Being the persistent optimist, I try to look on the bright side of things. Today, lets investigate the “positive side of negativity” as pertains to Spain.

In the wake of fragmented Spanish elections that left no political party or coalition with an outright majority, the Socialists Rejected a Deal with Spanish PM.

The arduous task of assembling a new government for Spain got off to a bad start on Wednesday after the leader of the Socialist party flatly ruled out any deal with the Popular party of prime minister Mariano Rajoy.

[Mish: Facing reality is a positive, not negative event. If new elections are coming, as seem likely, it’s best to admit that now, rather than give false hope to something that cannot possibly work. In this light, rejection of something that cannot work is a good thing.]

Pedro Sánchez, the leader of the Socialists, held a brief meeting with Mr Rajoy in the prime ministerial compound outside Madrid — but apparently only to reiterate his opposition to any accord.

“We will vote against the Popular party and against Mariano Rajoy as prime minister. Voters have asked for change,” he told a news conference after the meeting.

[Mish: Change is good. Voters asked for a change. So why shouldn’t they get change?]

Officials close to Mr Rajoy signalled their disappointment with the Socialists’ stance but declined to read the rejection as final. “It was not the best of starts but it was the start of the process, not the end,” Fernando Martinez Maíllo, one of the PP’s deputy leaders, said.

[Mish: Note the denial by Rajoy. That’s a bad thing. It’s best to get rid of bad things. I am optimistic that Rajoy won’t last.]

Rajoy accused Mr Sánchez of arriving at the meeting “carrying a No in front of him” and for “not having a positive attitude”. Echoing earlier statements by Mr Rajoy himself, Mr Martínez Maíllo urged the centre-left to commit to a stable government for Spain and to show “responsibility”.

[Mish: Sánchez remains absolutely positive he will not work with Rajoy. I see positives in this outcome except from the self-serving point of view of a corrupt politician hoping to cling to power.]

Mr Rajoy and his Socialist counterpart are not known to have a good personal relationship. The two clashed bitterly in a televised debate shortly before the elections, with Mr Sánchez describing his opponent as “indecent” and Mr Rajoy castigating his opponent as “mean” and “miserable”.

[Mish: Please look on the bright side. The mudslinging from both sides was likely accurate each way. Moreover, it provided much-needed entertainment value just as Donald Trump provides in the US.]

But the PSOE has little chance of leading a government alliance itself, especially since it is unlikely it could win over Podemos for such a deal. An early election is also undesirable, given the apparent resurgence of its upstart competitor on the left.

[Mish: The Financial Times is looking on the dark side of things. An early election could also lead to a stable outcome instead of an impossibly fragmented coalition that cannot last. Why assume the worst?]

At the same time, there is growing clamour from Spain’s business and media establishment for some kind of three-way alliance between the PP, the PSOE and Ciudadanos.

Albert Rivera, the leader of Ciudadanos, also threw his weight behind such a link-up on Wednesday, pointing in particular to the risk posed by the Catalan independence movement. Spain, he said, needed a pact between the three parties “to guarantee the unity of Spain”.

Mr Rajoy has invited Mr Rivera as well as Pablo Iglesias, the Podemos leader, for talks next Monday.

[Mish: Should the talks fail, accentuate the positives.]

Accentuate the Positives

  1. Rajoy will be gone. 72% of voters wanted someone else!
  2. A splintered coalition would have failed anyway.
  3. Catalonia deserves the chance to self-govern if it so desires.
  4. Talk of Spanish exit from the eurozone will be back in play.

    Of course, if PP were to win the next election, Rajoy would be back in office, with points 1-4 negated. Some would view that as positive, others negative.

    Positivity is in the eyes of the beholder.

    Mike “Mish” Shedlock