Spaniards to overturn 40 years of predictable politics in regional vote

By Julien Toyer VALENCIA (Reuters) - Spaniards are expected to sweep aside 40 years of predictable politics when they vote in regional elections on Sunday and usher in an unstable era of coalition and compromise, likely to curtail the authority of Prime Minister Mariano Rajoy. Rajoy's conservative People's Party and leftist Socialists have alternated in power since the end of dictatorship in the 1970s, with virtually no tradition of coalition government at the national or regional level. But with voters flocking to upstart groups, polls forecast that no party will win enough votes to claim a majority in 12 of the 13 regions voting on Sunday, and most of the 8,000 towns and cities electing municipal governments. In most places at least three political groups will need to coalesce to form a government. In the Barcelona city council, the vote may be split among seven parties. The radical transformation in how Spain is governed at the regional level is a foretaste of more uncertainty in national elections expected in November. Spain's electoral system favors big parties, historically yielding powerful governments with strong majorities. For more than three years, a solid parliamentary majority allowed Rajoy to pass unpopular reforms needed to avoid an international bailout. The PP also now controls 10 of the 13 regions voting on Sunday. But an inconclusive election, requiring the PP to form coalitions to remain in power or enter opposition in many regions, would dilute Rajoy's message that any compromise on his reforms will jeopardize the recovery. For surging upstart parties expected to break through for the first time on Sunday, it is an historic opportunity to make Spanish governments more accountable to the people who elect them. "It's the first time in decades voters will actually have the possibility to change things. It's not only about changing the government, it's about changing our democracy," said Carolina Punset, who is leads the campaign in the eastern region of Valencia for centrists Ciudadanos, one of two main upstart groups. FRAGMENTATION Polls suggest that Ciudadanos ("Citizens") and leftist Podemos ("We can"), which both burst onto the Spanish political scene last year, will confirm their popularity with disgruntled voters, although they do not quite have enough momentum to steal the scene entirely from their more established rivals. "Fragmentation will be huge," said Narciso Michavila, who heads GAD3 polling firm. The PP could win the most overall votes but still lose power or be forced into coalition in regions across the country. "The PP may claim it has won the elections but the key will be what comes next - the pacts and the color of the governments... The PP will suffer," Michavila said. Some forecasters predict that some of Sunday's local elections will be so inconclusive that they will have to be repeated. Such a stalemate is already paralyzing the region of Andalusia, which voted in a new parliament in March that has so far been unable to form a government. Socialist regional head Susana Diaz has said she may call a new election. In an interview, she said the political landscape in her region and across the country was becoming "chaos". ENTRENCHED Spain's two-party system became entrenched for decades because of an electoral system based on local districts that each send a small delegation of lawmakers to the national parliament, allocated proportionally within the district. With only a few seats for each district, the threshold to win any of them is usually too high for small parties, leaving nearly all seats in the hands of the Socialists or the PP. But this time around the new parties will be big enough to take up their share. Podemos and Ciudadanos have flourished since last year on the strength of public anger at traditional politics in a country where, despite Rajoy's boast of economic recovery, unemployment is still 24 percent. Recent corruption cases involving members of both the PP and Socialist parties have also alienated voters. Podemos at one point looked poised to emerge as Spain's biggest party, although it has since lost some steam because of comparisons with Greek ruling party Syriza, which is struggling to keep Athens in the euro. COMPROMISE TRICKY FOR RAJOY The unfamiliar territory of coalition politics will prove particularly tricky for Rajoy, who is leading a robust campaign to convince voters that the economic recovery would be derailed if parties other than the PP are in power. At the local level, the conservatives may need to dilute their message in order to strike deals with other parties. At a rally in Valencia earlier this month, PP members cheered Rajoy when he pledged to create 2 million jobs by 2018. But many were more critical on the sidelines. Rafael Andres, a pensioner who has been a PP activist since 1992, said Spain's prime minister was good at taking care of day-to-day issues but had not articulated a clear vision at the regional or national level. "With him, the PP has lacked bravery and a clear stance, which is what the country and Valencia need," he said. (Editing by Alessandra Galloni and Peter Graff)