Budget defeat puts Spain Government on the ropes

Picture: AP Photo/Manu Fernandez.

Catalan separatist and right-wing politicians in the Spanish parliament's lower house have rejected the ruling Socialist government's 2019 budget plan, opening up a new political crisis.

The Spanish prime minister's office said Pedro Sanchez plans to announce on Friday whether he will call an early election, after losing the vote by 191-158, with one abstention.

The Moncloa Palace said Mr Sanchez's decision will be announced after a weekly cabinet meeting.

Two officials in the ruling Socialist party said the best date for an election at the moment is April 28, less than one month before local, regional and European Parliament elections set for May 26.

One of them said that despite losing the budget vote, the Socialist party and the government are still considering "all options".

The only other time that a Spanish government lost a budget vote, in 1995, the Socialists were forced to dissolve the parliament and call an election.

Opposition leader Pablo Casado, head of the conservative People's Party, said Wednesday's vote was "a de facto confidence vote against Pedro Sanchez".

Catalan deputies from pro-independence parties had demanded to open talks on the north-eastern region's self-determination in exchange for supporting Mr Sanchez's spending proposal, but the centre-left minority government had rejected that.

The socialist party holds only 84 seats in the 350-seat lower house.

Spain Prime Minister Pedro Sanchez. Picture: AP Photo/Manu Fernandez.

Its votes and those of the anti-austerity Podemos party were not enough to counter a majority of centre-right, conservative and smaller parties voting in favour of six blanket objections.

Mr Sanchez became prime minister in June when the Catalans joined the anti-austerity Podemos and other smaller parties in backing a no-confidence vote against his conservative predecessor Mariano Rajoy.

Without parliamentary support, Mr Sanchez's government cannot pass significant legislation and would need to prolong Mr Rajoy's 2018 spending plan.

That leaves the centre-left administration without funds for social policies that are key to retaining Podemos's support.

Mr Sanchez rushed out of the lower house's chamber shortly after the vote, dodging questions by reporters.

His finance minister, Maria Jesus Montero, said it made sense that Mr Sanchez's term, which ends next year, would be shortened with the budget rejection - but that it was up to the prime minister himself to decide if and when to call a new general election.

Talks between Mr Sanchez's government and a new separatist coalition that took power in Catalonia after 2017's failed independence push broke down last week when the government refused to accept self-determination talks.

The ongoing trial against a dozen politicians and activists who drove the breakaway attempt in Catalonia two years ago has further angered many pro-independence supporters.

The politically charged trial entered its second day on Wednesday with the Supreme Court prosecutor criticising what he said were defence lawyers' attempts to turn the proceedings into an examination of the Spanish state and judiciary.

Prosecutor Javier Zaragoza called "ridiculous" and "unjustified" the arguments made on Tuesday, the trial's opening day, by defence lawyers who called the case politically motivated and an attempt to eliminate dissent in the troubled north-eastern region.

Twelve Catalan politicians and activists face years behind bars if they are convicted of rebellion or other charges for having pushed ahead with a unilateral independence declaration that opened an unprecedented political crisis in Spain.

-Press Association

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