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BREAKING NEWS

Spain's government loses budget vote, paving way for snap election

Spain's government loses budget vote, paving way for snap election
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SERGIO PEREZ(Reuters)
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By Belén Carreño and Paul Day

MADRID (Reuters) - Spain's parliament rejected the government's 2019 draft budget on Wednesday, pushing the country to the brink of a national election.

Sources in the government and the Socialist party of Prime Minister Pedro Sanchez told Reuters on Tuesday that he would call a snap election if the draft was rejected, with April 14 or April 28 the most likely dates.

The Socialists hold less than a quarter of the seats in parliament and needed support from smaller regional parties, including the Catalans, to get the budget proposal voted through.

But the Catalan parties, unhappy with the government's refusal to consider or discuss - amongst other issues - an independence referendum for their northeastern region, voted against it, as did the centre-right and the conservatives.

"This shows that the right wing in this country is intent on blocking social progress," Budget Minister Maria Jesus Montero told reporters, in the government's first reaction to the vote.

In all, 191 lawmakers voted against the budget and 158 in favour, with one abstention.

Conservative People's Party leader Pablo Casado called the outcome "a de facto confidence vote against Pedro Sanchez."

Spanish stocks edged lower and Spain's government bond yield spread over safer Germany widened after the vote. Spain's IBEX was the only major euro zone equity index in negative territory.

The political sources said on Wednesday it was not clear yet when the election would be announced.

But they also said Sanchez wanted a ballot as soon as possible to mobilise left-leaning voters following a rally in Madrid on Sunday by three right-wing parties, including the far-right Vox, which has jumped in opinion polls with a rise in anti-Catalan feelings throughout Spain.

The deep divisions between pro-unity Spaniards and secessionists in Catalonia were highlighted on Tuesday with the start of a trial of 12 separatists charged with rebellion following an attempt in October 2017 to secede from Spain.

(Additional reporting by Jesus Aguado; Writing by Ingrid Melander; Editing by John Stonestreet)

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