Spain's King gave a mandate on Thursday for acting Prime Minister Mariano Rajoy to form a government. Accepting it, Rajoy warned he might fail and left open the date for a potential confidence vote in parliament.
Rajoy said he would now open a round of talks with other parties to try to convince them to vote for his conservative People's Party (PP). He would work to get the support he needs - a challenge as most other parties refuse to back him.
Most of parties declined to support plans for a conservative-led government in talks with the King on Thursday and earlier this week. It leaves the PP with just 137 votes in parliament when 176 are needed to secure a majority.
"We want to change Rajoy's government and this is why we will vote 'no' in a confidence vote," Socialist leader Pedro Sanchez told journalists.
For seven months the country didn’t have a fully-functioning government, a very inconvenient situation at a time as it needs to take urgent steps to reduce its deficit as well as address a growing separatist movement in the Catalonia region.
"Spain needs a government now, this government should be headed by the PP and there is no alternative to this," Rajoy told a news conference after meeting with King Felipe.
"I will try to form this government but not everything depends on me."
As neither party gains a majority in national elections in December and June, Mr Rajoy needs to form a minority or coalition government which must pass a vote of confidence in parliament.
The situation is also heated by the fact that next year's budget must be passed in time for an EU deadline in October.