Brexit fears raised as Spain goes to the polls for the second time in six months

Britain's decision to leave the European Union prompted Spain's acting Prime Minister Mariano Rajoy to urge voters to stick with "economic stability" in the 26 June election, instead of opting for the radical policies offered Podemos. As the fallout from the Brexit referendum result shook financial markets around the world, including Spain's, Rajoy said that it was "particularly important to transmit a message of institutional and economic stability."

"These aren't moments to fuel or add uncertainties," he said on 24 June, ahead of Spain's 'day of reflection', which sees an end to campaigning and election coverage for 24 hours so voters can consider their options.

Rajoy added that the reverberations from Brexit "could have precipitated Spain into bankruptcy or bailout only a few years ago" but now that was not the case.

It is just six months since the country went to the polls, but voters have been forced to return to the ballot box after the parties failed to form a government.

Once again, neither the Socialist Party nor Rajoy's conservative Popular Party (PP), which have alternated between government and opposition for decades, are expected to secure enough seats in the country's parliament to form a majority government.

A Gesop survey published in El Periodic d'Andorra on 25 June, suggested that that the PP was on track to win just 120 seats in the 350-seat parliament, down from the 123 they won in December. It would be the party's worst result since 1989.

The 137-year-old Socialist Party, led by Pedro Sanchez, were predicted to win just 86, one less than their fellow leftist rivals Podemos, who were forecast to win 87. Podemos, a two-year-old left-wing party founded in the aftermath of protests and corruption led by Pablo Iglesias, won 71 in December while the Socialists won 90.

Failed coalition

Had they formed a coalition in December, their 161 seats would have still been short of the 176 required for a majority, but that gap could have been bridged with support from Basque and Catalan MPs.

Podemos, whose core support comes from well-educated young people shut out of the job market by the economic crisis, put a high price on its support however, demanding among other things, a binding referendum on Catalan independence.

With the blessing of his party's hierarchy, Sanchez began negotations with the centre-right Cuidadanos party, but once again they were unable to reach agreement, allowing Rajoy to stumble on in his position as acting prime minister.

In the run up to the current election, the Socialists remain hesitant to talk of a partnership with Podemos, whose policies of raising taxes on big business, restoring public spending and deferring debt repayment are popular with the electorate, but are dismissed as unrealistic by their rivals.

Mistakes will be made

"We think Podemos will make the same mistakes Syriza made in Greece," Miquel Iceta, the head of the Catalan Socialists, told Australia's ABC News, adding that if they got into power the country "would face bankruptcy very, very early."

"Spain has to go to Brussels and negotiate with the European commission to reduce our debt without strangulating our economic growth," he said. "But we won't be able to do that if we go to Brussels and say we don't comply with the European Commission's regulations. Some of the goals Podemos has are not feasible."

Others, including Albert Rivera, the leader of Cuidadanos, have raised the Brexit to portray Podemos as a threat to Spain's economic recovery. However, their leader Pablo Iglesias played down the link with the British vote, saying that it was wrong to "mix international events in the campaign".

However, he said the vote was a sign of the profound reform the EU needs.

"Nobody would leave a fair and united Europe," he said. "We have to change Europe."