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Spain’s Rajoy says budget talks with rival are first step amid deadlock

Spanish acting PM Rajoy and Ciudadanos party leader Rivera pose before the start of their meeting at the Spanish Parliament in Madrid

Spain‘s acting Prime Minister Mariano Rajoy said on Wednesday his People’s Party (PP) and smaller rival Ciudadanos had taken a first step towards unfreezing deadlocked Spanish politics by agreeing to discuss a 2017 budget proposal due in mid-October.

Rajoy said a day earlier that Spain may have to hold its third election in under a year if parties such as the Socialists continued their steadfast opposition to his centre-right PP and its efforts to form a government.

Spain has been under a caretaker administration for nearly eight months after a December election stripped the PP of its majority in parliament and coalition talks were inconclusive. Another election in June also failed to result in a government.

“This is a first step and, as you know, even the longest journey always starts with a first step,” Rajoy told a news conference after meeting Ciudadanos (Citizens) leader Albert Rivera.

The centrist Ciudadanos has been the most forthcoming of Rajoy’s rivals, promising to abstain in any parliamentary confidence vote to allow a PP government.

But Ciudadanos, which came fourth in both ballots, has too few seats to form a parliamentary majority with the PP alone. For this only the Socialists are big enough, but the party has repeatedly said it would oppose Rajoy.

At an earlier news conference, Rivera heaped pressure on Socialist leader Pedro Sanchez, urging him and his party to accept a PP-led minority government.

“If he keeps up his inflexible ‘no, no, no’ stance, Spain will be condemned to a perpetual blockage and an unprecedented institutional crisis,” Rivera said.

It is unclear how long negotiations between parties can drag on for. Rajoy accepted a mandate from Spain‘s King Felipe to form a government but has yet to set a date for a confidence vote.

At Wednesday’s news conference, Rajoy announced the PP had drafted a list of ten policy proposals to form the basis of any coalition talks, and that he and Rivera had agreed to discuss the most pressing, the 2017 national budget, plans for which need to be presented to Brussels by mid-October.

Other policies on the list include an education reform, tweaks to labour laws and an overhaul of the regional financing and welfare systems, he said.

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