Spain’s Socialist government is widely expected to call a snap general election after failing to get its budget through parliament.
Prime Minister Pedro Sánchez’s bill failed after parties from the Catalonia region refused to support it.
Their requests for discussions about the region’s right to self-determination had been refused.
Before the vote, government sources had warned that a defeat would result in an early election.
In the end, 191 out of the parliament’s 350 members voted to reject the government’s budget.
Mr Sánchez left the room without making any announcement or comment. some of his political opponents, however, called for fresh elections in media interviews.
Catalan parties rejected the proposals in the same week that Catalan separatist leaders went on trial for rebellion and sedition over their unrecognised independence referendum in 2017.
Mr Sánchez leads a minority government, with less than a quarter of the seats in parliament.
He became prime minister after his predecessor, Mariano Rajoy, was pushed out in a no-confidence vote over a corruption scandal. But Mr Sánchez’s nomination was supported by a range of smaller parties with competing interests.
If he calls a general election, it will be the third in five years.
Why did Catalans pull their support?
Catalan pro-independence parties had supported the government’s previous legislation while insisting on a dialogue over independence for their region as the price for supporting the budget.
The parties which Mr Sánchez needed to support him said they were open to negotiations so long as the Spanish government considered Catalonia’s right to self-determination.
But the government’s stance remains that, according to the country’s constitution, the nation is “indissoluble”, and no part of it can secede from the whole.
That argument came to the fore when the 12 Catalan pro-independence leaders and activists went on trial on Tuesday.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.