Last week, acting Prime Minister Mariano Rajoy, leader of the right-wing Popular Party (PP), failed to be invested as prime minister—raising the possibility of a third election being called in less than a year. Beyond PP votes, he was only able to muster the support of Citizens and the sole deputy from the Canaries Coalition, or 170 in total. The 180 deputies of the Socialist Party (PSOE), Podemos and the Basque and Catalan nationalist parties voted against.

The failure to form a government in Spain has nothing to do with any principled political differences. All the parties are committed to austerity, the European Union (EU) and NATO.

The great unmentionable in Rajoy’s failed investiture is the ruling class’s fear of the workers and its moves to block a politically independent revolutionary movement of the working class. Since the beginning of the global economic crisis in 2008, an unprecedented increase in social inequality has taken place; it is now 14 times the European average, reflecting a vast transfer of wealth from the working class to the rich.

Social gains and concessions workers secured in the 1970s, amid the collapse of the Franco's fascist regime and the transition to bourgeois democracy, have been rolled back.

This is the product of policies pursued by the PSOE government of Jose Luís Rodríguez Zapatero (2008-2011), then Rajoy’s PP government, as well as by nationalist forces in Spain's regional governments. Three labour reforms paved the way for mass redundancies, wage cuts and a vast increase in temporary and part-time working. Article 135, passed by both the PSOE and the PP, enshrined austerity in the Constitution.

The restructuring of class relations in Spain has thrown millions into poverty. Unemployment remains at 20 percent, half among the youth, and hundreds of thousands have migrated in search of work. Some 13 million people, a third of the population, are at risk of poverty.

Meanwhile, Spain’s super-rich have profited out of this imposed misery. The latest data released by the Spanish Tax Agency on Tuesday revealed that 508 people declared assets worth over €30 million in 2014, an 8 percent rise from the previous year. A total of 181,874 people submitted tax statements worth a combined €555 billion.

Workers have responded to worsening conditions with thousands of strikes and protests, but the trade unions have blocked their efforts, isolating one strike after another and functioning as “social partners” with government and business.

Working class support for the PSOE has haemorrhaged. The party suffered its worst electoral defeats in the December and June elections since the first post-Franco elections in 1977. It is riven by a bitter factional dispute between those who support an agreement allowing the PP to rule and those who are attempting to maintain the PSOE as a safety valve for social opposition, however discredited that has become.

This would involve some sort of deal with the pseudo-left Podemos party, which is already in various alliances and coalitions with the PSOE at local and regional levels. Earlier this week, PSOE leader Pedro Sánchez repeated that the PSOE was against Rajoy's reappointment and that he was going to “open up a dialogue with other political parties to search for a solution to the current blockade.”

At the same time, demands have intensified in the press for Sánchez to resign, blaming him for “slamming the door” on an alliance with the PP and provoking new elections. Among the most vehement is the pro-PSOE El Pa í s, which editorialised, “We have repeatedly asked the PSOE abstain in the investiture of Rajoy and allow him to form a government, however little he deserves it. That possibility has vanished by the stubbornness of Sanchez on his journey to nowhere.”

It declared that Sánchez “should have resigned after two consecutive historic defeats” and for leading the PSOE to “irrelevance.”

El Pa í s is pushing for an internal coup within the party with numerous articles, editorials and quotations of leading PSOE officials, including regional leaders and former PMs Zapatero and Felipe Gónzalez. They oppose any agreement with Podemos.

After its creation in 2014, Podemos gained electoral support with demagogic denunciations of the ruling “caste” and corruption. But these were never more than the pleas of upper middle class layers who had failed to profit out of the crisis as well as the “super-rich” had. Since then, it has held round-table discussions with big business, recruited among the top army brass, dropped its verbal opposition to the EU and NATO, and defended Greece's Syriza government, signalling that it too had abandoned its anti-austerity posturing.

The image of anti-establishment Podemos has deteriorated rapidly. After increasing its vote in elections to the point that it was widely expected to eclipse the PSOE as the main opposition party in the June elections, it came grinding to a halt. After allying with the Stalinist-led United Left to create Unidos Podemos, it lost 1.2 million votes, signalling that layers of workers and youth have grown tired of the party and see it as another right-wing, pro-capitalist outfit.

In a recent article in International Viewpoint, Podemos co-founder Josep Maria Antentas, a leader of the Pabloite Anticapitalistas, complained: “voters have seen Podemos say one thing and do the opposite: rejecting left unity and then making an alliance with United Left; saying they would never form a joint government with PSOE, only to then make an offer to do just that; refusing the label ‘left’ and then embracing the label of ‘social democracy’.”

According to Antentas, Podemos’ shift to the right has not finished. There is “a general desire on the part of the Podemos leadership to further moderate the party’s positions in order to increase its governmental and institutional credibility, especially among those potential voters still suspicious of Podemos.”

This article is in fact a damning self-exposure by Antentas of the role of the pseudo-left in creating a Frankenstein monster like Podemos. Were it to come to power, it would threaten workers and youth with the same brutal austerity measures in Spain as Syriza has done in Greece. Local administrations led by Podemos have already shown its class character, reducing public expenditure, persecuting migrants and attacking striking workers.

Despite favourable coverage given to Podemos and its leader, Pablo Iglesias, in some sections of the media, others have reacted with immense hostility—not out of fear of Podemos, but because it is exploiting anti-capitalist sentiments of workers and youth, which can quickly escape its control.

In addition, although Podemos does not support Catalan independence, its call for a referendum is bitterly opposed for threatening the break-up of Spain.

As the European Union begins to break up amid growing inter-imperialist antagonisms, already seen in the Brexit vote, the emergence of separatist tendencies in Spain is seen as a major threat to political stability. Sections of the Spanish army have already declared their intention to intervene in Catalonia if the drive to secession continues.