Spain’s Rajoy expected to fall in no-confidence motion

PIERRE-PHILIPPE MARCOU | AFP | Getty Images

Spanish Prime Minister Mariano Rajoy attends a session at the Lower House of Parliament in Madrid on May 30, 2018, two days before the assembly will debate a no-confidence motion against his government.

Spanish Prime Minister Mariano Rajoy’s hours in office appeared numbered on Thursday after reports that a Basque political party would back a no-confidence vote over a corruption case, paving the way for Socialist leader Pedro Sanchez to take power.

Cadena Ser radio and La Sexta television reported on Thursday that the Basque Nationalist Party would vote against Rajoy, giving his opponents enough votes to unseat him.

Sanchez appeared to have secured 180 votes to become prime minister, more than the absolute majority of 176 votes he would need to take power immediately if the no-confidence vote is held on Friday as scheduled. Rajoy could potentially slow the transition if he were to resign before the vote.

Rajoy’s departure would trigger a second political crisis in southern Europe, further unnerving financial markets already wrongfooted by failed attempts to form a government in Italy three months after a national election.

With most Spanish parties in favor of respecting EU fiscal rules, however, it is highly unlikely that a new government would follow Italy in questioning the euro single currency.

News of Rajoy’s likely downfall sent Spain’s blue-chip index Ibex down 0.72 percent at 1405 GMT, erasing a 0.9 percent gain earlier in the day, but did not trigger any immediate sell-off.

Resigning before the vote takes place on Friday would spare Rajoy the humiliation of becoming the first Spanish Prime Minister to lose a no-confidence vote. He did not attend the afternoon session of the debate on Thursday.

If he resigns, the government of his People’s Party would go into caretaker mode until a new prime minister is sworn in, which could take several weeks or months. If the vote goes ahead and Rajoy loses, Sanchez would immediately replace him.

“Are you ready to resign? Resign today and leave by your own will,” Sanchez told Rajoy. “You are part of the past, of a chapter the country is about to close,” he also said.