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Governing Spain, a headache for new PM Pedro Sanchez

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Madrid (AFP)

Spanish Socialist leader Pedro Sanchez heads a minority government supported by a hodgepodge of disparate parties, including far-left Podemos, Catalan separatists and Basque nationalists, which will struggle to govern.

Here are the main challenges facing Sanchez, who became prime minister Friday after a no-confidence vote in parliament ousted Mariano Rajoy, who has governed since 2011:

- Pleasing Brussels and Podemos -

With just 84 deputies in the 350-seat parliament, the Socialists are also a "minority within its coalition" of parties that toppled Rajoy in parliament with 180 votes in favour of the no-confidence motion, top-selling newspaper El Pais observed.

"Governing...with so little support will inevitably generate instability and contribute to deteriorating confidence in institutions," the centre-left daily wrote Friday in an editorial.

Several analysts predict Spain will face early elections within a year. Sanchez will only be able to implement policy initiatives "that allow him to obtain an easy majority" in parliament, such as a reform of an unpopular security law, said Fernando Vallespin, political scientist at the Autonomous University of Madrid.

The Socialist leader promised his "main priority" would be to respect Madrid's deficit reduction commitments to the European Union and to implement the 2018 budget designed by Rajoy's conservative Popular Party government.

This puts him on a collision course with Podemos, whose pony-tailed leader Pablo Iglesias has repeatedly called for greater social spending.

Iglesias wants Sanchez's government to include members of his party, which was born in 2014 out of fatigue with Rajoy's harsh austerity measures imposed during Spain's financial crisis.

To please his ally, Sanchez could reverse a labour marker reform designed by Rajoy in 2012 that makes it easier and less expensive for companies to fire workers, said Vallespin

- Managing Basques and Catalans -

Sanchez's decision to respect the 2018 budget -- which his Socialists had voted against -- was aimed in large part at wooing the Basque Nationalist Party (PNV). Its support had been crucial for the success of the no-confidence vote against Rajoy.

But even with this concession, PNV lawmaker Aitor Esteban warned Sanchez's minority government would be "weak and difficult, complicated."

"This is going to be a constant bing, bang, boom," he added.

Esteban said he hopes Sanchez will maintain its policies towards the "Basque and Catalan nations". The Socialists have traditionally been more open to dialogue than Rajoy's PP to resolve tensions over separatist pushes in Catalonia and the Basque Country.

This stance could prove unpopular for Sanchez, already accused by the right of coming to power with the help of "friends" of recently disbanded Basque separatist group ETA.

When it comes to Catalonia, Sanchez has said he wants to "build bridges" with the region's new separatist government.

"The right-wing opposition will certainly focus its attacks on this point... The Sanchez government will need to be very careful," said political scientist Joan Botella of the Autonomous University of Barcelona.

The hard line adopted by the Socialists in recent months against Catalonia's separatist push should protect them from criticism, he added.

- Nonstop election campaign -

With the prospect of early elections high, there is a risk that a Sanchez government will be seen as running a permanent election campaign, said Vallespin.

"What the Socialist party wants is to lead newscasts every day," he said.

Sanchez will have to be careful not to "lose too much voice in the centre" of the political spectrum.

His success will "depend a great deal on his ability not to fell into the radicalism which Podemos will try to impose on him," Vallespin added.

A Socialist-led government will be "marginally negative for economic policy", said Eurasia Group analyst Federico Santi.

"It would likely result in a slow-down in the fiscal adjustment, introduce the risk of fiscal slippage, put earlier reforms at risk," he added.

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