Spain's Basque separatist party Bildu could win regional ballot

BILBAO/MADRID (Reuters) - A Basque separatist party with origins in the political wing of the now-defunct armed group ETA could win a regional election in Spain's Basque Country for the first time on Sunday, with potential implications for the shaky national government.

Opinion polls show the left-wing pro-independence EH Bildu with a narrow lead over the moderate right-wing nationalist PNV that has long governed the northern region - one of Spain's, and Europe's, wealthiest.

Both have around 30% of the vote, according to opinion polls, meaning that neither will be able to govern alone and either would have to seek the support of the ruling Socialist Workers' Party (PSOE) of Prime Minister Pedro Sanchez, which has routinely allied with the PNV before.

The PSOE, in turn, needs the support of both Basque parties, as well as Catalan separatists, in a highly fragmented national parliament to govern Spain.

Founded in 2011 as a coalition of Basque left-wing parties, Bildu was initially outlawed on suspicion of its closeness to ETA, whose militants killed more than 850 people in a 50-year independence struggle.

Bildu, some of whose members are former ETA militants or sympathisers, has publicly rejected violence, but has not condemned the armed group's activities.

It has campaigned on a platform of pushing not for independence but for more devolved powers, and is also expected to benefit from a decline in support for Podemos, a leftist party that was previously in the national government coalition.

Last year, Sanchez became the first Spanish premier to negotiate with Bildu, provoking harsh criticism from conservative opponents.

During the Basque election campaign, the PSOE tried to distance itself from Bildu, signalling it was more inclined to continue governing with the PNV, which might deprive it of Bildu's support at the national level if the latter were to come out on top.

The Basque Country has one of the highest regional GDPs per capita in Europe. Since ETA announced its total dissolution in 2018, there have been no secession attempts such as Catalonia's unilateral declaration of independence in 2017, which provoked Spain's worst political crisis in decades.

(Reporting by Vincent West in Bilbao and Belén Carreño in Madrid, editing by Andrei Khalip and Aislinn Laing; Editing by Sharon Singleton)