Halister News

(Bloomberg) -- Growing dissent in Spain’s socialist PSOE opposition party marginally lifts likelihood of a minority government led by the incumbent PP before end-October, Barclays analysts Apolline Menut and Antonio Garcia Pascual write.

• Likelihood slightly higher than 50%; next three days could prove critical, according to a client note today
• If the PSOE Federal Committee votes against party leader Pedro Sanchez’s plans to hold a leadership vote among members and to stay opposed to facilitating the formation of a minority government led by acting PM Rajoy, there may be a vote of confidence in him
  • If rejected, temporary leadership will be put in place and would likely agree with Rajoy’s PP party to form a government with Ciudadanos
  • If majority backs Sanchez’s proposals, there will be a vote on party leadership on October 23; if he wins, avoiding a third national election won’t be easy
  • There’s moderate to low probability the party will be part of any new government
  • If Sanchez loses PSOE leadership, would most likely lead to talks and the formation of a PP-minority government