On Tuesday 26 April, it has become clear new parliamentary elections will be held, following the decision of King Felipe VI to not nominate a potential Prime Minister. The move comes after several failed attempts to form a coalition by Spain's political parties. The formation of a coalition government has been attempted since the historical parliamentary elections of 20 December last year, during which the two-party system was broken, as new political parties such as the left-wing populist Podemos had entered the stage, as well as the liberal Ciudadanos. New elections will most likely be organized now on 26 June 2016.

Several attempts were made to form a coalition, such as a grand coalition between the conservative People’s Party (PP) and the Spanish Socialist Workers’ Party (PSOE) as well as a broader coalition of the PSOE together with Ciudadanos and Podemos, which all failed. Recent polls indicate a new vote could lead to a similar result, providing uncertainty whether the new elections will solve the political stalemate. A potential game-changer could be the fact that Podemos and Popular Unity, another socialist party that has a longer history in Spain, could take part in the elections as one party. This would increase the chance of the party becoming the biggest or second biggest party.

The elections took place in Spain, as it is still struggling to recover from the Euro crisis. About a half of the young people are still unemployed and the general unemployment level is still over 20%. While economic unemployment levels are dropping now, and Spain is experiencing economic growth again, further political instability could potentially threaten the economic recovery. On the other hand, it has broken the dominant two-party system, giving people more choice when it comes to voting.

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For economic facts and figures on the economy of Spain, click here and here.