Spain's government loses budget vote, paving way for snap election

  • Spain looks likely to elect a new government after the Socialist Workers' Party failed to pass its 2019 budget.
  • The door could now open for a radical right-wing party to take seats in the Spanish Congress.
  • Spain's leader is to speak after Friday cabinet meeting - official
Spanish Prime Minister Pedro Sanchez attends a debate on the government's 2019 budget during a parliament session in Madrid on February 13, 2019.
PIERRE-PHILIPPE MARCOU | AFP | Getty Images
Spanish Prime Minister Pedro Sanchez attends a debate on the government's 2019 budget during a parliament session in Madrid on February 13, 2019.

Spain's parliament rejected the government's 2019 draft budget on Wednesday, pushing the country to the brink of a national election.

Sources in the government and the Socialist party of Prime Minister Pedro Sanchez told Reuters on Tuesday that he would call a snap election if the draft was rejected, with April 14 or April 28 the most likely dates.

The Socialists hold less than a quarter of the seats in parliament and needed support from smaller regional parties, including the Catalans, to get the budget proposal voted through.

But the Catalan parties, unhappy with the government's refusal to consider or discuss - amongst other issues - an independence referendum for their northeastern region, voted against it, as did the centre-right and the conservatives.

"This shows that the right wing in this country is intent on blocking social progress," Budget Minister Maria Jesus Montero told reporters, in the government's first reaction to the vote.

In all, 191 lawmakers voted against the budget and 158 in favour, with one abstention.

Conservative People's Party leader Pablo Casado called the outcome "a de facto confidence vote against Pedro Sanchez."

Spanish stocks edged lower and Spain's government bond yield spread over safer Germany widened after the vote. Spain's IBEX was the only major euro zone equity index in negative territory.

The political sources said on Wednesday it was not clear yet when the election would be announced.

But they also said Sanchez wanted a ballot as soon as possible to mobilise left-leaning voters following a rally in Madrid on Sunday by three right-wing parties, including the far-right Vox, which has jumped in opinion polls with a rise in anti-Catalan feelings throughout Spain.

The deep divisions between pro-unity Spaniards and secessionists in Catalonia were highlighted on Tuesday with the start of a trial of 12 separatists charged with rebellion following an attempt in October 2017 to secede from Spain.

Friday announcement?

Spain's Prime Minister Pedro Sanchez will speak publicly after chairing a cabinet meeting on Friday, an official in his office said on Wednesday, amid expectations of an announcement of snap elections after his budget was rejected by parliament.

"The decision of the Prime Minister Pedro Sanchez will be made known after the end of the meeting," the official said in a message, though he did not clarify what the decision would be about.