Pedro Sanchez on the radio. | Borja Puig de la Bellacasa

Spain's caretaker prime minister, Pedro Sanchez, called an end on Monday to power-sharing talks with the only major political party offering to govern with him, magnifying the risk that Spaniards will be asked to vote again in the autumn.

A repeat election would be the fourth in as many years, a scenario unprecedented in Spain's young democracy and one that has led some experts to declare the political system broken, unable to resolve big problems like budget reform and Catalonia.
Three months after his Socialists won the biggest share of votes in April's general election, Sanchez said talks with left-wing party Podemos were over, accusing its leader Pablo Iglesias of acting in bad faith.

"Mr Iglesias completely closed the door to any type of negotiation, in a unilateral rupture of the talks," Sanchez told SER radio station, adding he thought the two parties' policy differences were anyway too large to accommodate a coalition.

Sanchez does not want to enter into a full power-sharing coalition with Iglesias, offering to accept Podemos-nominated technocrats in his cabinet rather than Podemos' own lawmakers -- a proposal Iglesias last week described as «idiotic».

A top Podemos official denied on Monday that the talks were dead, however, and said he was confident Sanchez would come around and ultimately agree to a coalition.

"We were surprised to hear that the prime minister said that negotiations had collapsed. For our part, this is not the case," Pablo Echenique told laSexta TV.
Sanchez, whose Socialists are 53 seats short of an outright majority in parliament, has until July 25 to put together enough support to survive a parliamentary confidence vote. If he fails, the constitution allows for two more months of talks.
Failing that, repeat elections would be held in November.

November election?
Senior party officials from across the political spectrum say it is difficult to gauge how much of the stalemate is bluff and that a compromise, seemingly unlikely, could yet be found as public pressure builds on parties to avoid an election re-run.

But Spain's 42-year-old democracy has no history of coalition governments and is accustomed to a winner-takes-all approach born out of a two-party system which only began to fracture after the global financial crisis a decade ago.

That inability to compromise led to a repeat election in June 2016, six months after voters delivered no outright winner and total stalemate. The re-run, also inconclusive, led to a minority conservative government which fell in parliament two years later to a censure vote, replaced by Sanchez's Socialists.

"Rather than have an unstable government for one year, we'd better call elections now in November," said a senior Socialist party official.

Spain now boasts five significant parties, ranging from Podemos on the far left through to Vox on the nationalist right.

Sanchez has said his preferred option is to govern in minority, but he would need another big party to abstain on issues key to survival, such as budgets.
Iglesias wants a share of power, demanding he become Sanchez's deputy in order to support him.

Sanchez is also looking at other options.

Last week, a group of Socialist lawmakers sent a letter, seen by Reuters, to the parliament's second-largest party, the conservative People's Party (PP), inviting it to abstain in order to allow Sanchez to rule with a minority administration.

But the PP rejected this. "We will not allow Sanchez to become prime minister, either actively or passively," PP general secretary Teodoro Garcia Egea told a news conference on Monday.

In theory, Sanchez could also turn to right-wing Ciudadanos but relations there are chilly.
The leader of Ciudadanos, Albert Rivera, who considers the Socialists too weak in their opposition to Catalan independence, has refused to even sit with Sanchez.

Economists say years of political gridlock and repeat elections have prevented Spain from going ahead quickly with important reforms and has stymied the budget process.
There have been no fiscal reforms since 2015, when then-prime minister Mariano Rajoy's majority PP government framed the 2016 budget. After that, budgets were rolled over or approved late for just half a year.

Spain's economy has grown briskly nevertheless, but experts say it could lose momentum without structural reforms such as debt reduction and changes to the labour market and education.

"We are concerned about this five-year stalemate on structural reforms," said Alicia Coronil, chief economist at Circulo de Empresarios, a Spanish business lobby.