Spain's Podemos demands bigger government role to back Sanchez as PM

By Belén Carreño and Emma Pinedo

MADRID (Reuters) - Spain's far-left Podemos on Monday demanded higher profile government posts, upping the ante on the eve of Socialist Pedro Sanchez's confirmation vote as prime minister after politicians from both sides had said a deal was within reach.

Almost three months after an inconclusive national election left the Socialists as the biggest party but short of a majority, parliament began a week of debates and voting that will determine whether Sanchez has the support he needs from lawmakers to be confirmed as Spain's leader.

He is unlikely to win the first vote, due around 1600 GMT on Tuesday, which would require an absolute majority. But approval in a second vote on Thursday, requiring a simple majority, is within his grasp if the Socialists and Podemos can reach a deal.

However, Podemos was still not satisfied with the latest Socialist offer of unspecified minor cabinet posts.

"Respect our voters and do not offer to us being a mere decoration in your government, because we will not accept it," leader Pablo Iglesias said, after talks between the parties ended without an agreement.

He said, however, his party wanted to be in the government and would negotiate further. Opposition leaders from the right are already speaking of a leftist coalition as a done deal.

Smiles earlier in the day gave way to private expressions of concern among lawmakers and party insiders after the sometimes tense exchanges between Sanchez and Iglesias in parliament.

Sanchez earlier outlined plans for a leftist government that would focus on jobs, women's rights and the environment.

"What unites us is the promise of the left, of environmentally sustainable progress and the fair distribution of this progress," he said, signaling a deal with Podemos was close, before later saying talks were nevertheless difficult.

Even combined, the Socialists and Podemos are short of a parliamentary majority, meaning they will need the support of smaller regional parties to govern in an increasingly fragmented political landscape.

Spain has been in political limbo since the April 28 vote, and until a few days ago a repeat election had seemed increasingly likely as negotiations between the Socialists and Podemos foundered, while the right rejected Sanchez calls to at least abstain in the confirmation vote.

But concessions last week by Sanchez and Podemos had left party insiders hopeful that a deal to form what would be the first coalition government in Spain's recent history would emerge this week.

"There are no more excuses not to strike a deal. Voters would not understand it," said one Podemos deputy who spoke on condition of anonymity given that coalition talks were under way.

CATALONIA QUESTION

Sanchez became prime minister of a minority government in June last year when parliament voted out a conservative administration over a corruption scandal. Since April, his margin for maneuver has shrunk further.

Last week he dropped his opposition to forming a coalition government, while Iglesias - who supports a referendum on Catalan independence while Sanchez does not - agreed to not to seek a role in cabinet, as Sanchez had demanded.

The Catalonia theme was notably absent from Sanchez's speech, for which he was criticized by most parties.

Given the tricky parliamentary arithmetic and the difficulties faced by the Socialists and Podemos striking a deal, right-wing parties raised questions over the longevity of any new leftist coalition.

"With the radicals' backing you can be confirmed, but you cannot govern," conservative People Party leader Pablo Casado said. "After (the vote) you will have a lot of creditors at your doorstep."

Sanchez said jobs, the sustainability of the pension system and education - spending on which should rise to 5 percent from about 4 percent now - were priorities, and that he wanted to make sure global technology companies paid taxes in Spain.

Much of this was included in a draft 2019 budget that parliament voted down after pro-independence Catalan lawmakers withdrew their support for Sanchez, triggering April's election.

(Reporting by Belen Carreno, Emma Pinedo, Paul Day, Elena Rodriguez, Sarah Dagher; Writing by Ingrid Melander and Andrei Khalip; Editing by John Stonestreet and Alison Williams)