Spanish PM Mariano Rajoy ousted after failing confidence motion

Spanish PM Mariano Rajoy addressing Congress

Spanish PM Mariano Rajoy addressing Congress

Sanchez seized the opportunity to tap a surge of outrage over a corruption scandal involving Rajoy's People Party to corral Catalan separatists and Basque Nationalists into an unwieldy eight-party coalition that carried his motion. The crimes ranged from fraud and tax evasion to money laundering. More damagingly for Rajoy, the judges questioned the prime minister's credibility when he said in court that he was unaware of the fraudulent accounting.

Spain is the eurozone's No. 4 economy and an influential member of the European Union (EU).

The PNV party was due to make a final decision on whether to continue to back Rajoy during the afternoon, when its leadership holds an extraordinary meeting.

The new leader has committed to a budget passed by Rajoy, and it will be hard to repeal reforms including new labor laws and healthcare and education budget cuts, Reuters said.

All of his allies in the no-confidence motion stressed their vote against Rajoy was not a blank cheque for Sanchez.

Sanchez said at the exit of the Congress of Deputies that he was aware of the responsibility he is assuming and the complex political moment.

A general election is due by mid-2020 and it is not clear whether Sanchez could call a snap vote before that.

The report notes that Rajoy's ouster by parliament is a first for a serving leader in four decades of Spanish democracy.

If the vote goes though, Mr Rajoy will be the first Spanish prime minister to lose a no-confidence vote. Sanchez backed Rajoy on his firm line in defense of the Spanish constitution, which doesn't permit regions to break away.

Qvortrup said the corruption scandal could force a "change of guard" within Rajoy's party and warned that Spain's new leader would struggle to form a government due to opposition within his own party and beyond.

The main party withholding its support was the business-friendly Ciudadanos, led by Albert Rivera - who leads polls as the most popular political leader.

The no-confidence motion made unusual bedfellows of 22 widely divergent parliamentary groups, including anti-establishment left-wing national parties, the political arm of the now-defunct armed Basque separatist group ETA, and regional Catalan nationalist parties hankering to negotiate an independent Catalan republic.

With just 84 lawmakers in the lower house, Sanchez was forced to forge deals with Podemos, Catalan separatists and Basque nationalists to win backing for the motion.

The court sentenced 29 people with links to the PP, including a former treasurer, to jail and ordered the party to pay back 245,000 euros ($290,000) which it received from the scheme to help finance election campaigns.

He also pledged to hold an election soon, while not setting a date. He also said he would reactivate social services and infuse new life into pensions.

The former economics professor regained the Socialists' leadership previous year.

The forming of a Catalan government will automatically end the extraordinary takeover by Spain's central powers of the region as part of its crackdown following a failed declaration of independence by Catalonia in October.

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