Unlike Rome's power struggle, where markets were fearful a fresh election could be framed as a de facto referendum on Italy's role in Europe, Spain's political drama hinges on a no-confidence vote for Prime Minister Mariano Rajoy.
Last week, a long-running corruption trial — known as the Gurtel case — found dozens of people linked to Rajoy's governing People's Party (PP) guilty of benefitting from illegal kickbacks. That prompted socialist leader Pedro Sanchez to push for a vote of no-confidence against the incumbent.
The vote, scheduled to be held Friday afternoon, could see the collapse of Spain's center-right PP administration after more than six years in government.
Spain's main opposition Socialist Party is urging lawmakers to consider supporting its motion in order to replace Rajoy's weak minority government with a socialist administration before then heading back to the ballot box at a later date.
On Wednesday, Rajoy said in parliament that he intended to see out his four-year term in office without calling an early election. However, opposition parties are expected to continue to try to replace him even if the no-confidence motion fails.
The vote, which is due to follow a two-day parliamentary debate starting Thursday morning, is widely thought to be too close to call.
Antonio Barroso, deputy director of research at Teneo Intelligence, said the chances of Sanchez toppling Rajoy were "on the rise." Yet, he suggested the prospect of a new socialist leader coming to power was unlikely to lead to any drastic changes to some of the country's fundamental government policies.
"A minority socialist administration would be unlikely to lead to a huge shift in economic policy. In fact, Sanchez would probably make a point of respecting the country's EU commitments."
"Moreover, while the socialist leader could signal his openness to establishing a dialogue with the Catalan separatists, it is extremely improbable that he would be willing to negotiate a self-determination referendum with them," Barroso said in a research note published Wednesday.
Last October, Catalan separatists declared independence from Spain after the prosperous region's then government organized a disputed referendum.
In response, Rajoy invoked constitutional powers to fire Catalonia's administration, withdraw the region's autonomy and call snap elections in December.
However, pro-independence parties in Catalonia have since regained their parliamentary majority.
Spain's Ciudadanos (Citizens) party, which has led in some recent opinion polls, has so far refused to support the no-confidence motion. Instead, party leader Albert Rivera has said his party would support a separate vote of no-confidence which proposes an independent candidate whose sole focus would be setting a date for an early election.
Amid a lack of support from Citizens, the chances of a successful no-confidence vote appear to rest on the mood among several smaller political groups — including parties that campaign for an independent state in Catalonia.
Two years ago, Spain endured 10 months of political limbo after two inconclusive general elections and the elevated prospect of another snap poll later this year could see a prolonged period of uncertainty return once again.
"The odds of an early election in Spain have risen markedly," analysts at Rabobank said in a research note published Wednesday.
Rabobank's analysts also warned that Italian bonds still were much more likely to underperform Spanish bonds over the coming months. That's because the prospect of a populist coalition government in Rome constituted a "far greater threat" than an administration change in Madrid.