The attempt by Socialist Party (PSOE) leader Pedro Sánchez to form a coalition government with the right-wing Ciudadanos (Citizens) party has collapsed after two no confidence votes in congress last week.

Sánchez’s appeals for “all progressive left-wing forces of change” to join the pact fell on deaf ears. A first attempt by former Popular Party (PP) Prime Minister Mariano Rajoy to form a government in January also failed.

On Wednesday 219 deputies, including 123 from the PP and 69 from the pseudo-left Podemos (We Can) party, voted against Sánchez’s proposal. The PSOE and Ciudadanos only mustered 130 deputies, well below the 176 needed to get a majority in the 350-seat Congress. On Friday, the PSOE-Ciudadanos coalition again failed to form a government, receiving only 131 votes.

The PP opposed the pact, with Rajoy calling Sánchez a “fictitious candidate” who “can only be described as a threat to the interest of Spaniards.”

Podemos leader Pablo Iglesias attacked Sánchez for his “despicable” speech and “capitulation” to the “oligarchy.” Though Podemos had sought to develop an alliance with the PSOE, it would have been harder for it to back Citizens, which it described as a rebranding of the PP.

Negotiations to form a new government will continue until May 3, after which Congress will be dissolved and new elections held on June 26. Until then Rajoy will remain as caretaker prime minister. Polls suggest voting intentions remain broadly the same.

Citizens aims to continue the PP government’s policies, but with an “anti-corruption” gloss. The PSOE-Ciudadanos programme included measures supposedly to combat corruption, while keeping previous labour reforms and introducing new ones to do away with protections still enjoyed by older workers. There would be no further taxes on the rich, and a minimum wage increase of a meagre one percent. Article 135, which prioritizes repayment of the debt over other expenditure and signifies unending austerity, would remain enshrined in the Constitution.

The attempt to form a PSOE-Citizens government reflects the acute political crisis in Spain since the December 20 elections produced a hung parliament. The alternatives to a PSOE-Citizens government were a PSOE-PP grand coalition or a coalition of the PSOE, Podemos and various minor parties—the Stalinist-led United Left (IU) and regional nationalist parties.

Both the PP and the PSOE ruled out a grand coalition, fearing that an unpopular government of Spain’s two traditional ruling parties would totally discredit the political establishment. The recent negotiations between the PSOE and Citizens was a forlorn attempt to operate a grand coalition between social-democratic and right-wing forces.

It echoed comments at a meeting of EU ambassadors to Spain in January by former PSOE Prime Minister Felipe Gonzalez, who called for a PP-Citizens coalition government that would take power thanks to a decision by the PSOE not to vote against it in parliament. Gonzalez dismissed a PSOE-Podemos alliance, saying it “gives little confidence, has little future, and will not go far.” He worried that Podemos would continue to make tactical criticisms of the PSOE, even if the two parties formed a government.

The proposed alliance between the PSOE and Citizens also exposes the Podemos party and its pretense of being different from the established ruling parties. Before the PSOE suddenly attempted to form a government with Citizens, it engaged in extensive discussions of a possible government with Podemos, which itself aggressively wooed the PSOE.

Claims that Spanish political life has been fundamentally transformed by the collapse of the old duopoly between the PSOE and PP, and the emergence of a so-called “four-party” system, are fraudulent. Spain has witnessed the rise of two new parties, Citizens and Podemos. They rail against institutional corruption and the “caste,” reflecting the views of upper middle class layers of entrepreneurs, professionals, and academics who are seeking a greater share of power within the existing state.

Nevertheless, all these parties share a common hostility to the working class and support the framework of war and austerity imposed by the EU. It is on this basis that the parties will continue their negotiations after the failure of the attempt to form a PSOE-Citizens government.

Rajoy has now said he is ready to start negotiations on a three-way alliance between the PP, the PSOE and Citizens, based on their opposition to Catalan independence and commitment to “economic stability” and the European Union.

Podemos Organisation Secretary, Sergio Pascual, said it was time to start rebuilding bridges with the PSOE.

Xavier Domenech, spokesperson of the Podemos alliance in Catalonia, Podem In Comú, said: “There is still the possibility of forming a government of change for the people and government of the future: a national project. We appeal to the PSOE that wants that change.” He repeated the call for a four-way coalition government between PSOE, Podemos, Valencian nationalists Compromís, and IU, whose total of 161 seats was “closer to the 169 of Zapatero [who led a minority PSOE government in 2004-2008] than the 130 for those who received no yesterday”.

Podemos published a 98-page document entitled “Government for Change” in February, whose rhetoric is even further to the right of its initial positions two years ago. Where once Podemos spoke of the need for a “citizens’ audit” to weed out “unjust” portions of the public debt, the aim now is to “restructure the debt” in agreement with the EU and reduce the deficit to the 3 percent demanded by the EU Stability Pact, albeit at a slower place.

In return for carrying out its pro-austerity, pro-capitalist programme, Podemos leaders are demanding their places in the corridor of power. Iglesias wants to become the new deputy prime minister, in charge of the state propaganda machine and the National Intelligence Centre (CNI). Podemos would also have ministries and sub-secretaries of state in proportion to the number of deputies it has in Congress, including a new Ministry of Plurinationality, which would oversee a referendum on independence in the region of Catalonia.

IU spokesperson Alberto Garzon also called on the PSOE to return to four-way negotiations, saying the IU is “not throwing in the towel... We want to avoid early elections.”

Aitor Esteban, spokesperson of the Basque Nationalist Party (PNV), whose support for a PSOE-Podemos- Compromís-IU government would be vital, declared his party’s support for a “left-wing government”, as did Francesc Homs of the Catalan nationalist Democracy and Liberty party.

However, both nationalist leaders demanded something in return. Esteban said, “Sooner or later formulas must be found that allow for Basque home rule.” Homs declared, “You want our support with the document but refuse the possibility of a Catalan or Basque referendum. Is it necessary to deny all possibility of such a thing when you so need our votes?”