[2] There was speculation around four outcomes:[2] As a result of the arithmetical infeasibility of an alliance with C's, Rajoy intended for reaching out to the PSOE to at least secure their abstention in his investiture, even suggesting giving them out some additional posts in the Congress bureau.

[8] Podemos leader Pablo Iglesias laid out stiff terms in order to consider starting negotiations with any party, including the protection of rights within the Constitution, electoral reform, the introduction of recall elections and a new territorial agreement that recognized Spain as a plurinational state and allowed for the recognition of a self-determination referendum in Catalonia.

Several regional PSOE leaders rallied around Andalusian president Susana Díaz and warned Sánchez against any agreement with Podemos, seeing the conditions put forward by Pablo Iglesias in the election aftermath as "unaffordable".

[38] Gómez de la Serna, who was re-elected as deputy in the 20 December election, refused to vacate his seat, resulting in him being expelled from the PP and forced into the Mixed Group in Congress.

[40][41] The same day, a member of deputy prime minister Soraya Sáenz de Santamaría's staff was forced to resign from office after it the unveiling of his involvement in a case of fraudulent awarding of public contracts.

[46] On 11 February, evidence suggesting that the kickbacks-for-contracts scheme of the Púnica scandal could also involve an illegal financing of the Madrilenian PP led to the resignation of party's regional leader Esperanza Aguirre three days later.

[51] Finally on 15 April, interim industry minister José Manuel Soria was found to be involved in the Panama Papers scandal, owing to the leaking of information earlier that week revealing that he and his family had maintained several offshore societies on tax havens during the previous decades.

After it was revealed that he had owned one of such societies on Jersey until 2002 during his term as mayor of Las Palmas, he was put in a critical political position over his confusing and changing explanations on the issue, which ultimately led to his renounce.

[59] As the round of talks drew to a close on 22 January, Iglesias made a surprise announcement by offering Sánchez to form a coalition government with himself as his deputy, while also laying out a proposal for the future's cabinet composition.

[63] Upon knowing of Iglesias's offer to Sánchez, Rajoy turned down Felipe VI's nomination as candidate on the grounds that there was now "a verified majority against him", arguing that he would not be running "just to let the times die out".

[103] During a European summit on 18 February, Rajoy was recorded telling British prime minister David Cameron that he expected the government formation process to result in a fresh election, noting that he thought that Sánchez would probably lose the vote on 2–4 March.

[163] Previously on 5 March, Rajoy had staged what was regarded as his first pre-election rally, asking Sánchez to abstain and let his party govern "as the most-voted one", but acknowledging that the PSOE was unwilling to "come to terms" with him and that he had lost the key support from C's.

[176][177] After physicist Pablo Echenique was appointed as Pascual's replacement on 2 April,[178] and with Errejón reappearing on 29 March to explain that—despite existing differences—his allegiance to Podemos's project and Iglesias was total, the crisis seemed to alleviate.

[180] As party members—including Díaz herself—did not see it as desirable to open the issue of succession amid ongoing inter-party negotiations and with a new election looming for 26 June, as decision was taken on 2 April to indefinitely delay the leadership race "until the formation of a new government".

[181][182] Podemos sought to avoid being singled out as responsible for the triggering of a new election by adopting a strategy of rapprochement and reconciliation with the PSOE, with a brief meeting with Sánchez on 30 March leading Iglesias to announce that he was willing to give up the post of deputy prime minister in any prospective PSOE–Podemos coalition government as a way to ease relations between the two parties.

[209] C's leaders congratulated themselves for "having thwarted a populist government in Spain"—in reference to Podemos's presence within any prospective cabinet—with Albert Rivera reiterating his idea of "an alliance between the main constitutionalist parties".

[222][223] On 22 April, economy minister Luis de Guindos was recorded as saying to Eurogroup president Jeroen Dijsselbloem that a new election was all but certain, with the PP hoping that a similar result to December would see "common sense" prevailing and the PSOE reluctantly agreeing to an alliance with them after the summer.

[228][229] On 26 April, Compromís made a last-ditch effort to force left-wing parties into coming to terms, sending PSOE, Podemos and IU a proposal comprising 30-condition agreement "reviewable every six months".

[251] The PSOE ruled out trying to lead government negotiations again and rejected an invitation from Unidos Podemos to do so,[252] with some members instead favouring the party to abstain in Rajoy's investiture in exchange of a series of conditions, with the ultimate goal of preventing a third election in a row.

[253] Among those supporting this was former prime minister Felipe González, who nonetheless rejected a grand coalition between both parties and stated that the PSOE had to "take its place as a responsible opposition" and focus on "rebuilding its own project as an alternative".

[254] The PSOE leadership disregarding González's statements stated that the party's stance would be to vote against Rajoy's investiture,[255] despite the PP having offered to reach a "minimum deal" to unlock the situation rather than a full-fledged accord.

CCa did not rule out supporting a Rajoy-led cabinet,[257][258] whereas the PNV demanded a number of conditions such as further devolution for the Basque Country, the recognition of Spain's national diversity and the rehabilitation and reintegration of ETA prisoners, moves which would have meant drastic changes in PP policy.

[269] On 18 July, PP and C's reached an agreement for electing the Congress bureau and having Patxi López replaced by development minister Ana Pastor as the Speaker, whereas Unidos Podemos planned to have En Comú Podem's spokesperson Xavier Domènech run for the post.

[296] The PP–C's accord contained 150 programmatic measures to be applied on the condition that Rajoy was re-elected as prime minister, which included a number of social measures (such as the equalization and extension of parental leaves, a guaranteed salary commitment for families with lower incomes, increased spending on Education, Health and Dependency and a €5.68 billion plan against child poverty); recovery of lost money through the 2012 fiscal amnesty by raising the tax payment from the final 3% to the initially scheduled 10%—resulting in a predicted gain worth €2.8 billion; a new labour reform providing for three types of contracts (one indefinite, one "of increasing protection" for coverage of fixed-term jobs and another for employees "in training"); depoliticization of the judiciary through the direct election of 12 out of 20 members in the CGPJ by judges and magistrates; reduction of spending for provincial deputations and the Senate; an unspecified reform of the electoral municipal law to directly elect mayors; a number of compromises on taxes (such as not raising PIT, a lowering of culture VAT limited to live entertainment, a reform of the corporate tax to remove deductions to large companies and removal of the 'Sun Tax', applied to systems that used batteries to store the sun's power).

[307][308] In a reversal of the roles in Sánchez's failed investiture in March, the PSOE leader wanted to convey a harsh stance to Rajoy's election by assuring he would never allow it to happen, without clarifying whether he would try to explore an alternative himself.

[322] After the failed investiture, the parties refrained from any new negotiation attempts until after the Basque and Galician elections scheduled for 25 September, with the King not holding any new round of talks until after that date in order to avoid interfering with the electoral campaigns.

[342] Susana Díaz criticized Sánchez's record and accused him of seeking a congress "out of personal interest", offering herself to unite the party and hold a leadership election "in due course" once the political deadlock in Spain had been resolved.

[351][352] With the rebel faction taking over the party, political relations with Podemos were expected to strain, as Sánchez's critics had considered an abstention in a potential forthcoming vote on Rajoy's investiture as the only way out of the deadlock and to avoid a third general election in a row.

[353] Concurrently, the party's fracture shutted down any possibility of an alternative government to the PP's one being formed,[354] and left it at the mercy of Mariano Rajoy, who subsequently began to push for conditions himself in exchange for avoiding a third election which the PSOE could not afford in its current state.

[384][385] Antonio Hernando, PSOE's spokesperson in Congress, justified their abstention by citing the country's need for a government after months of deadlock, but reiterating that his party still did not trust Rajoy and promising to provide a strong opposition to his policies regardless.