Spanish party offers way out of political limbo, election still looming

By Emma Pinedo and Ingrid Melander

MADRID (Reuters) - The leader of Spain's center-right Ciudadanos party offered on Monday to break a political deadlock and avoid another election by facilitating Socialist party leader Pedro Sanchez's confirmation as premier if certain conditions are met.

A Socialist party source scoffed at the surprise move by Spain's third-largest party as pre-election maneuvering, however, and analysts largely dismissed it as a way of blaming Sanchez for any repeat election, a scenario that looks increasingly likely.

The Socialists won an election in April without enough seats to govern on their own, illustrating how politics in the euro zone's fourth-largest economy have fragmented with the emergence of new parties.

Sanchez, 47, is the acting premier, but no major policies are going through parliament for lack of a majority and the budget will roll over unless the impasse is resolved.

If the divided parliament does not confirm Sanchez as premier by Sept. 2, a process known as investiture, a new election will be held on Nov. 10 - the fourth in four years - with no guarantee it would be any easier to put a government together afterwards.

Ciudadanos leader Albert Rivera on Monday set out three conditions for his help in breaking the deadlock: the government must pledge not to increase taxes, apply direct rule again in Catalonia if the regional government rejects an upcoming sentence in a separatist trial, and shun a pact with Basque nationalists in Navarra.

In return, he said he has asked the leader of the second-largest PP party, Pablo Casado, to join him in abstaining in any investiture vote, which should be enough for Sanchez to become prime minister.

“We offer a state solution for Spain: we will unblock the investiture if Sanchez accepts three conditions,” Rivera said.

Sanchez avoided specifically agreeing to Ricardo's proposal, but said there was “no real obstacle” because his policies already coincided with Rivera's requests.

Ciudadanos wants a formal commitment in writing from Sanchez, however.

“Now it's Sanchez's turn to make a move,” Ciudadanos said in a statement after the Rivera-Casado meeting late on Monday.

PP sources said the party maintained its opposition to Sanchez but agreed with Ciudadanos on various points.

“The ball remains in Pedro Sanchez's court,” a PP source said.

“ALREADY CAMPAIGNING”

One senior Socialist Party source told Reuters Rivera was just maneuvering ahead of the expected election.

“They are already campaigning,” the source said.

Antonio Barroso, deputy director of research at Teneo political consultants, said that “PP has shown its willingness to join Riveras offer, knowing that Sanchez would refuse it ... Unless the PP and Ciudadanos make an eleventh-hour U-turn, an election will take place on Nov. 10.”

Aware of Spaniards' weariness with elections and horse-trading, parties are eager to deflect blame if a new election has to be held.

“This is to make Sanchez responsible for the repeat (election),” said political analyst Pablo Simon Rivera.

Rivera's proposal came as a surprise because any speculation about a deal over the past months had focused on talks between the Socialists and far-left Unidas Podemos, which both sides said had reached a dead-end.

Opinion polls have shown that both Ciudadanos and Podemos would lose votes in a repeat election, while PP and the Socialists would benefit, if only marginally.

Party leaders will meet King Felipe on Tuesday for consultations in which they are expected to spell out their position on Sanchez becoming premier.

Sanchez will meet with the king last, and it is up to the Socialist leader to say if he will attempt an investiture vote or if the country will head straight to elections.