Rajoy urges MPs to back his bid to end Spanish gridlock

By Inmaculada Sanz and Adrian Croft MADRID (Reuters) - Spain's acting Prime Minister Mariano Rajoy urged parliament on Wednesday to back his bid to form a minority government and end 10 months of political paralysis, offering to work with his opponents on major challenges like pension and education reform. Rajoy's conservative People's Party won two elections in December and June but failed to secure a majority and attempts to put together a viable coalition government have failed. But the Socialists, who previously voted against a Rajoy-led government, switched position last Sunday by announcing they would abstain in the next confidence vote, paving the way for Rajoy to stay in power. Rajoy knows he will need the support of opposition parties to push through legislation and the Socialists warned him on Tuesday that they would not approve any budgets proposed by a Rajoy-led government. Rajoy adopted a more conciliatory pose than usual as he kicked off a debate seeking parliament's approval to form a new government. "The exceptional circumstances demand that we put aside ideological confrontations and combine our efforts, exceptionally, because we are dealing with an unheard-of situation," Rajoy said. The alternative to backing him, Rajoy warned, would be a third national election in a year, a prospect he said would be damaging for Spain and its economy, which is recovering from a severe recession. "OPEN TO DIALOGUE" "I take it for granted that every day we will have to build a majority to govern the country. For that, we need a government that is open to dialogue. That is what I offer. I am ready to negotiate all decisions as much as is necessary," he said. Rajoy invited all parties to work together to tackle pressing national issues such as the sustainability of Spain's public pension system, reforming the education system and overhauling the financing of Spain's 17 autonomous regions, which regularly overspend. Spain is also under pressure to present a new budget plan for 2017 to Brussels to guarantee it can meet public deficit targets for next year, and Rajoy said his government planned to present a new public spending limit to parliament in the coming days. Rajoy said he was open to dialogue with the Catalan government but implicitly rejected moves by Catalans to hold an independence referendum from Spain next year, saying the Spanish people as a whole were the only ones who could decide on the future of their territory. Opposition leaders will respond to Rajoy's speech on Thursday before a vote in which Rajoy needs backing from an absolute majority of deputies to stay in power, a threshold he is unlikely to reach. Failing that, a second vote would be called 48 hours later in which he simply needs more votes in favour than against, meaning abstentions can make a difference. (Additional reporting by Sarah White; editing by Andrew Roche)