2015–16 Spanish government formation

2015–16 Spanish government formation

300px Mariano Rajoy voting on 20 December 2015.
Date	1st: 21 December 2015 – 26 April 2016 2nd: Starting 27 June 2016
Location	Madrid, Spain
Cause	Spanish general election, 2015
Participants	Felipe VI PP PSOE Podemos C's ERC DL PNV Compromís IU-UPeC EH Bildu CC
Outcome	Signing of the PSOE–C's pact. Pedro Sánchez's failed investiture. Inconclusiveness of government formation negotiations leading to fresh election.

The events surrounding the formation of Spain's government in 2016 have taken place from 21 December 2015 to the present day. The December 2015 general election failed to produce an overall majority for any of the country's main political parties. After a series of inconclusive inter-party negotiations, Pedro Sánchez failed to become the Prime Minister after failing two investiture votes, with a margin of 130–219 and 131–219, respectively, the first person to do so after the Spanish transition into democracy.

According to Article 99.5 of the Spanish Constitution, "if within a period of two months from the first investiture vote no candidate has obtained the confidence of Congress, the King shall dissolve both chambers and call a new election, with the endorsement of the Congress President." With the first investiture vote being held on 2 March 2016, this meant that the deadline for a new government to be elected was set for 2 May 2016, after which a fresh election would be automatically called for 26 June.

In the meantime, the previous Cabinet headed by Mariano Rajoy assumed caretaker functions.

After failure of negotiations had become apparent by late April, King Felipe VI failed to nominate a new candidate for investiture, with President of the Congress Patxi López announcing a new election to be held, with the King dissolving the Cortes Generales on 3 May.

First attempt (December 2015 – April 2016)

Post-election developments

Initial statements

As the election produced a hung parliament, a multi-party agreement was expected to be required. Mariano Rajoy said he would try to form an administration, but Pedro Sánchez called for a change in government, while recognising the PP's right to try and form a government first. Two possible coalitions, the PP with C's and PSOE with Podemos, would both come up short of a majority by themselves.

There was speculation around four possible outcomes:

Congress resulting from the 20 December 2015 general election.

• A grand coalition of PP and PSOE, which would be a new phenomenon in Spanish politics but the only feasible two-party accord that would be able to reach an absolute majority in Congress.
• PSOE, Podemos and C's.
• PSOE, Podemos and smaller regional parties.
• Parliamentary deadlock lasting for two months from the first failed investiture vote, resulting in a new general election to be held sometime in 2016.

C's leader Albert Rivera announced he would not actively support either PP or PSOE, but that he was willing to abstain and allow the PP to form a government. He did, however, state his opposition to any pact in which Podemos was involved. In the meantime, Pablo Iglesias from Podemos laid out stiff terms in order to even consider starting negotiations for a coalition with the PSOE. Podemos' Policy Secretary, Íñigo Errejón, also expressed the party's initial refusal to support Sánchez as a prospective candidate for prime minister, suggesting instead to search for "an independent candidate, above parties". The PSOE accused Iglesias of "filling the political space with red lines" and demanded that Podemos withdraw its condition to hold a self-determination referendum in Catalonia before discussing a pact, with Sánchez stating that he would not be Prime Minister "at any price". Others within the party pointed out that, even if the PSOE obtained Podemos's support, it would not muster a majority without support from other parties.

PSOE crisis

Attention focused on the PSOE as it became increasingly clear that it had been unexpectedly placed in a kingmaker scenario. The PSOE leadership had announced their intention to vote against a government headed by Mariano Rajoy and rejected the possibility of abstaining. However, regional PSOE leaders, headed by President of Andalusia Susana Díaz, warned Pedro Sánchez against reaching any kind of agreement with Podemos, seeing the conditions put forward by Pablo Iglesias as "unaffordable", while several party regional premiers—such as Ximo Puig, Javier Fernández, Emiliano García-Page or Guillermo Fernández Vara—favoured letting the PP try to form a government on its own first. Both C's and PP pressured the PSOE to abstain to allow a PP minority cabinet to be formed, but Sánchez's team did not hide their concerns that supporting Rajoy, either directly or by abstaining, would leave Podemos as the de facto main opposition party, and maintained their opposition to it.

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Pedro Sánchez and Susana Díaz's enduring antagonism erupted with force after the 2015 general election.

On 23 December, Rajoy tried to reach an agreement with Sánchez that would allow the former to be appointed Prime Minister, but it was met with Sánchez's opposition and preference to study the possibilities of an alternative pact. Both men's personal relationship had begun deteriorating after their campaign "face to face" harsh debate, and worsened further after the meeting, in which Sánchez had allegedly told Rajoy he wanted to know "nothing" of him and his party. Albert Rivera's proposal of an accord between PP, PSOE and C's that promoted "the regeneration policy reforms that Spain needs" and explicitly excluding Podemos from it, went unheeded by Sánchez as well. Sánchez's leadership also faced increasing criticism from within his own party in light of the party's negative election result, as the figure of Susana Díaz grew in prominence and became the leading voice of Sánchez's critics. Díaz was said to be seeking to replace Sánchez as party leader and to eventually lead the PSOE into a new general election, also warning Sánchez that the party's pact policy had to be decided within a federal committee and not by the Secretary-General, in a move seen as disavowing Sánchez's decisions.

The PSOE crisis deepened further when Sánchez suggested delaying the 39th Party Conference—due for February 2016 to renew the party leadership—until a new government was formed or a new election was held. The idea met with strong opposition from critics, who publicly proclaimed that the conference should be held "when it is due" and with several regional leaders demanding discussions on Sánchez's leadership in light of the party's negative election result, the worst in its recent history. Valencian President Ximo Puig said in an interview that "if a new election is held the PSOE must analyze a change of candidate", while Castile-La Mancha President Emiliano García-Page commented that "no one disputes Susana Diaz' abilities to be Prime Minister". On her end-year speech as President of Andalusia, Susana Díaz revealed her national interests and paved the way for the possibility of her turning into the PSOE icon at the national level.

The PP, Podemos and C's all took advantage of the PSOE's worsening internal situation to force Sánchez to the negotiating table. Pablo Iglesias questioned that people within the PSOE "wouldn't allow Pedro be Prime Minister", noting that Sánchez "does not control" the party, and warning of the dangers of a "three-way grand coalition" between PP, PSOE and C's that Podemos would oppose. Rivera pointed out that his party was waiting "for [the PSOE] to solve its internal affairs", while the PP reaffirmed its claim to lead the next Spanish government, seeking a multy-party pact with PSOE and C's. Economy Minister Luis de Guindos suggested during an interview the possibility of a national unity government comprising PP, PSOE and C's. On 5 January 2016, PSOE spokesperson Antonio Hernando announced that the PSOE maintained its "definitive no" to the PP's proposal of a grand coalition. Both PSOE and C's feared that a new election could harm them and benefit both PP and Podemos.

On 30 January, amid discussion between the different party factions on the party congress' date, initially due for February 2016, the PSOE announced it would elect a new leadership through party primaries scheduled to be held on 8 May, with Pedro Sánchez seeking re-election for the post. The party congress to ratify the result of such election was set to be held for 20–22 May.

PP scandals

Meanwhile, as negotiations for the formation of a new government stagnated, corruption scandals kept rocking Rajoy's party, increasing the party's difficulty in obtaining support for the investiture vote. Even before Election Day, it was known to the public that a PP deputy, Pedro Gómez de la Serna, had been paid kickbacks worth millions through a business he shared with another PP member, Spain's ambassador to India, who resigned shortly thereafter. Gómez de la Serna, who was able to get re-elected in the 20 December election, refused to abandon his seat, being subsequently expelled from the PP and into the Congress' Mixed Group.

The PP became the first party to ever be judicially charged in a corruption case—a legal figure passed into law by Rajoy's Cabinet itself in 2015—on 22 January, after being accused of destroying Bárcenas' hard drives in 2013, which allegedly contained information related to the party's illegal funding. The same day, one of Deputy PM Soraya Sáenz de Santamaría's right-hand staff was forced to resign from his post after it was discovered that he had been involved in a case of fraudulent awarding of public contracts.

José Manuel Soria was forced to renounce as caretaker Minister of Industry after he came involved in the Panama papers scandal.

By early February, a massive illegal financing network had been uncovered affecting the PPCV, with dozens of party officials and city councillors indicted or arrested. Judicial investigation also pointed to former long-time Mayor of Valencia and PP icon, Rita Barberá, as a participant in the scandal. The party found itself at risk of losing its municipal group in the city of Valencia—the third largest of Spain, which had seen 24 years of PP rule under Barberá's command—and rumours arising on a refoundation of the party in the region. The PP had been expelled from the local and regional Valencian governments in the elections held throughout 2015 after a two decade-uninterrupted rule. As corruption scandals also spread to Madrid on 11 February, with evidence suggesting that the public work contract kickbacks of 'Operation Punica' could also involve a possible illegal financing of the PP in the region, Esperanza Aguirre, regional party president of Madrid, resigned from her position on 14 February, in a move that was widely interpreted as a broadside against Rajoy, her long-standing party rival.

On 13 April, the Spanish National Police Corps were sent to register Granada's town hall—the 4th largest city of Andalusia and 19th of Spain—after the city mayor and his government, from the PP, had been involved in an urban planning corruption scandal. The case had national impact as the party was already being assailed by corruption cases throughout the country, resulting in the PP expelling all those involved in the scandal. Concurrently on 14 April, the Spanish Treasury fined former Prime Minister José María Aznar for evading tax payments through a society.

Few days later, on 15 April, José Manuel Soria was forced to renounce his post as caretaker Minister of Industry, Energy and Tourism because of his involvement in the Panama Papers scandal, owing to the leaking of information earlier that week revealing that he and his family had maintained several offshore societies on tax havens during the previous decades. Soria initially claimed the falsehood of such claims, but during the ensuing days reports kept leaking that contradicted his initial clarifications. After it was revealed that he had owned one of such societies on Jersey until 2002 during his term as Mayor of Las Palmas, he was put in a critical political position as a result of his confusing and changing explanations on the issue, leading to his renounce.

Formateur Pedro Sánchez (PSOE)

Rajoy's withdrawal

On 12 January 2016, PSOE and C's reached an agreement to elect former Lehendakari Patxi López as new President of the Congress, who required a second round of voting as a result of lacking an absolute majority to be elected in the first ballot. After the PSOE-C's accord was announced, the PP reluctantly withdrew its candidate due to lack of support from other parties, while Podemos proposed Carolina Bescansa for the post, gathering the support of IU. The next week, King Felipe VI started a round of talks with the different political parties in order to nominate a candidate for Prime Minister—a formateur. Rajoy initially announced he would try to pass the investiture vote despite not having the support from any other party aside from his own, while Albert Rivera stated his will to try to mediate between PP and PSOE so that an agreement could be reached.

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Mariano Rajoy announced he was temporarily stepping down from the investiture race on 22 January 2016.

On 22 January, Pablo Iglesias shocked the PSOE by offering a "government of change" headed by Pedro Sánchez, with Iglesias as his deputy and including IU, while also laying out the future's cabinet composition. Sánchez welcomed the proposal but refused to comment on it—not wanting to afford to publicly reject Podemos' offer without taking the blame for the failure in forming a government—and had insisted earlier that day that "times should be respected" and that Rajoy "should have the first shot". The same day, Felipe VI nominated Mariano Rajoy as the first candidate to try to form a new government, but Rajoy surprisingly turned down the mandate by postponing his candidacy for a later date, arguing that he had now "a verified majority against him" after knowing on Iglesias' proposal, and that he would not stand "just to let the times die out".

After Rajoy's refusal, the King announced a new round of talks, with Sánchez being the most likely call. The PSOE, which had intended for Rajoy to go through the failure to be appointed by the Congress and preferred a pact with C's, suddenly found itself forced to either accept or reject Iglesias' offer, which some PSOE high-ranking members regarded as being aimed at "humiliating" and destabilizing them. Pablo Iglesias celebrated the fact that his proposal had caused Rajoy to step back and urged Sánchez to "rise to the challenge". The PSOE, on the other hand, attacked Rajoy and dubbed his decision as "irresponsible" while regarding Podemos' offer as "blackmail". Subsequently, Sánchez also declined to go to an investiture vote until Rajoy made his try or, alternatively, stepped back definitively, though he later added that he would accept the King's request if the PP rejected it again.

On 2 February, after the second round of talks was over, Felipe VI formally tasked Pedro Sánchez with forming a government, which he accepted. Sánchez announced he would try to muster parliamentary support to try to pass the investiture vote, and gave himself a negotiation period of "three weeks to one month". The investiture was set to start on 1 March, with the first ballot—required for the legal two months period to call a new election to start running—being scheduled for 2 March, automatically setting the date of a hypothetical new election for 26 June. Rajoy warned against a possible PSOE–Podemos pact and expressed his wish for Sánchez to fail in his attempt and later attempt a three-way "moderate" alliance with PSOE and C's himself. It was widely reported that the PP heavily favoured going into an early election, and it confirmed that it would vote against any candidate different than Rajoy.

Negotiations

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Pablo Iglesias, Íñigo Errejón and Xavier Domènech, main spokepersons of Podemos and En Comú Podem during negotiations.

Both Podemos and C's expressed their intention to vote against any pact that included each other. Pablo Iglesias asked Sánchez to "not seek impossible pacts with Podemos and Citizens", while Albert Rivera did not rule out the possibility of a PSOE–C's pact. PSOE and C's started negotiations, with the media pointing out that PSOE was interested in reaching an accord with C's in order to try to publicly hold Podemos responsible for the failure in forming an alternative government to Rajoy's. Rivera did not close the door to enter in a PSOE-led government, but conditioned it to seeking an approachment with the PP in order to obtain its abstention in Sánchez's investiture. The difficulty of a PSOE–C's a pact relied in the fact that it could only muster 130 votes, as well as because all three Podemos, Compromís and IU opposed the idea of a government accord between both parties.

On the following days, negotiations between PSOE and minor parties resulted in Canarian Coalition (CC) confirming its affirmative vote for Sánchez, while Republican Left of Catalonia (ERC) and Democracy and Freedom (DiL) announced they would coordinate themselves, together confirming their opposition to a PSOE-led accord unless it recognized Catalonia's sovereignty by allowing a self-determination referendum to be held. The PSOE accepted both parties' stance, as it would not accept their votes either, opposing a referendum. The Basque Nationalist Party (PNV) had already rejected supporting Rajoy, and it conditioned support for Sánchez on a new political status for the Basque Country. Euskal Herria Bildu (EH Bildu) opened a window to "involving itself in the investiture" if there was "a real offer of change". Popular Unity (IU-UPeC) kept negotiating with PSOE, with its leaders expressing their interest in preventing "a right-wing government" as well as in reaching an understanding with other left-wing forces.

On its part, Podemos outlined a detailed government programme to PSOE on 15 February, which included a referendum being held in Catalonia. Sánchez criticized Iglesias for "wanting to negotiate through press conferences", with the PSOE rejecting most of Podemos' document, including the referendum, proposals on deficit reduction, debt restructuring, an increase of public spending by 24,000 million euros a year, an increase in taxes, a constitutional reform through plebiscite, among others. On his part, Iglesias accused the PSOE of seeking a minority government and Podemos' obedience to it, demanding that Sánchez meet him to know what the PSOE wanted to negotiate. Pedro Sánchez answered by stating that he would only meet Pablo Iglesias "to sign an accord". Both Iglesias and Mònica Oltra from Compromís, Podemos' ally, stated that "if the PSOE wants to govern alone, they should openly say so. But Sánchez's government will be a plural one or won't be".

On 18 February, Mariano Rajoy was recorded saying to David Cameron that he expected a fresh election to be held, noting that the most probable outcome of Pedro Sánchez's investiture on 2–4 March would be a failed vote.

The PSOE–C's pact

PSOE and C's signed a government accord on 24 February, to the shock of both PP and Podemos. The alliance, however, did not muster a large enough majority of votes in the Congress, and met with wide opposition from parties both to the left and right.

Through Alberto Garzón's mediation, several meetings were agreed between PSOE, Podemos, Compromís and IU, starting on 22 February. In the meantime, it transpired that, concurrently with those talks, PSOE and C's had secretly met each other and were close to agreeing a pact. The four-way meeting ended without agreement, with the four parties agreeing to meet the next day to renew negotiations. On the late night of 23 February, PSOE and C's were said to have struck a government deal, which they officially confirmed and signed the following day. The signed document, said to be aimed at pleasing the PP in exchange for its abstention in Sánchez's investiture, was revealed to include many points that were contrary to Podemos' election manifesto. As a result, all three Podemos, IU and Compromís broke up negotiations with PSOE on 24 February. Podemos accused the PSOE of "dishonesty", while IU leaders stated their opposition to a deal they perceived as "regressive and contrary to the interests of the popular classes". Concurrently, Rajoy said that "the pact between PSOE and C's is useless", noting the shortage of parliamentary support for the alliance and reiterating that the PP would vote against Sánchez's investiture. Both PP and Podemos postponed any resumption of negotiations with C's and PSOE, respectively, until—at least—after Sánchez's failed investiture. On 26–27 February, the PSOE submitted its accord with C's to its membership vote, which approved it by a wide margin (79%–21%), albeit on a 51.7% turnout. The vote, however, received wide criticism for the question's wording, as it was generic and did not explicitly name either C's or the specific document agreed with them. The result was widely interpreted as an effort from party members to avoid disavowing Sánchez just days ahead of his investiture attempt, rather than a genuine support to the pact with C's.

26–27 February PSOE referendum

Question: "Do you support these accords to form a progressive and reformist government?"
Choice	Votes	%
Y Yes	74,146	78.94
No	19,783	21.06
Valid votes	93,929	97.78
Invalid or blank votes	2,133	2.22
Total votes	96,062	100.00
Registered voters and turnout	185,887	51.68
Source: PSOE (98.22% reporting)

Both signatories soon clashed on the document's interpretation. The PSOE claimed that the pact included the repeal of several controversial laws passed under Rajoy's Cabinet, while C's denied this and argued that the written document did not mention such a repeal but, instead, proposed smaller modifications on specific points. Rivera said that he could not "prevent Pedro Sánchez from saying what the accord doesn't state", while Sánchez accused "those who denied that the accord de facto repealed" those laws of "lying". On the alliance's scope, Rivera had previously explained on 26 February that his compromise was with the signed document and that the deal only specified C's support for Sánchez in the 2–4 March investiture, further stating that the PSOE could not count on his party's 40-seat support beyond it. This came after it had transpired that Mariano Rajoy had sent a letter to Rivera the previous day, with C's willing to explore the possibility of an alternative pact with the PP if Sánchez "crashed". On 29 February, hours before the start of Sánchez's investiture session, the PSOE sent a last-minute offer to Podemos and the other left-wing parties to obtain their support. Podemos, however, rejected the offer and accused the PSOE of sending a "copy-paste" of the PSOE–C's accord with minor modifications, remarking on the PSOE's "lack of seriousness". C's also questioned Sánchez for trying to change their alliance's terms in order to desperately obtain other parties' support, stating that their support was "for the signed deal only" and that "any changes would have to be reviewed so as to see what stance is adopted by the party".

Failed investiture

Pedro Sánchez's investiture session was scheduled to start on 1 March at 16:30 UTC with Sánchez's speech, followed on 2 March by speeches from all other parties' spokespersons and a first round of voting, with a second and final round of voting scheduled, if necessary, for 4 March.

During the hours previous to the session's start, the PNV revealed that they would not support Sánchez, rather deciding on whether to abstain or vote against him after analyzing his speech. After mutual disagreements over the previous weekend on whether the PSOE had answered a PNV offer made the previous week, it was revealed that the PSOE's counter-offer was "so unacceptable"—the precise content of which was not disclosed—that they both had initially agreed to arrange it as if no answer had been received. After Sánchez's speech, the PNV confirmed it would vote "no", pointing to the PSOE–C's pact as an impediment for negotiations. CC, previously expected to support Sánchez, also announced the withdrawal of its support shortly thereafter, opting to abstain on the basis that "there is no credible or viable majority to govern".

In his investiture speech on 1 March, Sánchez outlined his government programme, which was limited to most of the proposals contained in his accord with C's. He asked for Podemos' votes for "a government of change", warning them that voting against him would be akin to voting for Rajoy, while also attacking the PP and thanking Rivera's party for their support. He stated that, even if he did not obtain enough votes for being appointed, he was "proud to have unlocked the political situation". In his rejoinder the next day, in what was reported as "one of his toughest public speeches ever", Mariano Rajoy resorted to sarcasm and aggressive irony and ridiculed the PSOE–C's pact, dubbing it as a "farce". Rajoy also accused Sánchez for "trying to stage a personal promotion campaign" ahead of a new election, after which the engagement turned into a mutual exchange of accusations, with both Rajoy and Sánchez accusing each other of not allowing the formation of a government. The debate also showed PSOE and Podemos delving into their differences, with Pablo Iglesias accusing Sánchez and his party of "betraying the Socialist principles" and of "capitulating" to C's. Albert Rivera, on his part, defended his alliance with the PSOE "despite their mutual differences", in a parliamentary speech that also showed evidence of a major breakup between himself and Rajoy after urging the PP to "have the courage and bravery" to "set aside" Rajoy's era.

First round: 2 March 2016
Absolute majority (176/350) required

Candidate: Pedro Sánchez
Choice		Vote
		Parties	Votes
	Yes	PSOE (89), C's (40), NCa (1)	130 / 350
	NNo	PP (119), Podemos–ECP–Marea (65), ERC (9), DiL (8), PNV (6), Compromís (4), IU–UPeC (2), EHB (2), UPN (2), FAC (1), Ind. (1)	219 / 350
	Abstentions	CC (1)	1 / 350
Source: Historia Electoral

Second round: 4 March 2016
Simple majority required

Candidate: Pedro Sánchez
Choice		Vote
		Parties	Votes
	Yes	PSOE (89), C's (40), CC (1), NCa (1)	131 / 350
	NNo	PP (119), Podemos–ECP–Marea (65), ERC (9), DiL (8), PNV (6), Compromís (4), IU–UPeC (2), EHB (2), UPN (2), FAC (1), Ind. (1)	219 / 350
	Abstentions		0 / 350
Source: Historia Electoral

With 219 deputies voting against and only 131 in favour, Pedro Sánchez's investiture became the first defeat for a candidate to Prime Minister ever, with his candidacy failing to obtain the required majorities in both ballots. PSOE leaders, which had hoped to persuade Podemos into supporting them on the second ballot, gave up on their attempt after the harsh debate between Sánchez and Iglesias and acknowledged Sánchez's certain defeat. They tried, however, for others to abstain on the 4 March vote so as to reduce the large number of no votes, but only managed to have CC vote for Sánchez as a political gesture at the last minute, with no practical effect in the end result.

Subsequent events

Investiture aftermath

The first failed investiture in democracy meant that the clock for new elections started to count. After Sánchez's failure, King Felipe VI opted to delay any new round of talks until a workable majority alternative was presented to him.

Despite this, PSOE and C's showed their willingness to keep their pact alive, announcing that future negotiations would be done with both parties simultaneously on the basis of their agreed document. Both Podemos and IU rejected resuming talks with the PSOE as long as its deal with C's was maintained. Concurrently, voices within the PSOE saw as "nigh to impossible"—or even desirable—any kind of agreement with Podemos, and began readying themselves for the scenario of a new election. Previously, on 5 March, Rajoy had staged what was regarded as a first pre-election rally, asking Sánchez to abstain and let the PP rule "as the most-voted party". Rajoy, however, acknowledged that the PSOE was unwilling to "come to terms" with him and that he had lost C's key support. As a result, commentators started to point out that the PP was also gearing up itself for a new election campaign.

The PSOE threatened to withdraw their support from Podemos-led local councils, to which Iglesias replied that "trying to threaten them is the wrong way to go", reminding the Socialists that they also relied on Podemos' support on several communities. Concurrently, Rajoy announced on 7 March he would call Sánchez "to hold a meeting this week" to restate his idea of a grand coalition, to which Sánchez replied he would attend with Rivera. On 9 March, in part due to C's pressure, the PSOE agreed to hold a meeting with the PP in order to start talks, but announced they would not "negotiate the accord's content with Rajoy". This approach to the PP was, however, a change from the Socialists' previous stance of refusing to negotiate even a PP abstention in a prospective Sánchez investiture. The PP went on to reject the prospect of holding a meeting with both PSOE and C's, refusing to negotiate on the basis of the PSOE–C's pact and seeking for a meeting between party leaders and not between negotiating teams, something which both PSOE and C's rejected.

Podemos and PSOE internal affairs

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Scientist Pablo Echenique was unanimously elected as new Podemos Organization Secretary on 2 April 2016 by the party's national and regional leaderships.

In the meantime, Podemos suffered an internal crisis as a result of several member resignations from several of its regional branches leaderships on 10 March amid various accusations to the party's national leadership. Podemos accused the PSOE of attempting to magnify their crisis to pressure them into avoiding a new election by supporting Sánchez, but the crisis aggravated itself on 15 March after Iglesias dismissed Sergio Pascual, the party's Organization Secretary, and close ally to Íñigo Errejón, the party's second-in-command. Pascual's dismissal was explained by Iglesias as a result of a perceived "lack of neutrality" in his territorial management, but the move forced Errejón out from the public view for several weeks, leading to many to comment that a possible power struggle in Podemos between both Iglesias and Errejón was underway. After scientist Pablo Echenique was unanimously named as Pascual's replacement, and with Errejón reappearing on 29 March to explain that, despite the differences, his allegiance to Podemos' project and Iglesias was total, the crisis seemed to alleviate.

Concurrently, the power strugge within the PSOE developed after Sánchez had lost the political initiative following his two failed investiture votings. Voices within the PSOE sought to delay the party's Federal Congress scheduled for 8 May as Susana Díaz had seemingly confessed to her close aides that she was determined to dispute the party's leadership to Sánchez. However, many party members, including Díaz herself, did not see as desirable to open the issue of the PSOE succession amid negotiations for forming a government and with a new election looming for 26 June. As a result, on 28 March it was decided for the PSOE leadership race to be delayed "indefinitely", "until the formation of a new government".

Failure of three-way talks

As Podemos wanted to avoid being singled out as the main party responsible for triggering new elections, Podemos' leaders adopted a rapprochement and reconciliation strategy with PSOE. After a brief meeting with Sánchez to resume negotiations on 30 March, Iglesias announced that he was willing to give up the post of Deputy Prime Minister in any prospective PSOE–Podemos coalition government in order to ease relations between the two parties. Podemos also accepted a three-way negotiation with C's, although PSOE and Podemos still differed in their visions of the role Rivera's party should take. While Podemos still refused to enter or support any government in which C's was directly involved, they accepted that they could work together on given issues. PSOE, for its part, maintained its wish for a "broad spectrum government" with the support of all three parties, though still without clarifying what kind of government was being sought or if all three parties would be part of it. The three parties agreed to hold a meeting on 7 April to start government formation talks, to which Iglesias would attend himself.

The run up to the three-way meeting was not trouble-free. C's repeatedly threatened PSOE with ending their alliance if they tried to negotiate with Podemos on their own. C's further distanced itself from PSOE after abstaining during a vote in Congress held on 5 April, involving the paralization of the LOMCE, a point which was included within the PSOE–C's pact. Both PSOE and Podemos, among others, had voted favourably to the law's paralization, leading Pablo Iglesias to highlight the similarities between his party and PSOE and comment on the latter's differences with C's. On the day leading up to the meeting, a tough confrontation between Iglesias and Rivera during a Congress plenary showed evidence of tense relations between the two parties. Subsequently, C's also demanded entry into a PSOE-led government—after having repeatedly denied this possibility in the past—and demanded that Podemos support them in return for nothing. Iglesias noted, in reference to C's reaction, that "it is difficult to agree with intolerant people".

After the three-way meeting on 7 April, negotiations came to a standstill. PSOE and C's tried to persuade Podemos to subscribe to their accord, while Podemos made a series of concessions for a joint government with PSOE but not on the basis of the PSOE–C's document. C's stated after the meeting that an agreement with Podemos was "impossible and unworkable", while PSOE said that they would not renounce their alliance with Rivera, pointing to the differences between Podemos and C's as the main obstacle for reaching common ground. The next day, Pablo Iglesias revealed that C's had refused Podemos' concessions, being unwilling to accept anything other than "minor changes" to their accord with PSOE, as well as to any kind of Podemos' involvement within the government. Iglesias said that Sánchez had been effectively "kidnapped" by Rivera's party and was unable to negotiate on his own, announcing that Podemos would put the PSOE–C's pact up to its membership vote on 14–16 April, voicing his opposition to it and placing the responsibility for a new election on PSOE. The next day, during a party rally in Catalonia, Iglesias and Echenique were cheered with shouts of "we don't want a pact!" by party supporters. PSOE discarded any further talks with Podemos on 11 April, based on a "mistrust" of Iglesias and seeing any agreement as impossible.

Grand coalition scenario

In the wake of the three-way negotiation failure, political pundits noted how a PP–PSOE grand coalition was the only option left, despite the high improbability of such a formula. Mariano Rajoy insisted on his proposal of a grand coalition led by himself while rejecting the PSOE–C's accord. Regarding C's involvement in such a prospective coalition, Rajoy noted on the party's arithmetic irrelevance, with contacts between PP and C's having remained cold-tempered following Rivera's alliance with the PSOE and the harsh Rajoy–Rivera parliamentary duel during Sánchez's investiture debate. Sánchez opened himself open to entering talks with the PP after breaking up negotiations with Podemos, but rejected repealing his pact with C's and stated that the PSOE would "never" support a PP-led government. The PP expected the PSOE to "make a move" before talks could start, meaning that they would wait until Sánchez explicitly accepted meeting with them to negotiate a government before making any offer. PP leaders even suggested that Sánchez was not the best PSOE "interlocutor" and called for him to step aside so that another person could negotiate with Rajoy and stop "the recreation, theaters and games". Some sources pointed, however, that Rajoy was willing to have Sánchez as his deputy in a grand coalition scenario. The PSOE answered negatively, stating that "Mr. Rajoy can save for himself any offer, if he had planned in making one".

On its part, C's leaders congratulated themselves for preventing "a populist government in Spain"—in reference to a possible entry of Podemos into any prospective cabinet—with party leader Albert Rivera reiterating on 11 April his idea for "an accord between the main constitutionalist parties". They returned to their previous position of "exploring" a possible pact with the PP. C's did not discard the possibility of supporting a PP candidate different than Rajoy, who was, on Rivera's view, "not able to lead an executive free from corruption and blackmail", commenting on Rajoy's ties to former PP personalities Luis Bárcenas and Rita Barberá—then under investigation for massive fraud and money laundering. Rivera also commented that his pact with the PSOE would be "void" in the event a new election was called for 26 June. It was reported that Rajoy thought that the possibility of a grand coalition would be a feasible outcome after a new election, thinking that the PSOE would not risk going into a third electoral call. This meant that the PP was willing to risk an election on June 26 if they did not achieve a favourable government alliance.

Industry Minister José Manuel Soria's resignation on 15 April as a result of the Panama Papers scandal only aggravated the PP political position—already besieged by corruption scandals—with the party giving up on any possibility of understanding with any other parties as the schism between the PP and all other political actors widened.

Road to a new election

On 12 April, King Felipe VI announced a new and final round of talks for 25–26 April as a last-ditch effort to check whether a candidate was able to muster enough support to be elected. If no candidate emerged from the talks on 26 April, the King would let the deadline of 2 May expire, dissolve the Cortes Generales and call a fresh election for 26 June.

Meanwhile, Podemos' referendum among party members aroused interest as it was seen as critical for any PSOE-led government to be formed before the 2 May deadline. Party leaders expected to use the vote as a way to try to pressure the PSOE into coming to terms with them, but the unexpectedly high turnout in the 14–16 April period attracted media attention as it exceeded the one obtained in the 27 February PSOE referendum and even Podemos' turnout records in similar internal votes. The vote resulted in Podemos' membership massively rejecting the PSOE–C's pact and supporting a PSOE–Podemos–Compromís–IU alliance, as proposed by Podemos' leadership.

14–16 April Podemos referendum

Question 1: "Do you want a government based on the pact between Rivera and Sánchez?"			Question 2: "Do you agree with the proposal for a government of change put forward by Podemos, En Comú and En Marea?"
Choice	Votes	%	Choice	Votes	%
Yes	17,542	11.77	Y Yes	136,291	91.79
N No	131,561	88.23	No	12,184	8.21
Valid votes	149,103	99.77	Valid votes	148,475	99.35
Invalid or blank votes	341	0.23	Invalid or blank votes	969	0.64
Total votes	149,444	100.00	Total votes	149,444	100.00
Active voters and turnout	204,844	72.96	Active voters and turnout	204,844	72.96
Total census and turnout	393,538	37.97	Total census and turnout	393,538	37.97
Source: Podemos

Note: "Total census" refers to the total number of party members called for voting. "Active registered voters" refers to those party members being active in Podemos' webpage throughout the year previous to the vote, but including those within the total census that show any activity up until April 16, 23:59 CET.

Socialist leaders rejected Podemos' referendum outcome and announced they would not break their pact with C's, yet they would not try to reach any agreement with the PP either. Both PSOE and Podemos called for each other to yield to the other's demands to avoid triggering a fresh election. On 21 April, C's leader Albert Rivera called for PP and PSOE leaders to step back and support an independent candidate as Prime Minister. Rajoy replied by suggesting Rivera to "do it first himself"—in reference to him stepping back—while also announcing he would note the King on his own lack of support to be elected while censoring Sánchez for rejecting his offer for a grand coalition. Economy Minister Luis de Guindos was recorded on 22 April saying to Eurogroup president Jeroen Dijsselbloem that a new election was all but certain, with the PP hoping that, even if a similar result to December was obtained, "common sense would prevail" and the PSOE would reluctantly agree to an alliance with them. On 24 April, Rajoy remarked that his party was "ready" for a new electoral campaign and blamed both PSOE and C's for an election repeat, with both "having made [any agreement] impossible".

From 20 April, media outlets reported that Podemos and IU were undergoing negotiations for a joint list aimed at displacing the PSOE to third place ahead of a new election. Juan Carlos Monedero, one of Podemos' founders, proposed that both parties should come together under the "Podemos En Común" formula (Spanish for We Can In Common). Figures from both parties denied that any agreement had been reached and stated that they "would not do anything until [a new election] was sure", yet confirmed that unofficial talks had begun. During a party rally on 24 April, Pablo Iglesias stated that his party was not fearful of an eventual June election, and called for "reaching out" with IU—commenting on the possibility of an alliance between both parties—while attacking both the PSOE–C's pact and the prospects of a PP–PSOE grand coalition.

Deadline

On 25 April, the talks turned into a mere process to certify the failure of negotiations and the triggering of a new election on 26 June—with parties unwilling to come to terms with each other to form a workable coalition. President of the Congress Patxi López had triggered the Cortes' dissolution protocols already from the day the King announced the final round of talks, with the dissolution decree having been prepared since 22 April and setting the convening of the newly-elected Cortes for 20 July.

On 26 April, Compromís made a 30-point offer for a left-wing government with PSOE, Podemos and IU. The PSOE accepted most of the points but turned down the offer for a coalition, suggesting instead a two-year cabinet headed by Sánchez and including independents. Compromís leader Mònica Oltra—one of the main promoters of a Valencian-style inspired coalition agreement—was reported replying to the PSOE counter-offer by saying that "this is insulting", commenting on how the PSOE was trying to buy them into supporting a minority Sánchez cabinet "having just 90 deputies" and despite them offering "a perfectly acceptable pact" to "all parties committed to change". C's ruled out "getting [themselves] into last-hour trouble" and showed opposition to both parties' moves, Rivera commenting on Compromís' proposals that "three pages on governing Spain for four years between six different parties" were "not even worth looking at".

Pedro Sánchez conceded that he "could not and should not submit [himself] for investiture" and acknowledged that Spain was "doomed to a new election", blaming both PP and Podemos for it. Pablo Iglesias said he would have accepted Compromís' offer and that his party "had made enough concessions already", blaming Sánchez for his "unwillingness to negotiate". Rajoy argued that it was "better" to have a new election rather than seeing any of Sánchez's government attempts succeed. Later that day, Patxi López announced that, as a result of the failed round of talks, the King was not tasking any candidate with the formation of a government and, in consequence, the Cortes would be dissolved on 2 May.

On 30 April, C's announced that its accord with the PSOE was "timed out" as a result of a new election being called, and that it "won't be in force anymore" once the Cortes were dissolved. Voices within the PSOE urged the party to "abandon" the accord with C's once it had been proven as fruitless and counterproductive to the party on the eve of a new election call.

With the deadline of 2 May being reached, the 11th Spanish Legislature—the shortest in democracy—came to a close, with the Cortes Generales being dissolved by King Felipe VI the following day.

June 2016 election

Main article: Spanish general election, 2016