Third Spanish election in sight as Rajoy loses vote

Spain's Acting Prime Minister Mariano Rajoy failed on Friday second time this week to secure a vote of confidence in parliament to form a government, taking his country closer to a possible third election in a year.

After two previous inconclusive elections, Spain has been without a government for eight months now.

Rajoy, leader of the centre-right People's Party (PP), stumbled at the first attempt to win a second term on Wednesday when he fell six short of the 176 votes needed for an absolute majority in the 350-seat assembly.

He couldn't win the required support in parliament on Friday either.

Rajoy's PP and opposition parties now have until October 31 to strike a deal before another election is called automatically.

The country has never tried a coalition government since it adopted democracy after the end of fascist Franco regime in 1975.

Rajoy came to power in 2011 at a difficult time for Spain's economy. He helped the country come back from the brink with unpopular austerity measures. But high unemployment and corruption scandal tainted PP's reputation.

Political uncertainty has started to weigh on Spain's strong three-year economic rebound from a recession.

"Not having a government has a high cost and all of us Spaniards will have to pay," Rajoy's said ahead of the Friday vote.

After Rajoy's failure in both votes, the focus now shifts to regional elections on September 25 in the Basque Country and Galicia. There is unlikely to be any deal before those elections are out of the way, analysts say.

Rajoy's anti-regionalist rhetoric has damaged his standing with Basque and Catalan parties that have traditionally helped support minority governments at a national level. Not one supported him in the parliamentary votes.