Spanish voters return to mainstream parties in fresh polls
Mainstream parties in Spain looked set last night to defy the opinion polls and achieve a narrow victory following Sunday's general election.
Early results put the ruling conservative Popular Party (PP) in first place, with 31pc of the vote and 132 seats, followed by the opposition Socialist party with 24pc and 96 seats.
The anti-austerity Podemos party, which had been predicted to make sweeping gains, looked set to come third, with 21pc and 74 seats. Some polls had suggested that Podemos would come a strong second.
The vote was Spain's second election in six months after an inconclusive contest in December had failed to produce a viable coalition.
Mariano Rajoy, the prime minister from the PP, wants to form a grand coalition including the Socialist party and the centrist Ciudadanos party - although the leadership of the latter faction has already ruled this option out.
Mr Rajoy looked unlikely to come near a majority last night; whether he could put together a viable coalition remained to be seen.
Podemos has joined forces with the communist-dominated United Left to lead the new electoral coalition, Unidos Podemos.
However, the early results suggested that the coalition's hopes of overtaking the Socialist party as the main left-wing grouping had been dashed.
Mr Rajoy has used the threat of a European crisis caused by Britain's decision to leave the EU to win over voters, warning that Spain was in no position to try out "experiments".
Over 12pc was wiped off Spain's Ibex 35 blue-chip stock index on Friday after the British referendum result, making it the worst single day in the exchange's history.
Even if the PP is again the winner - as the first results suggest - Mr Rajoy, whose party has been mired in financial scandals, cannot guarantee stability for Spain, as all the other party leaders have said that they will not accept him as prime minister.
Whether the new balance of parliamentary seats will allow them to maintain that position is another question.
Spain has returned to economic expansion but unemployment remains stubbornly high at 21pc.
Podemos, set up only two years ago, promised to spend €60bn over the next four years, including on health, education, renewable energy and a guaranteed income for the poor.