MADRID/VALENCIA, Spain (Reuters) - Spain's ruling People's Party (PP) took a battering in regional elections on Sunday with Spaniards punishing Prime Minister Mariano Rajoy for four years of severe spending cuts and a string of corruption scandals.
Although the PP got more votes than any other party, it suffered what could be its worst election result in more than 20 years, exit polls showed, as an economic rebound after a severe recession failed to conserve the absolute majority it held in most regions.
The new market-friendly Ciudadanos (Citizens) and anti-austerity Podemos (We Can) parties made strong headway, overturning a two-party system that has seen the PP and rival Socialists alternate in power since the end of dictatorship 40 years ago.
In a foretaste of national elections expected in November, the country's main parties will now have to enter a period of coalition and compromise in the 13 of Spain's 17 regions that voted on Sunday, alongside more than 8,000 towns and cities.
The PP is set to lose its absolute majority in regional bastions Madrid and Valencia, where potential left-wing coalitions could send the party into the opposition for the first time since the mid-1990s.
One exit poll also showed the PP losing the key stronghold of Madrid city for the first time since 1991 to a leftist platform backed by Podemos, although a second poll showed a tie between the two.
In Barcelona, another left-wing coalition headed by former community activist Ada Colau and backed by Podemos beat pro-independence parties Convergencia i Unio (CiU) and Esquerra Republicana de Catalunya (ERC), in a setback for the Catalan separatist movement.