Spanish government faces pressure from hard left, throwing budget passage into question

By David Latona

MADRID (Reuters) - Members of Spanish hard-left party Podemos ("We Can") began voting on Tuesday whether to make its crucial support for this year's budget conditional on the government severing ties with Israel and implementing measures to curb rent prices by 40%.

The Socialist-led government of Prime Minister Pedro Sanchez, which relies on a fragile coalition of smaller parties to approve any legislation, needs the votes of the four Podemos lawmakers in the lower house for the budget to pass.

Sanchez faces a delicate balancing act as he also requires support from two centre-right parties - Catalan separatists Junts and Basque regionalists PNV, who are set to impose their own conditions to back the budget.

On Monday, Podemos Secretary General Ione Belarra - who served as Sanchez's social rights minister between 2021 and 2023 but is no longer in the ruling coalition - criticised what she described as the government's inaction in a video message.

Belarra said her party's members should decide whether to demand that the government "immediately break off diplomatic and trade relations with the genocidal state of Israel" in exchange for supporting the budget.

Israel strongly denies its war against Hamas militants in Gaza is an act of genocide against the Palestinian people.

The second condition she named was "tackling the housing crisis by lowering rents by 40% by law, banning the purchase of houses by anyone who's not going to live in them and dismantling squadron commandos", in reference to private companies that mediate in squatting situations to evict occupants.

Spain is struggling to balance promoting tourism, a driver of its economy, and addressing citizens' concerns over unaffordable high rents due to gentrification and landlords shifting to more lucrative tourist rentals, with protests planned across the country this month.

Podemos was the Socialists' junior partner from 2018 to 2023, controlling five ministries through a coalition of leftist parties and initially part of Labour Minister Yolanda Diaz's new leftist platform, Sumar, ahead of the 2023 general election, winning five of Sumar's total of 31 parliamentary seats.

It left the platform in December and moved into opposition after its leaders were excluded from ministerial posts and relegated to a secondary role within Sumar.

Podemos' internal vote runs until Oct. 27 and its result is binding.

(Reporting by David Latona; Editing by Aislinn Laing)