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Spain's Sanchez rejects latest Podemos proposal for coalition government

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MADRID (Reuters) - Spain’s acting Socialist Prime Minister Pedro Sanchez rejected on Thursday the latest proposal by far-left Podemos for a coalition government on a one-year trial period, though he remains open to negotiations to avoid a repeat election, a Socialist party source said.

The two leaders spoke in a brief call on Thursday evening in an effort to revive stalled negotiations, the first time they have talked since power-sharing talks collapsed amid mutual recriminations in July.

Sanchez’s Socialists have been trying to reach a pact with Podemos since they won an election in April without a majority. If they cannot agree on a government by Sept. 23, a new election - Spain’s fourth in as many years - would be held on Nov. 10.

During the call, Podemos leader Pablo Iglesias suggested a power-sharing coalition based on the final offer made by the Socialists in July before talks collapsed, a Podemos source said. If, after a budget had been approved, the Socialists were unhappy with the pact, Podemos would withdraw and support Sanchez in minority, the source added.

In a sign of the continued distance between the two forces, Sanchez, according to the Socialist source, rejected the offer saying the lack of mutual trust between the two parties precluded the possibility of any power-sharing agreement.

Reporting by Belen Carreno; Writing by Sam Edwards; Editing by Lisa Shumaker