Spain's next government likely to be unstable

THE ruling right-of-centre People's Party (PP) emerged on Sunday as the largest party in Spain's second general election in six months, but once again short of an overall majority. At a time of post-Brexit referendum market jitters, the vote sets off what could be further protracted coalition talks and political instability.

A dominant story of the election is the shattering of the long-running post-Franco political duopoly of PP and the Spanish Socialist Workers' Party (PSOE) that has dominated the country since the late 1970s. The two "new" parties - the anti-austerity Podemos in coalition with Izquierda Unida (a remnant of former Spanish Communist Party), and the centrist, business friendly Ciudadanos - may now have broken this two-party system for good.

The combined vote of PP and PSOE, which was around 85 per cent of the ballot in the 2008 general election, fell to around 55 per cent on Sunday in a low turnout election.