Spain's leftist parties try to strike last-minute deal

Spain's left-wing parties will hold talks on Tuesday on forming a coalition government, the socialist party said, seeking to resolve a four-month political stalemate hours before repeat national elections become inevitable.

The announcement marked a U-turn by the Socialists as they also prepared for a final round of talks between King Felipe and leaders of the country's four main parties, though chances of avoiding a new election in June still appear slim.

The leader of Spain's anti-austerity party Podemos, Pablo Iglesias, on Tuesday said he had been willing to discuss a potential left-wing coalition but conditions set by the Socialists earlier in the day had made it impossible.

Iglesias did not say which of the conditions he was referring to and said he would be willing to discuss such an alliance if the Socialists changed their stance.

"I would be surprised if it happened," Iglesias said, adding he had no contacts with Socialist leader Pedro Sanchez over the last hours.

The parties have been unable to form a new government since December, when elections ended inconclusively, and unless there is a deal in the coming hours, it will be technically impossible to hold a parliamentary confidence vote to elect a new Prime Minister before a May 2 deadline for formal negotiations.

The Socialists said they were ready to agree on 27 of 30 proposals made by small leftist party Compromis, modelled on a deal it helped broker last year between left-wing forces in the Eastern region of Valencia.

"We believe that there is still time, that it is our duty to try it and we will try it over the next 24 hours," Antonio Hernando, the socialist party's leader in parliament told reporters.

Even if the two parties buried their differences and brought smaller left-wing forces on board, such an alliance would need others such as the second heavyweight newcomer Ciudadanos and Catalan regional parties to abstain in order to pass a confidence vote.

Pre-campaign Mode?

The King already asked parties on Monday to keep the costs of a new political campaign down, a sign he had little hope a viable pact could be found, and some leaders have already acknowledged they lack the support of rivals to secure a parliamentary majority.

Previous attempts by the socialists and Podemos to join forces have failed due to disagreements over fundamental issues including economic policy and the degree of autonomy to grant Catalonia.

In an attempt to break the deadlock, the socialists said they would request only "nuances" to the remaining three Compromis proposals.

Instead of a government formed by the different parties in the coalition, they would offer a socialist-led government formed by independent figures, they said.

They would also ask parties backing the deal to commit to voting the next two annual budget laws to make sure this government had enough stability to vote, and Socialist leader Pedro Sanchez would in exchange commit to a confidence vote in June 2018.

In December's election, which produced the most fragmented result in decades, the centre-right People's Party (PP) of caretaker Prime Minister Mariano Rajoy won 123 seats in the 350-seat lower house of parliament, while the Socialists took 90, Podemos 69 and Ciudadanos 40.