Spain's ruling party set for tough negotiations after failing to win majority

Partido Popular supporters wave to Spanish Prime Minister Mariano Rajoy on the balcony after his party won the most votes on December 20, 2015 in Madrid, Spain.

Story highlights

  • Sunday's elections saw newcomers challenge decades-long Partido Popular (PP) and Socialist Party rule
  • Spanish PM Rajoy's tough austerity measures helped the economy recover but unemployment remains high
  • PP has also been damaged by corruption allegations

(CNN)Spain's ruling conservative party has walked away with the most seats in the country's general election but fallen short of winning a clear majority.

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Voters came out Sunday to elect representatives to the lower house and senate. Partido Popular (PP), led by Prime Minister Mariano Rajoy, won 123 seats with 28.72% of the vote -- far from the 176 needed for the majority. The Socialist Party (PSOE) followed in second place, claiming 90 seats with 22%.
    Two new emerging parties, Podemos and Ciudadanos, won seats to challenge the dominant two parties in Spain for the first time in decades. The anti-austerity Podemos led by Pablo Iglesias won 69 seats while pro-business Ciudadanos led by Albert Rivera won 40.
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    Rajoy's tough austerity measures have helped the nation recover from economic crisis. The Spanish economy is expected to grow 3.1% this year, about twice the average of the Eurozone. However Spain's unemployment, hovering at 21.1%, is the second highest in the EU after Greece.
    PP has also been damaged by corruption allegations that emerged in October, something Rajoy has staunchly denied.
    Voter turnout was 73%, slightly higher than the previous election in 2011.
    PP now faces the difficult task of forming a coalition government given that it is unable to achieve a majority with its most obvious partner, the center-right Ciudadanos.