A supporter of the Popular Party carries a Spanish flag as she leaves the party headquarters in Madrid, Sunday, Dec. 20, 2015. A strong showing Sunday by a pair of upstart parties in Spain's general election upended the country's traditional two-party system, with the ruling Popular Party winning the most votes but falling far short of a parliamentary majority and at risk of being booted from power.(AP Photo/Emilio Morenatti)

With all the talk of Thursday’s Brexit referendum in the UK, many are overlooking Sunday’s general election in Spain. Last December’s election threw up a hopelessly divided parliament in which no party could gain enough support to form a government and so they’re trying again.

The almanis crowd currently have a 60% likelihood assigned to a repeat performance with no government being formed and I would say there’s still value in that. The polls are pointing to an even more closely divided parliament this time around. There appears no evidence of any party being willing to accept junior status in any possible coalition. Also, there appears little external pressure on politicians to overcome their mutual animosity and conflicting interests.

For English speakers, The Spain Report provides a valuable line into Spanish political news and debate. In particular, it provides seat projections from the latest polls. None are pointing to a parliament that would be much more likely to produce a government, at least from a mathematical point of view.

But is there much chance that parties might put aside differences this time around in the interest of the country? I have no great insight into the thinking of Spanish politicians but I can see no evidence of a shift in the mutual animosity and divergent interests that exist.

On the left, the Unidos Podemos coalition, the rising force in Spanish politics, poses an existential threat to the established leftists of PSOE while also being the ideological enemies of both PP and Ciudadanos.

Even if PP and Ciudadanos, the two right-of-centre parties, gathered a majority of seats between them, the latter would be unlikely to prop up an administration it sees as fundamentally corrupt.

As far as I can see, there is no particular pressure on the parties to unite either. There are worse things that could happen to a country than it not being allowed to pass any new laws. Spain is in a fairly strong economic position, relatively speaking, growing by 3.4% in the year to March. Unemployment continues to fall and house prices are finally rising again. Doing nothing may not be a bad option.

Belgium spent 589 days with no government in 2010-11, setting a new world record in the process. All this happened through the worst of the Eurozone crisis and with a debt-to-GDP ratio in the region of 100% and rising, roughly where Spain’s is now. Back then, many suggested that the “bond market vigilantes” had no government to attack and so left Belgian bond markets alone.

We may have a similar case with Spain now. It just so happens that the European Commission is expected next month to revisit its plans to impose fines on Spain for missing its budget targets. If there is no government, who will they discipline? Both sides might welcome the opportunity to delay this process still further.

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