Pedro Sanchez has once again clinched a vote of confidence in Spain‘s Parliament, securing his position as the Prime Minister for another four-year term. Heading a coalition government with the radical left-wing party Sumar, Sanchez garnered 179 favorable votes, three more than required to maintain his office. Notably, this support extended across various parliamentary factions, encompassing Basque representatives and even receiving backing from the Catalan separatist movement Junts. In return, Sanchez offered amnesty to Junts’ executives, a move that drew criticism from some quarters.
Following this contentious decision, Sanchez’s approval triggered widespread dissent, with thousands protesting against both him and his plan for amnesty over 12 consecutive days. Public sentiment appears largely against granting amnesty to Catalan separatists, with polls revealing that seven out of ten Spaniards oppose this decision.
Despite successfully navigating the parliamentary vote, challenges loom ahead for the 51-year-old leader. While he has secured support from leftist and separatist parties, their significant ideological differences might undermine his tenure this time around. Analysts suggest that passing laws could be an arduous task due to these conflicting ideologies among supporting factions.
Sanchez’s new center-left coalition government is likely to be inaugurated on either Friday or Saturday. The markets responded positively to the vote of confidence, signaling a boost in investor confidence. While the Madrid Stock Exchange might experience a moderate uptick, the noteworthy reaction came from the decline in Spanish government bond yields. The ten-year government bond yield decreased by 5 basis points, outpacing the general trend in the Eurozone bond market, where yields aimed for a reduction of one to two points. With the Spanish decade’s yield hovering around 3.62% compared to Germany’s 2.61%, the margin between the two yields settled at 101 basis points, indicating a favorable market response to Sanchez’s continued leadership.