Fugitive Catalan leader holds key to Spanish electoral impasse
Summary
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Stocks, bonds fall as no party or bloc clinches majority
Spain faces lengthy negotiations or fresh election
PM Sanchez has more options with regional parties
Exiled Catalan independence leader signals tough stance
BARCELONA/MADRID, July 24 (Reuters) - A Catalan independence leader on the run from Spanish justice could hold the key to unlocking a political impasse after Sunday's election ended in a hung parliament.
Former Catalan regional government head Carles Puigdemont, who lives in self-imposed exile in Belgium since leading a failed push to split Catalonia from Spain in 2017, unexpectedly finds himself a potential kingmaker after no bloc on the left or right won enough seats to form a majority.
One path out of the labyrinth would be for Socialist Prime Minister Pedro Sanchez to secure a vote in favour, or at least an abstention, in a parliamentary vote on forming a government from Puigdemont's Junts party in exchange for further concessions on independence.
The centre-right People's Party (PP) and the far-right Vox won the most seats in parliament with a combined 169 - short of the 176 seats needed for a majority and confounding poll predictions.
The ruling Socialists (PSOE) and far-left Sumar won 153 but have more possibilities for negotiating support from small Basque and Catalan separatist parties, as they did following 2019's election.
Sanchez could win over left-wing separatist party Esquerra Republicana de Catalunya (ERC). But he will likely also need the backing of the more hardline Junts, which has not supported Sanchez in the past four years.
Junts Secretary General Jordi Turull said on Monday he would use the "window of opportunity" created by the election impasse to achieve Catalan independence.
"The state knows that if it wants to negotiate with us, there are two issues that are fundamental and generate consensus in Catalonia which are an amnesty and self-determination," he said in an interview with local radio station RAC 1.
Turull was among the nine Catalan jailed separatist leaders pardoned by Sanchez in 2021 for their role in the 2017 independence bid. However, many more are still facing trial, chief amongst them Puigdemont.
Puigdemont, who still wields considerable influence within Junts, said in mid-July the party would not support Sanchez because he was unreliable. Early on Monday he tweeted that Junts is a party that keeps its word.
Puigdemont was stripped of the immunity he had as a member of the European Parliament earlier this month, paving the way for his extradition, as Spanish authorities have requested for the past six years.
The Catalans are likely to play hardball in any negotiations after the election laid bare that a rapprochement with Madrid has not worked in their favour, said Joan Esculies, a writer and analyst on Catalan politics.
"The independence movement continues to lose votes," Esculies said. "The only thing that keeps them in the headlines right now is the fact that the combination of seats means that Junts' and Puigdemont's decision...holds the key to the formation of the government."
[1/4]Catalan MEP Carles Puigdemont speaks as he holds a joint press conference with Catalan MEPs Antoni Comin and Clara Ponsati regarding their immunity at the European Parliament, in Brussels, Belgium July 5, 2023. REUTERS/Yves Herman/File Photo
ERC and Junts, the two main Catalan separatist parties, lost 550,000 votes in Sunday's election compared to 2019, while the Socialists gained 418,000 votes and were the most-voted party in the region, gaining seven seats at their expense.
DIFFICULT SITUATION
However, after winning the most seats, the PP will be given the first stab at trying to cobble together enough votes in parliament to win a prime-ministerial investiture vote. But its alliance with the far-right Vox and tough stance on separatism will make it difficult to gain support from any other faction.
"It is a very difficult situation to resolve," a Vox official told Reuters.
If neither bloc is able to garner enough parliamentary support to form a government, a second election is a possible outcome.
Going into the election, the PP had looked set to forge an alliance with Vox to govern - an outcome that would have brought hardline nationalists into government for the first time since the end of the Franco dictatorship and Spain's return to democracy in the 1970s.
As it happened, the Socialists performed better than polls had predicted. PP leader Alberto Nunez Feijoo nonetheless claimed victory and urged other parties not to block his bid to form a government for the sake of stability in Spain.
SEPARATIST DEMANDS
The seats of Basque parties are also likely to come into play.
"After the election, we have a very, very difficult parliamentary arithmetic, but it seems our votes will be once again decisive," Anionic Ortuzar, leader of moderate nationalist Basque party PNV, said. PNV secured five seats in the lower house.
Arnaldo Otegi, the head of Basque separatist EH Bildu party, said he would definitely not support the PP and Vox to form a government. Otegi did not mention the likelihood of supporting a leftist coalition.
The slim margins mean even the single seat obtained by other regionalist groups - from Canary Islands, northwestern Galicia and northeastern Navarra - could turn decisive.
The law does not set a deadline for the process but if no candidate secures a majority within two months of the first vote on the prime minister, new elections must be held.
Spanish stocks fell and government bond prices dipped in early trading amid the prospect of a protracted deadlock.
Reporting by Joan Faus in Barcelona, and Belen Carreno and Emma Pinedo in Madrid; additional reporting by Inti Landauro; writing by Charlie Devereux, Editing by Angus MacSwan and Aislinn Laing
Our Standards: The Thomson Reuters Trust Principles.
Source: Reuters.com
