Can Spain Break Its Political Deadlock?

Spain's political deadlock was one step closer to breaking on Wednesday as the Socialists (PSOE) signed a deal with new liberal party Ciudadanos.

Since a general election in December failed to produce a conclusive result, Spain has been waiting for a permanent government. The acting Prime Minister Mariano Rajoy, whose center-right People's Party (PP) got the highest vote share but no majority, had said he would not try to form a government, passing the baton to PSOE leader Pedro Sanchez.

Sanchez has now secured a deal to win the support of Ciudadanos leader Albert Rivera. The agreement, comprising more than 200 policies with a particular focus on tackling corruption, constitutional reform and social measures, is a blend of the two parties' programs. Rivera said it contained about 80 percent of his election platform.

The deal promises not to raise income tax on the working and middle classes but suggests a new wealth tax and environmental taxes, according to the Financial Times.

"This is the first step towards the political change that we need in this country," Sanchez said on Wednesday.

Rivera has agreed to vote in favor of Sanchez becoming prime minister, a marked u-turn from his previous vow only to abstain from voting against the PSOE leader in the event of an agreement.

The combined force of the two parties is still not enough to secure a majority, however, meaning that either the PP or the left-wing Podemos party will need to be brought into the fold.

The deal is reportedly designed to potentially appeal to either party, but Podemos has dismissed it out of hand. Iñigo Errejón, the Podemos number two, said the "choice of the PSOE is incompatible with us," El Pais reported.