Spain's Socialists, hard-left Sumar strike government coalition deal

The agreement also includes plans to reduce youth unemployment, reinforce the public healthcare system, and boost public housing, the statement added. Sanchez requires the support of Sumar's 31 lower-house lawmakers - as well as from other parties, including some advocating for Catalan and Basque independence - in his bid to renew his term as premier.

Spain's Socialist Party and the hard-left Sumar have reached an agreement in an effort to form a new government after an inconclusive election three months ago left the country with a hung parliament. Their potential coalition would need to win the backing of other parties in parliament.

The deal, which came after acting prime minister Pedro Sanchez met with Sumar leader and acting labour minister Yolanda Diaz on Monday, includes a proposal to reduce working hours while preserving the same pay. It would reduce the official working week to 37.5 hours from the current cap of 40 hours, Sumar's spokesperson Ernest Urtasun told state broadcaster TVE.

The two parties also committed to regulate job cuts, which in Spain were made more flexible in the 2012 labour reform. The parties said they would also revise the targets for emission reductions upwards and push for a tax reform targeting banks and large energy companies, extending the controversial windfall profit levies currently in force.

"This governing deal for a four-year legislative term will allow our country to continue growing in a sustainable manner and with quality employment, developing policies based on social and climate justice while broadening rights, feminist conquests and freedoms," the parties said in a joint statement. The agreement also includes plans to reduce youth unemployment, reinforce the public healthcare system, and boost public housing, the statement added.

Sanchez requires the support of Sumar's 31 lower-house lawmakers - as well as from other parties, including some advocating for Catalan and Basque independence - in his bid to renew his term as premier. While Sumar's support is crucial, it is not enough to secure Sanchez's investiture in the lower house. He still needs the backing of Catalan separatists, who are demanding an amnesty law to mass pardon people involved in the region's failed independence bid of 2017. If the Socialists and Catalan pro-independence parties fail to reach an agreement, the country will go to another election in January in which voters could hand a centre and far-right coalition the absolute majority it narrowly missed out on in the July vote.

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