Spain's hard left splits before snap election, complicating Sánchez's hold on power

what happened

Spain's hard-left parties presented separate candidate slates on Saturday for the snap general election, after negotiations on a nationwide alliance broke down. The split makes it harder for Prime Minister Pedro Sánchez, a Socialist, to hold onto power while leading a left-wing coalition.

According to TradingView, the country's voting rules penalise small parties that run alone, especially in sparsely populated provinces with few seats. Organisers had hoped to rally left-leaning voters around housing protests and concern over the far right, but the rift may dampen turnout. The dispute centred on the top spots on joint lists in Madrid and Barcelona, the two largest constituencies for the vote on November 29.

The Broad Front, which groups several parties in the current minority government, and Podemos openly feuded over who would lead the lists. Old rivalries between former allies only deepened the conflict. Broad Front leader Ada Colau, the former Barcelona mayor, said: "These past few days have been very difficult ... some people will be disappointed today, and for that I am sorry." Podemos, led by former equality minister Irene Montero, had proposed open primaries, but the Broad Front rejected them as there was too little time. Podemos then struck its own deal with the Republican Left of Catalonia (ERC), which backs Catalan independence.

why it matters

For markets, this is mainly a political story: uncertainty over who will form Spain's next government can weigh on Spanish assets, including the IBEX 35 and sovereign bonds. The result will depend on how the left vote divides, so investors will be watching polls and the campaign closely.

market impact

Spanish assets: rising political uncertainty may weigh on the IBEX 35 and Spanish government bonds

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