had gone from 85 seats to 123 in the 350-seat chamber. He felt so much closer to the 176 seats needed to have an absolutely majority and he was tiring of Podemos, the anti-austerity party that was propping him up. It was steadily losing ground as the pain of the financial crisis faded from memory.

Spain’s economy was doing well and Sanchez sensed an opportunity: take his chances with another vote rather than accept the compromises required to forge an alliance. Within days he was telling his team that he’d need to repeat the election, according to two people familiar with the situation.


But rather than make him less beholden to Podemos, Sunday’s outcome makes him even more so. And the bad blood between Sanchez and Pablo Iglesias, the pony-tailed leader of Podemos, is rarely far from the surface.

Podemos rejected some initial overtures from the Socialists to form a coalition government and after losing a confidence vote in July, Sanchez said he wouldn’t form a coalition with Podemos because Iglesias couldn’t be trusted.

Now he has to go back and court him all over again.

On Sunday night, Iglesias offered to start coalition talks on Monday and Sanchez, sure enough, has signaled that he’s ready to climb down. “One way or another there will be a progressive government led by the Socialist party,” he told supporters in Madrid.

Both Weakened

But the problem is that both parties are in a weaker position. They have lost 11 seats between them on Sunday, leaving them 21 short of a majority. Sanchez might scratch together another 15 votes from minor parties in their orbit. But he’d still need help from either the Catalan separatists or the main opposition People’s Party.

“We have seen how irresponsible it was to call elections based on the calculus of party interests,” Alberto Garzon, a Podemos lawmaker, said. Sanchez’s advisers reckoned that “stoking social tensions would get a good result,” he added.

The Socialists versus the PP is the traditional rivalry in Spanish politics. It was a classic two-party system prevalent in many Western democracies. But that model, in Spain and elsewhere, is splintering and not coming back any time soon.

There have been calls for them to join up in a German-style grand coalition to break the impasse. Indeed, of all the main party leaders, Sanchez has ironically the best relationship with Pablo Casado of the PP, one of his advisers said.

But the climate is too polarized for that, and the election gamble has complicated that option too.

The toxic atmosphere heading into the vote, drove supporters toward the nationalist group Vox. While the PP rose to 88 seats from 66, Vox more than doubled its number of lawmakers to 52 and is challenging Casado for leadership on the Spanish right.

Vox’s leader Santiago Abascal was greeted by a riotous crowd cheering and chanting “Viva Espana” as they waved national flags outside his party headquarters on Sunday night.

Casado was given only polite applause by his PP supporters and the turnout was so poor he didn’t even need to use the temporary stage that had been set up.

So Spain faces another drawn out process that will push Sanchez’s negotiating skills to the limit. Last year he managed to pull off an unlikely alliance that included both Podemos and the Catalan separatists to oust the PP administration with a no-confidence vote.

But since then he’s struggled to repeat the trick, and the longer this all drags on, the less forgiving voters get. If Sanchez was looking for an election before, he won’t be seeking another one anytime soon.

--With assistance from Charles Penty, Jeannette Neumann, Charlie Devereux, Esteban Duarte, Thomas Gualtieri and Katerina Petroff.

To contact the reporter on this story: Ben Sills in Madrid at bsills@bloomberg.net

To contact the editors responsible for this story: Ben Sills at bsills@bloomberg.net, Flavia Krause-Jackson, Jon Herskovitz

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