When Pedro Sanchez became Spain's prime minister in June as part of a minority government, Stratfor predicted that his government would struggle to pass legislation amid constant calls to hold an early election. The government's defeat in a budget vote, along with the imminent prospect of snap polls, confirms that forecast.

What Happened

Spain is getting closer to calling an early general election. On Feb. 13, the Spanish Congress of Deputies rejected Prime Minister Pedro Sanchez's budget plans for 2019, 191-158, with one abstention, meaning a snap election is all but certain. Holding just 84 of 350 seats in the Congress of Deputies, Sanchez's Socialist government has long been rickety, requiring support from other parties, including pro-independence parties from Catalonia, to pass the budget. The Catalan parties, however, voted against Sanchez's budget to protest the start of a trial this week against a dozen secessionist leaders. A spokesperson for the Spanish government said Madrid would make an announcement about its future plans on Feb. 15 amid media speculation that a general election could occur on either April 28 or May 26 (the latter of which would coincide with European Union parliamentary elections).

Why It Matters

The Socialists' trouble comes at a time of political fragmentation. Opinion polls show that Spain's four main political parties, the Socialists, the center-right People's Party, the centrist Ciudadanos and the left-wing Podemos, possess relatively similar levels of political support — entailing that at least two parties would need to join together to form a government. Spanish parties, however, are finding it increasingly difficult to agree on coalitions. An inconclusive general election in December 2015 precipitated another vote just six months later because the parties failed to cobble together a coalition. And with polls suggesting that the fragmentation of the electorate will continue, a similar scenario is in the offing after the next general election. Meanwhile, prolonged political uncertainty could take its toll on the Spanish economy, which is currently posting one of the fastest growth rates in the eurozone.

Considering the probable fragmentation in Spain's next parliament, Vox could become kingmaker in a right-wing coalition government, scuttling the chances of rapprochement between Madrid and Barcelona. Moreover, a central government including Vox could prompt Catalonia's secessionist parties to abandon their current disputes and circle the wagons against a common rival. While Vox's electoral program mostly focuses on domestic issues, it also has Euroskeptic positions, which means that a government that includes the party might experience friction with Brussels.

What Happens Next

In the probable event that the Spanish government announces an early election, Catalonia will play a central role in the campaign, with conservative parties likely to propose a tougher stance on secessionism as center-left and left-wing parties insist on the need for dialogue with Barcelona. Other issues, such as Spain's high levels of unemployment, depressed salaries and the fate of controversial reforms from earlier in the decade (such as labor reform) will also dominate any electoral campaign. And even if Sanchez decides not to call an early election this week, the writing is still on the wall for his government, as it has little chance of limping on until the legislative term ends in July 2020.