Spanish Socialist Sanchez succeeds Rajoy as Prime Minister

MADRID (Reuters) - Socialist Pedro Sanchez took over as Spain's prime minister on Friday, after outgoing leader Mariano Rajoy lost a parliamentary confidence vote triggered by a long-running corruption trial involving members of his center-right party.

Socialist party head Sanchez becomes Spain's seventh Prime Minister since its return to democracy in the late 1970s following the dictatorship of Francisco Franco.

But Rajoy's departure after six years in office casts one of the European Union's top four economies into an uncertain political landscape, just as another - Italy - pulled back from early elections.

Sanchez won Friday's no-confidence motion with 180 votes in favor, 169 against and 1 abstention.

He suggested on Thursday he would try to govern until the scheduled end of the parliamentary term in mid-2020. But it is unclear how long his administration, with only 84 Socialist deputies in the 350-member legislative assembly, can last.

With most Spanish parties and Sanchez himself being pro-European, investors however see less broader political risk there than in Italy.

Anti-establishment parties in Rome revived coalition plans on Thursday, ending three months of turmoil by announcing a government that promises to increase spending, challenge European Union fiscal rules and crack down on immigration.

"We've had a rude awakening of European political risks this week... but the situation in Spain is very different from Italy," said Michael Metcalfe, head of global macro strategy, State Street Global Markets.

"The parties leading in the polls in Spain are centrists so we're not getting the proposals for fiscal extremes as we have in Italy."

Many observers said Sanchez was in any case unlikely to call any vote...