His Socialist party won 123 seats in early polls in April, the most of any party, but still fell far short of an absolute majority in the 350-seat assembly.
After weeks of stalled talks with different parties to get backing to be sworn in for another term, last week Sanchez upped the pressure by setting July 23rd as the date for a first confidence vote in parliament on his candidacy.
But this pressure has not had led the Socialists' desired allies, far-left party Podemos, to back down from a demand to be part of a ruling coalition, a condition Sanchez has refused.
During an interview with radio Cadena Ser, Sanchez said thatPodemos leader Pablo Iglesias has “unilaterally broken” talks as he has called for a vote by party members on that same day on whether to back the Socialists.
It is “a big smokescreen on the part of Iglesias to justify refusing my investiture”, Sanchez said.
Podemos is insisting that its members figure in the new cabinet.
Sanchez has steadfastly refused this condition although in recent days he has softened his stance, saying they could be given some junior posts. But he said Iglesias has rejected this offer.
Even if Sanchez gets the support of Podemos and all the small, regional, non-separatist parties which won representation the election, he will still fall short of an absolute majority.
That means he would lose the first investiture vote on July 23 when an absolute majority of votes in favour is needed.
But during a second vote scheduled for just two days later, he will only require a simple majority — more “yes” than “no” votes.
However in order for this to happen Sanchez would need Catalan separatist parties to abstain, a scenario which he wants to avoid at all costs.
Conservative parties routinely accuse him of being held “hostage” by the separatists.
Sanchez came to power in June 2018 with the help of the separatists by ousting conservative Popular Party (PP) prime minister Mariano Rajoy in a no-confidence vote.
In a further complication, the main opposition PP and centre-right Ciudadanos have both so far refused to abstain from voting to allow Sanchez to come to power.
In 2016 many Socialist lawmakers abstained from voting to allow Rajoy to be sworn in after ten months of stalled talks on forming a new government. But Sanchez was not one of them.
If Sanchez loses the second investiture vote on July 25, a two-month period opens during which parties would have to solve the stalemate before new elections are automatically triggered.
They would be Spain's fourth general election in four years.
Teneo Intelligence analyst Antonio Barroso said that while the fear of new elections mighly ultimately lead Podemos, which has slumped in the polls, to back Sanchez, “the possibility of a repeat poll taking place in November cannot be discarded.”
Sanchez said Thursday he was not “contemplating” another election.
But he said since it is now difficult for one party to obtain a majority in Spain's increasingly fragmented parliament, the constituion should be reformed to make it easier for a party with minority support to form a government.