Left-wing alliance changes Spain's political landscape

Significance

While not expected to win, it will likely overtake the Socialist Party (PSOE). This development will have serious consequences for the PSOE, which faces a dilemma over its coalition preferences and the prospect of long-term decline.

Impacts

• A strong performance by Unidos Podemos will fuel market concerns about the eventual election of a radical anti-austerity government.
• The prospect of a weak government, unable to meet the targets of the EU Stability and Growth Pact, will cause international unease.
• Both Rajoy and PSOE leader Pedro Sanchez may be replaced by their parties after the election, adding to uncertainty.