By Victoria Waldersee and David Latona
MADRID, Oct 5 (Reuters) - Spain's Prime Minister Pedro Sanchez on Monday called an early election on November 29, seeking to increase his parliamentary support after lawmakers last week rejected proposals to address a housing crisis that has drawn nationwide protests.
The snap vote is a high-stakes gamble for Sanchez, whose Socialist Party trails in nearly every opinion poll. An electoral defeat would spell the end of one of Europe's last remaining left-leaning
governments at a time when the far right is making unprecedented gains across the region.
However, Sanchez, a wily political operator, has proven time and again his ability to surprise those who had long written him off. An election now could see him capitalise on a wave of anger at unaffordable housing in Spain.
"We need to renew people's support," Sanchez said in a televised address. "We need to mobilise and win a much larger progressive majority in parliament, one that will allow us to overcome vested interests, deliver new social advances and continue transforming Spain."
The premier acknowledged he's made mistakes and has fallen short of campaign promises, but vowed to fight for Spain to remain "a bastion of openness, social justice and environmental responsibility".
Spain's blue-chip index was flat after the announcement, while Spanish government bonds were broadly steady.
The main opposition People's Party (PP), which has long urged Sanchez to call early elections, posted a video titled "AT LAST" on X.
"The question I put to voters is whether they want four more years of what we've been living through, or whether they want to give change a chance," PP leader Alberto Nuñez Feijoo said in a televised address.
PROGRESSIVE AND WILY LEADER
Sanchez has stood out globally for taking a strong stance on progressive issues from Palestinian statehood to defending multilateral institutions and cracking down on "tech oligarchs", even as a series of setbacks and scandals weakened his position at home.
The recent protests over housing have given him a rare boost, with proposals that were struck down by right-wing lawmakers on Friday welcomed by protesters.
Polls suggest a coalition led by PP with the support of Vox is the most likely outcome, which would usher in a far-right party into central government for the first time since the return of democracy after the 1975 death of dictator Francisco Franco.
Still, despite never winning enough votes to form a majority government, Sanchez has cobbled together a series of fragile and seemingly impossible coalitions including voices from the far-left to the separatist right to remain in power for three successive terms lasting eight years.
Growing fragmentation among his partners has meant the government has passed little in the way of legislation in its third term and failed to pass a budget since 2023, even as Spain's economy has continued to be one of the best performing in the developed world.
Vox leader Santiago Abascal warned the election result would be unpredictable despite favourable polling for the right.
The decision to call a snap election reflected Sanchez's inability to govern without a stable majority, said Miriam Nogueras, parliamentary spokesperson for the Catalan pro-independence party Junts, which in recent years had stopped voting with the government.
RIVAL OUSTED
Sanchez took office after leading a move to oust centre-right Mariano Rajoy in the wake of major corruption scandals within Rajoy's PP. However, senior members of Sanchez's own Socialists have in the past year faced allegations of graft, dragging down the party's already weak approval rating which has hovered at around 26-31% throughout his tenure.
Against the odds, he won a second four-year term in office in 2023 by negotiating support from a loose alliance of parties in parliament.
That was achieved after promising a highly controversial amnesty for pro-independence Catalan leaders in exchange for their support, a move still bitterly remembered by many voters as a betrayal of Spanish unity.
Sanchez won early plaudits for moves including the exhumation of Franco from a mausoleum the dictator built for himself outside Madrid, and the reform of a labour law that has seen unemployment fall to its lowest level in almost two decades.
He has argued that immigration is essential for sustaining Spanish growth by plugging gaps in key sectors such as construction, agriculture and hospitality and for providing revenue to prop up Spain's strained welfare system.
His refusal to agree to US-led demands to increase defence spending to 5% of GDP while pivoting toward China has angered US President Trump and some European leaders concerned about the threat of the bloc being flooded with Chinese goods.
Sanchez's housing measures provided a rare chance for him to pitch himself as the leader of a mobilised left and distract from the more politically damaging issues of the migrant crisis in Ceuta and corruption scandals, said Lorenzo Bernaldo de Quiros, economist and president of consultancy Freemarket Corporate Intelligence.
"This is a window of opportunity," Bernaldo de Quiros said. "If he does not call elections fast, (those topics) will return to centre stage."
(Reporting by David Latona, Victoria Waldersee, Emma Pinedo and Mireia Merino; Editing by Charlie Devereux, Aislinn Laing, Susan Fenton, Alexandra Hudson)
