Spain's fragile Socialist-led government will likely survive in the short term, but sustained policy paralysis, corruption scandals and public discontent increase the likelihood of early elections that could bring the far right into power, triggering confrontation with Catalonia and the Basque Country, a rollback of progressive laws, heightened social protests and tensions with the European Union. After months of political instability fueled by high-profile corruption scandals in June and July, the August parliamentary recess gave Socialist Prime Minister Pedro Sanchez a brief reprieve. But with political activity resuming in September, the government faces mounting challenges that are likely to reignite instability, policy uncertainty and social discontent. These pressures will sustain a constant risk of political crisis that could trigger early elections, in which the conservative opposition, particularly the far right, is well positioned to perform strongly....
